Honoring diversity in Korean companies
By Kim Yong-seong
A few weeks ago my computer broke down, and I had to talk to a representative from Dell technical support over the phone. Naturally, I assumed that the person on the other side of the receiver was Korean. Upon learning his e-mail address, however, I noticed that he spelled his name in an unusual way. Then it hit me. He was a Korean-speaking Chinese talking to me from southern China. The interaction, yet again, reminded me that I live in a highly interconnected global economy where physical boundaries have lost their age-old meaning.
Even though many Koreans and organizations claim to have a strong presence in global society, the nation is still considered to be slow and outdated when it comes to ethnic and cultural diversity issues. The situation is not any better in the business environment.
LG Electronics ventured to fill all of its top executive positions with foreigners except that of the CEO a few years back. However, the trial lasted only a short while. All the foreign executives were let go as the very CEO who tried to globalize the organization was sacked by the founder's family.
Last year, the April issue of Harvard Business Review released an interview with Linda Myers who had been the HR director of SK Holdings for two years. When she first came onboard, Myers was considered to be the best person to bring in a world of change into the company. Born to deaf parents, she had learned the importance of effective communication at an early age. In her adulthood, she led a global lifestyle while living, working and traveling in all seven continents _ including Antarctica. With such a background, everyone had high hopes for Myers to not only survive, but prosper even, in this typical Korean corporate environment. However, years after her departure from the company, Myers remembered her days in SK with bitterness. She felt that the organization was neither prepared nor sincere in globalizing its organizational culture.
A key shortcoming came from a poor understanding of what it means to have foreigners on staff. This resulted in a situation where Korean companies failed to draw from the multi-cultural background and experience of their employees. As two prominent Korean companies publicly failed to embrace and nurture high-potential foreign talent, many other local firms withdrew from bringing diversity into their workforce.
Recently, however, a new trend has been growing among Korean companies in which they are putting more emphasis on cultural diversity in the workplace. In the past, Korean companies hired foreign employees, simply for the sake of expediting globalization. But we have seen that this effort failed as a handful of foreigners could not make a significant difference in the Korean business context. The new trend, on the other hand, comes from very different needs. As many Korean companies have now joined the ranks of top-tier competitiveness on the global scene, they approach ethnic and cultural diversity as a source of creativity.
Experts have long considered diversity as a source of original ideas. For example, Frans Johansson wrote that innovators change the world by stepping into the “intersection,” a place where ideas from different fields and cultures meet and collide. Johansson called this proliferation of new ideas "the Medici effect," referring to the remarkable burst of creativity enabled by the Medici banking family in Italy during the Renaissance.
The business world, too, offers plenty of examples where creativity thrives on diversity. Take Pepsi for instance. When Indra Nooyi stepped in as CEO, many remained skeptical. She was, after all, an Indian woman in a world dominated by white men. Despite such misgivings surrounding her, Nooyi soon cleared the cloud of doubts. She set off in a direction that promoted ethnic and cultural diversity, and found the next source of Pepsi’s global competitiveness. Since then Pepsi has hired more women and ethnic minorities and actively tapped into this new pool of talent. Now that seems to have been a wise move. Thanks to the various ideas drawn from diverse people, Pepsi is ahead of Coke in terms of both gross sales and growth rate
Soon enough, more business leaders will focus on diversifying their organizations to fully drive creativity. To be better prepared for this future, Korean businesses and society in general need to take more proactive measures in boosting diversity. Business leaders should not view diversity as a matter of social obligation. Rather, it should be a key business issue especially in a creativity-driven economy. In the end, organizations that honor diversity will be rewarded.
Kim Yong-seong is a professor at the Institute of Global Management.