Yun Yong-ro experiment
By Oh Young-jin
Assistant managing editor
So far, so good. Korea Exchange Bank (KEB) CEO Yun Yong-ro Monday replaced nine vice-president level executives in the first move since his inauguration last Thursday of what is likely to be a sweeping reorganization of the bank that had been run by a private equity fund for about 10 years.
One KEB official commented, “It is the right move.”
The fired executives had been holding plum positions by and large since the Texas-based Lone Star fund took over. Their positions have been reduced by one to eight and five of them were filled by promotions from rank-and-file members of the lender, with the other three from Hana Financial, KEB’s new owner, in a trade deal involving the dispatch of a KEB official to Hana.
These promotions are hoped to act as a stent slipped into the heart to clear the way for clogged arteries and getting the KEB system going once again. Of course, the metaphor is personal to me. In other words, it means giving a reason for the KEB workforce to heave a sigh of relief from their fear of persecution by the occupying force of Hana and look forward to working for the company and their future.
Of course, it is only a beginning for a big job given to Yun.
But I expect the 57-year-old bureaucrat-turned banker to do well in his challenging role for a couple of reasons.
Ironically, Yun has few personal obligations to outgoing Hana Chairman Kim Seung-yu, who has singlehandedly cut a devil’s deal with Lone Star but refused to stay on, although it remains to be seen whether his grip on Hana has loosened.
Before continuing on Yun, I laud Kim for his decision because, if all goes well, it means Hana, the banking industry’s minnow embedded with Kim’s personal cultism of sorts, is doing what pace-setter Shinhan Financial has failed to do. Shinhan was almost toppled after its two principals fought in a nasty public power struggle. Now, Shinhan’s new chairman is Han Dong-woo, who prefers to see less personal charisma but more of a system in running his group.
Back to the Yun-Kim relationship: A source said that Kim talked to about 200 people who know Yun well before deciding to ask him to run KEB.
According to those who are close to Yun, he lately privately said with his unique witticism that makes a listener think before laughing that he owes his job not just to Kim but those 200 who were asked in the opinion canvassing over his selection.
This relationship is better for KEB’s future because Yun can run the bank as he sees fit, while Kim will check his itch to interfere. Even with the chairman taking a back seat, his successor-designate and Hana Bank CEO Kim Jung-tae is in the same age group at 60 and is bound to try and work with Yun rather than dominate him.
From Hana’s perspective, the KEB workforce is quite tricky to handle.
That was why Hana Chairman Kim had little other choice but to grant virtual independence during eleventh-hour negotiations. Even with Kim’s act of magnanimity, KEB employees were not entirely happy to see him give a congratulatory speech about KEB’s new start last week. “(KEB) employees and executives looked as uncomfortable as if they had just chewed a piece of dried bear’s gall bladder,” one said.
Yun, in contrast, was seen as the lesser of two evils because of his lack of the Hana associations. He also scored a point or two with the union when he handed over a bunch of 100 red roses to union leader Kim Kwi-chul for easing their blockade to the building and allowing him to enter his office for the first time officially.
It is said that Yun recalled somebody telling him about the rose being KEB’s corporate flower and decided to present the union leader the bouquet.
It’s a happy tale so far but the road ahead can be very challenging for Yun.
Above all, he has to find ways of making KEB employees respect him as their boss.
Larry Klane, a hired gun for Lone Star, dealt with his job in the attitude of a temporary worker and was often criticized for being aloof. It was not entirely his fault, considering KEB was meant for sale and he was designated caretaker. Under Klane, KEB employees had been drifting as if a ship with no anchor.
His lead role in passing big dividends to Lone Star didn’t help with the media often portraying it as an act of grand theft, which was legally not true.
Then, what can Yun do to win the hearts and minds of the KEB workforce and get it back on track?
One observer told me of two things ― communication and leadership ― and I agreed.
“It is two sides of the same coin,” he said, considering that nowadays it is not an exaggeration to say communication is leadership and vice versa.
He said that Yun should stay in constant contact with the employees, listening to them and talking to them.
“It doesn’t mean they want to be handled with kid gloves,” he said. “They want to work harder because they know they have been underutilized but they want to work harder with a guarantee that they are recognized for what they do on a fair and equal manner.
“If they are not convinced, the bank will drift,” he said. “Yun and his employees are in the same boat and it takes two oars to get it going forward. Otherwise, it will be a lose-lose situation and both sides have no time to waste.”