Chairman says LS is fattening investment in Silicon Valley to find business model
The following is a transcript of The Korea Herald’s interview with LS Group chairman John Koo. ― Ed.
KH: How do you forecast the domestic and international management environment this year or for the next few years?
Koo: I expect a time of extreme volatility as the global economic cycle accelerates. Increased uncertainties due to the eurozone debt crisis and instability in the Middle East will raise the volatility of currency exchange rates, oil prices and raw material prices, posing a risk that hampers stable profit-making.
As the global recession prolongs, competition within the emerging markets will intensify. With the combination and fusion of bordering industries, companies are required to provide a total solution instead of a single product.
Also, fulfilling social responsibility is no longer a matter of choice but a must for businesses.
KH: You also emphasized to your employees the need to improve LS Group’s fundamentals. Please tell us about the concrete plans to achieve that.
Koo: We will pick the businesses that we are good in and have a promising future, and reassign more resources and talented people to them.
We will sell off idle properties and maximize the efficiency of resources to strengthen our financial structure so we can survive the worse possible situations.
Growth depending solely on our capabilities would be limited, so we are seeking shared growth through bolstered partnerships with companies in and out of the country.
By expanding our LSpartnership culture to our overseas subsidiaries to contribute to the countries we are operating in, we will try to become a respected enterprise abroad as well.
KH: You proclaimed LSpartnership as the new management philosophy last year. What kind of message did you want to deliver to your members and what does LSpartnership mean?
Koo: In order to compete with global corporations and improve, we needed to establish a value that all LS members can share.
No one can do everything on their own anymore; we are living a time where we need to cooperate and stay together.
LSpartnership is a work of all our members from the chairmen to the newest employees for a year in 2010. Partnership is the DNA of LS Group’s success and our future growth energy, and LSpartnership means “let’s create greater value together.”
LSpartnership is about achieving exceptional performance based on mutual respect, caer and trust by LS people who value integrity and a sense of ownership by creating a greater value together, externally, through cooperation and open minds.
Corporate culture isn’t something that can be created in a short period of time, and needs to be built on through the next generation.
As chairman, I will play the role of an evangelist that propagates LSpartnership around the world.
KH: You said previously that LSpartnership is a “true partnership.” Can you be more specific?
Koo: It means that it’s a partnership of action, not of words.
LSpartnership isn’t for show or grand speeches; we aim a true partnership where we constantly and sincerely do our best even for the smallest things.
It is important for all LS members to participate and practice this partnership through cooperation with our partners.
KH: Could you tell us about LS Group’s growing presence in the global market?
Koo: Based on its business experience in Korea, LS is consistently carrying out its expansion strategy in the global market.
In 2008, LS Cable and Systems acquired Superior Essex, the largest cable company in the United States, and grew into the world’s third largest cable company. Using the global network of SPSX, we are advancing into the U.S. and European markets.
To secure product competitiveness in the U.S. market, we started building a power cable production plant in Tarboro, North Carolina last year.
LS Group chairman John Koo (second from left) visits LS Industrial Systems’ electric car part production line in Cheonan, South Chungcheong Province. (LS Group)
In December, LS Industrial Systems was named one of the world’s 100 most innovative companies by financial information provider Thomson Reuters for last year.
Based on such accomplishments, LS plans to actively run open innovation activities with top companies in the Silicon Valley.
KH: You have chosen “green business” as LS Group’s next-generation growth engine. What kind of vision do you have on green business and what is LS doing to make this a strong opportunity for growth?
Koo: This is a time of fundamental paradigm change in industrial environment with rapid changes in green and smart technologies as well as the fast rise of emerging markets.
We are thoroughly preparing ourselves as now is the chance for LS.
LS is aggressively investing in smart grid, renewable energy, electric car parts and resource recycling businesses, which will lead the group’s future growth.
I have been exchanging views on the global trends in smart grid technology and the direction of related industries with our researchers through lunch meetings called the “smart grid club.”
KH: Please explain about LS Group’s strategies in these emerging economies and advanced markets such as the U.S. and Europe.
Koo: As our major business area is related to infrastructure, we see plenty of business opportunities in China and other emerging economies that are speeding up growth.
We sort the markets by region and product, and draw up specified strategies for each market.
In China, we plan to concentrate on high-end power cables such as submarine cables and high-voltage, direct current transmission systems, and smart grid businesses. We are also seeking partnership opportunities with Chinese companies to take part in electric car charging infrastructure projects as well as development and supply of electric car parts.
In India and Southeast Asia, LS is looking for business opportunities in upgrading the power infrastructure by applying the smart grid concept and enhancing energy efficiency.
We are pushing for business cooperation with partners including Tata Group, one of the largest conglomerates in India that has a similar management philosophy and business areas with LS .
I visited India in January and met with Tata chairman Ratan Tata, who was truly a magnificent and admirable person.
LS is actively searching for partnership chances with local companies in Southeast Asia. South America will be highly important for LS too in the future.
KH: How does LS explore new technologies and new businesses?
Koo: To quickly grasp the latest industrial and technological trends, and develop promising business models, LS is fattening investment in the Silicon Valley.
We decided to invest in Silicon Valley’s clean tech fund and through this, we plan to chalk up technological or business partnerships in smart grid, electric vehicles, recycling and renewable energy.
By combining our business with U.S. funds, which are good in exploring and managing new technologies, we will tap into the high-growth clean tech market.
KH: Please describe the global talents LS needs and how the group fosters such human resources.
Koo: With subsidiaries and branch offices in some 100 cities across 20 countries, LS is making progress as it bumps shoulders with global corporations.
LSpartnership applies in global management as well; the spirit of trust, respect and consideration from a global point of view is what we need.
We need talented people that can put LSpartnership into practice, or create a bigger value through working together.
We pursue capable people with positive and bright energy, creativity who aim to become the top experts in their fields. The group’s training institute called the LS Future Center and each of our affiliates cooperate to systematically foster such talents from fresh recruits to executive-level.
By Kim So-hyun (email@example.com