By Oh Young-jin
Lee Seung-han, chairman and CEO of the retail chain Home plus, was like a magician on stage.
In a recent interview that lasted more than two hours, the 66-year-old business leader, who cut his corporate teeth at Samsung Group, never stopped showing us clever ideas, novel notions and good causes so as to make at least one of six interlocutors at the table feel as if he were pulling one rabbit after another from the hat.
Of course, if some of those causes, notions and ideas were not translated into reality, Lee should have been regarded as something like David Copperfield appearing on a Samsung Electronics smart television commercial.
But Lee has made his leap from thought to action, the biggest result being the supermarket chain that is 100 percent owned by Tesco but almost independently operated by Lee.
In 1999, his Home plus experiment began as he tried to sell not just groceries and other merchandise but, more importantly, give value to his prospective customers.
His partners and colleagues as well as rival retailers reacted as if he was out of the mind, when he provided a variety of amenities for customers as well as courses that are now greater in scope than a university curriculum.
The second floor of the stores, regarded as a primary sales area, has been assigned for a children’s playground, various clinics, a culture center and the customer service section.
Soon after the first Home plus opened, its sales surpassed the combined total of two rivals in the same neighborhood.
It was his challenge against the business as usual notion: Why waste money on things that don’t help sell goods? Of course, it was a big success otherwise he wouldn’t be where he is today.
Looking back, he said that it was as much a business decision as it was his bid to realize an idea about corporate social responsibility (CSR).
“We needed to get to the center of the industry,” he said, recalling the stranglehold other retailers had on the industry. “So we had to do what they didn’t think we as well as they would do.”
But if he had been engrossed in profit growth, Lee would be just another professional manager hired by a big multinational.
But he has pushed building up its curriculum to 500 courses and teaching 1.2 million people, a community outreach program that has grown to play the role of offering an extended post-school education.
“It is a two-way street,” Lee said. “We serve people and people help our business prosper.”
Lee’s value pitch didn’t stop there. Now, he is spreading the word not just in Korea and but also throughout the world.
As leader of the U.N. Social Compact’s Korean chapter, he hosted its global session last year to discuss and map out steps that businesses can and must take as a key leading component of society at a time when it is alienated by what the rest of society see as greed, as testified by the Occupy Wall Street protests.
Lee attributed his success to an “owner spirit.”
“Without it, I couldn’t have done it,” Lee said. Indeed, he has acted with a kind of care only possible from an owner, when he doesn’t have any stake in the wholly Tesco-owned supermarket chain.
“Tesco has not brought a red cent or a single penny back home with profits invested,” Lee said, pointing out that Home plus has contributed in the form of a strengthened Tesco share price.
The British multinational sends only three executives to Home plus, a far smaller number than a team of 40 sent to other countries.
If it is a show of confidence, it dates back to the time of the Home plus creation when Samsung and Tesco tried to launch a joint venture.
Then, Lee working for Samsung, persuaded Tesco to adopt a discounted cash flow rather than simple valuation to have Samsung’s contribution recognized.
Lee said that the adopted method that takes into account future value is uncertain to say the least and helped Samsung receive cash as royalties on top of the joint venture.
For now, it is hard to tell whether Lee’s presentation and negotiation skills were good or Tesco was prescient.
Everything Lee says returns to his always-primed pump that generates ideas.
He is an expert in neologism, coining new words such as “artience” ― the combination of art and science ― to explain his management style.
“The two are not conflicting. We use the artistic touch to move our customers and science to give them value.”
He said that some of the words he has coined have entered a dictionary (I didn’t ask which dictionary).
Next time one visits, check out the facade of the outlet to look for a big clock at the center. Lee said that he took a motif from Big Ben in London as his way of showing respect to the customers of the British multinational as the London clock adorns the house of representatives of popular will.
Of course, Lee has his share of criticisms about his being less sensitive to the plight of small merchants and flip-flopping on some key decisions for a new business.
That is a fresh challenge facing him and his legacy will likely be determined as much by what he has done as what he will do.