KHC Goes Innovative

Has built up an overall innovation system through learning organization

A female trio from Korea Highway Corps. (KHC) has become a much-talked topic these days because they serve as advocates who bring about the wind of innovation into public organizations. They are Park Sun-myung, 26, Chung Su-yeon, 26 and Yoon Dan-yung, 29.
The women's job is to play the role of a facilitator of diverse in-house meetings, including innovation-related gatherings as they provide a consulting on convening meetings, encourage staff members'participation and boost the atmosphere of meetings.
Dubbed "A Beautiful Trio,"they officiate at KHC's innovation sessions, called "Inno Meeting"modeled after General Electronic's innovative approach "Town Meeting."Under a strategy of innovating the way on-site staff members approach clients, the trio has been gaining recognition due to female characters ― softness and sophistication ― and their eloquent emceeing, transferring the secrets to government agencies and other public organizations.
It is noteworthy that the women are less than two years in office at the corporation,
and they are educated as innovation experts. Is it a coincidence that KHC has become the first public organization to be most innovative among public organizations for the second straight year ― 2004 and 2005's The answer is no. KHC's feast is owed to the fact that the corporation has built up an overall innovation system, which becomes the subject of benchmarking among public organizations across the nation.
A RISE IN THE PRIVATE SECTOR's PARTICIPATION IN ROAD CONSTRUCTION. The days have been gone when public organizations rest on their laurel, depending on their invested interests. In the past, public organizations had tendency of doing monopolized business in an easy manner, As Jeon Yun-churl, chairman of the Board of Audit and Inspection, noted, public organizations have to stage a fierce competition with the private sector and any public bodies that have already finished historical functions and duties should be disbanded.
KHC is no exception. In accordance with a shift in the government's social overhead capital priority policy from road construction to railroad and part investments, the private sector's participation in expressway construction is being expanded. As a result, KHC has to make a pitch for private investments into expressway construction and attract customers. Three expressway lines built with private investments have been already operational, five are under construction and 10 others are on the drawing board. In reality, non-private expressway lines collect toll charges, equivalent to less than of half of the private-sector's, but KHC cannot propose a raise due to the general public's opposition and the pressure from the government. Besides, there are still many people who have such negative perception toward public organizations as inefficient management and moral hazards of their executives and staff members.
It is the reason why KHC CEO Son Hak-lae has touted for a cause of making the corporation a reliable public company through change and innovation since he took the helm at the corporation. CEO Son's initiative derives from a sense of crisis in which pending challenges cannot be overcome without changes and innovation and any public organizations which do not create the value for customers are given the cold shoulder by the general public.
KHC's LEARNING ORGANIZATION. KHC has been implementing three management strategies under a corporate slogan "A Happy World through U-highway"― innovating the value for customers (making expressways fast, safe and convenient), innovating operating systems (beefing up finances and safety) and innovating corporate culture (creating harmony and co-existence).
Behind a significant means of carrying out the innovation strategies is learning organization. That is to innovate the way employees work through learning organization. Those who play leading roles in learning organization are the so-called innovation experts who have been educated and trained by the corporation ― Six-Sigma belt holders, Town Meeting Q-win Leaders and facilitators, including the Beautiful Trio. The innovation experts account for 16 percent of 706 employees, the assigned staff member as of November 2006.
Take a look into the process of educating the innovation experts. In the case of Six-Sigma, persons who have the outcome of a 100-day field project certified after undergoing an over 40-hour, tough training program are qualified for Six-Sigma belt holders.
With the educated innovation experts taking the initiative, all staff members are encouraged to participate in the implementation of the three innovation strategies. During 2006, 473 teams of 2,833 employees or 63 percent of the staff are partaking in learning activities. Thirty-six learning groups, initiated by executives for educating all the staff, 163 Six-Sigma learning teams at head office and regional headquarters and 274 Quick-win field learning bodies are active within the corporation.
The learning organization activities have paid off. KHC cut down on 250 billion won in budgetary costs. Installation of make-shift entry and exit routes at the Suwon Tollgate, the chronic traffic bottle neck, has resulted in reducing the number of vehicles waiting at the tollgate from 123 to 45 by 64 percent, saving 28.3 billion won in traffic congestion costs.
Recognizing the significance of human resources development, each company has many educational programs. However, the most important thing depends on how much the intangible educational contents can be translated into tangible business improvement or put into action. Many companies operate learning study groups or COP (Communities of Practice) for the purpose of voluntary action through learning or action learning, but some of the learning organs prove to be ineffective.
But KHC's learning operation system, called "2504 Innovation Learning Program,"has turned out to be effective.
KHC has been adopting a Top-down approach in which learning organization theses can be decided among a pool of 311 innovation tasks preset in association with the corporation's vision strategies.
Learning organization approach varies according to each body and structure ― head office with a macroscopic perspective and service-oriented sites. KHC head office and divisions operate strategic task force learning groups to implement strategic tasks; Six-Sigma learning groups are active at the head office and business division to solve operation tasks and Quick-win learning groups are active at business outlets, resting places and customer contact points to solve service tasks.
Learning organization groups are operated by Six-Sigma program and "Inno-meeting."The Six-Sigma program for all the staff members is composed of three levels ― Green Belt IGB), Black Belt (BB) and MBB (Master Black Belt), each lasting more than 40 hours. The Quick-win education program is a 40-hour learning session adopting a trouble-shooting method through discussion under the slogan "Inno-meting."Each cell group is organized at each tollgate to set different innovation theses according to its characteristics and carry out them, with a focus on translating the outcome of learning into field action.
The process and quality control of learning activities are monitored by 2x5 Monitoring System, and a business performance rally is held around the end of each year to encourage staff's voluntary participation. Learning groups are given four sessions to announce their achievements, whose assessment is closely related to staff's promotion, arousing their concern. Learning achievements are posted and shared on the on-line site, called ?504 Innovation Maru,"and a collection of best practices on learning achievements is published every year to create new achievements and knowledge. nw

Korea Highway Corp. CEO Son Hak-lae