Woongjin shows how innovative spirit turns crisis into opportunity
Every business has its ups and downs. What ensures success in business is how companies manage to weather turbulent times. In other words, only those able to turn crisis into opportunity can survive and prosper in the long term.
The Chinese word for crisis consists of two characters: one meaning danger, and the other representing opportunity. This implies that a crisis and an opportunity aren’t that different and they tend to coincide at the same time.
Successful leaders are well aware that key factors in determining the fate of firms are not the challenge itself but how to address it. History shows that a mishandled opportunity can turn into a crisis, while a well-managed crisis can offer a better chance.
When coming across a challenge, good leaders do not treat it as a crisis because they know that it will only make them live in fear. They instead take bold and courageous action to make the situation work in their favor when everyone tends to shrink into oblivion.
Woongjin Group founder and chairman Yoon Seok-keum is one of the most representative business leaders who believe that a period of crisis is also a good opportunity because it is a good time to try new ways of doing something and outperform rivals.
Success in Yoon’s words is the outcome of continued efforts to overcome challenges and failures. According to him, companies that always try to pursue creativity and innovation during turbulent times end in success.
“People do not recognize it but there were many failures in my life. If you make it at every attempt, it’s not a challenge. You need challenges and failures to achieve success,” Yoon said in an exclusive interview with Business Focus held at his office in Chungmuro, Seoul on Dec. 5.
To illustrate how a crisis becomes an opportunity, he shared his experience during the 1997-1998 financial crisis. In 1997, when the crisis hit the nation, the group was in trouble as Woongjin Coway, the group’s subsidiary manufacturing water purifiers, suffered from overstocked products.
Yoon overcame the hardship by dropping a traditional sales approach and introducing a new concept; “rental.” The company rented water purifiers free and charged only for their use of water, enabling consumers to drink clean water at a lower cost.
The move helped the group not only boost its sales during such difficult times but also avoid laying off employees and set up the foundation for the group to become a leading business entity here.
“Every idea originates from simple things. The rental idea was conceived as the result of our efforts to create a new way of increasing sales to solve the inventory problem. We tried to switch our way of thinking in sales, and that was a starting point of the success,” he said.
“Challenges and failures are the foundation for success and it will be so in the future. Our continuous efforts for creation and innovation were the key factors for Woongjin’s rapid growth over the past decade.”
With annual growth rates exceeding 10 percent for the last three decades, Woongjin is the only Korean corporation to have become a conglomerate after 1980. Starting out as a book publisher in 1980 with a capital of 70 million won, the group is now the nation’s 33rd largest conglomerate with 15 affiliated firms and sales of 5.3 trillion won in 2010.
The veteran CEO’s attitude toward challenges and crises comes from his belief in the power of positive thinking. He believes that a positive mind has a mighty power that can change everything.
Preserving core values
“When the attitude is positive, we can create energy and happiness. If you look at the bright side when faced with challenges, you can turn those challenges into opportunities.”
He introduced one episode involving the group’s labor union:
“When the labor union was launched, I had a problem with the union leader. The situation was not good but I tried to think positively and understand the union by listening to their voices and discussing key issues on a regular basis. That positive approach helped me solve conflicts with the union.”
The 65-year-old chief executive said that a positive thinker is not born but molded. He stresses that people can turn the mind toward the positive through determined effort and training.
“I was a very negative person. I always looked at the world through a pessimistic lens. I became positive when I started my sales career at Britannica at the age of 27,” he said.
“If you are a sales person, you should be positive no matter what. You always have to be sure that you are going to sell your products and visualize yourself selling them. This applies to every aspect of life. If you keep thinking in a positive way and visualize it, things will happen in your favor.”
The key factor behind Woongjin’s remarkable success was that Yoon successfully established four core values in the group’s corporate culture and management philosophy that all members, including executives and employees, can share — creation, innovation, transparency and environment.
In general, good companies have their own fabric of values, and they play a critical role in helping them overcome challenges and sustaining their businesses. If a company has core values, it can motivate its employees to work hard even during hard times. The more challenged they are, the more they try to preserve their values.
Woongjin’s values have spearheaded the group’s endless challenges into new areas over the past three decades. Starting with the educational publication business in 1980, Woongjin has grown to encompass 15 affiliated companies in eight business areas, including environmental consumer electronics, food and beverages, solar energy, environmental materials, construction, energy and finance.
Over the past five year, the group rapidly expanded its business portfolio through a number of mergers and acquisitions. It acquired Kukdong Engineering and Construction in 2007, Saehan Chemical in 2008 and Seoul Mutual Savings Bank in 2011. It also entered the energy market by establishing Woongjin Energy in 2007 and Woongjin Polysilicon in 2008.
“I think that for sustainable corporate growth, creation and innovation are most important. If you continue to pursue innovation, you may sometimes fail. However, our history suggests that innovation efforts have been the key drive for our growth,” he said.
Yoon put special emphasis on the importance of people-oriented management. When a company faces challenges, according to him, more important than systems and products are the people because it is their caliber that would see them through.
“The most important task for CEOs is finding talented individuals and grooming them into leaders. A company needs talent equipped with both knowledge and confidence. If a person has only one of them, he or she cannot be a good leader,” he said.
He shared a hiring mistake. “We were trying to find someone to work as a CEO of one of our subsidiaries. There was a candidate with a perfect professional career but not impressive at the interview. However, I finally chose him because of recommendations from other executives. It was a big mistake. He dragged the company into trouble,” he said
“If you pick the wrong person, it can hurt the entire organization. It is extremely important to conduct thorough reference checks with both immediate bosses and subordinates of the person to avoid a hiring mistake.”
Yoon pointed out that what is most important in talent management is to ensure that people are excited about their jobs. To that end, it is important to make them feel deeply involved in projects, he added.
“You get excited when you actually feel that you are an important part of a project. If not, you don’t enjoy the work. For example, when your idea is appreciated by the CEO, you get excited with what you are doing,” he said.
“In that regard, communicating effectively is critical. Top-down communication prevents the free flow of idea from bottom up. Under such a structure, the CEO has few chances to listen to young voices, and the organization cannot be efficient and dynamic.”
Yoon said that his dream is not to make Woongjin the biggest enterprise in Korea. “What I really want to do is to turn Woongjin Group into a company that young people most desire to work for.”
For Yoon, the next goal is to make Woongjin become the world’s number one in its key products. He thinks that with the business environment changing so fast, only the number one can survive.
Woongjin finished in-depth analysis on the competitiveness of its products last year and picked several items that have the potential to become number one in the world — air cleaners, bidets and call center.
“In order to become the number one in the world, I don’t think size matters. If you don’t catch up with the leader’s group, you will fall way behind,” he said.
“You cannot be number one in the world if you try to do so in every industry. Therefore, we have narrowed down the list of industries in which we can be at the top within three years and are focusing on them.”