'Lean and Mean'

LS Group Chairman Koo urges innovation to make the group more competitive

Chairman Koo Cha-hong of LS Group stresses innovations for the group's affiliates as it is ready to move into a new headquarters building in Anyang. Gyeonggi Province, in May next year.
He said reform is needed for the group to have a new culture and authority as it is about to relocate the office as a leading business enterprise in the country.
According to group officials, the chairman called for reform at a meeting of the group for reform held at the LS Industrial Systems Co. training institute in Chongju, North Chungchong Province. "We need reform to be equipped with a global competitive power,"the chairman said.
He said the group's affiliates such as LS Cable, LS Industrial Systems, and LS Nikko Copper Refining are tops in the country, but have yet to secure top competitive power in the world. The chairman went on to say that management and reform are one and they need reform through their core value made of trust, passion and challenge. He said a business exists for its customers and its existence becomes significant when it gets chosen by its customers, adding that they should win trust from customers.
"Reform Lot"is held every year since 2004 on the group level to share the reform experiences among affiliates, although the event used to be held by each affiliate to push reform.
CEOs of affiliates such as Vice Chairman Koo Cha-yol of LS Cable and officers in charge of reform, about 200 altogether at the event heard the successful experiences of LS Cable gained in outsourcing parts to save costs and LS Industrial providing tailored made solutions to its customers.
LS Cable Co., former LG Cable, posted annual sales of 1.84 trillion on in 1999 and the annual figure grew about 5 percent every year until 2004. In 2004, however, its annual sales jumped to 2.43 trillion won and to 2.9 trillion won last year. The company produces a full range of products including electric wire, light communication wire, and industrial machinery, among others.
What has been the reason for such dramatic jump in sales's People began to wonder. The answer was not too far away. Company officials realized the drastic change in the company's operation developed with the arrival of Vice Chairman Koo Cha-yeol as its CEO early in 2004.
Vice Chairman Koo is the oldest son of Koo Pyong-hoe, fourth younger brother of late group founder Koo In-hoe and now honorary chairman of the E1 Co., Koo joined the Lucky-Goldstar International in 1978 as a clerk and worked his way up while with LG Securities and LG Investment Securities before being assigned to LG Cable in 2004 as vice chairman and CEO.
Those officials remembered that the new CEO has always called for 'innovative management'after he took over management of the company so much so that he is known as the 'innovation missionary.'His name cards bear the inscription, 'no innovation, no future's showing how preoccupied the new CEO is with innovative changes to move the company ahead.
During his recent interview with media at his office in the ASEM Tower in southern Seoul, the vice chairman said the nagging problem for the company was the memory of the failure that fell on a rival company. The company built and operated a plant in China in the early 1990s and chucked the operation and withdrew in less than 10 years. LS Cable officials could not see their company meeting the same fate by setting up operations in China and making daring investments in China. They didn't realize that China's market has been growing and regulations have been eased during the time. Vice Chairman Koo said the company built four plants in China and has been operating them without a hitch. He had to persuade company officials to make the move. Koo said they became fearful and had doubts about the project. They didn't want to be held responsible for the failure and put in jeopardy their jobs with the company. They thought they wouldn't have anything to lose if they stayed inactive and shied away from being bold and daring, the vice chairman recalled.
He had to change personnel regulations to hand them a jolt. The regulations stipulated that they can be promoted to the level of managers until they are 50 years old, not directors and those managers didn't attempt to do anything for the company except routine ones, knowing that they have reached the top as far as promotion was concerned. nw

LS Group Chairman Koo Cha-hong in a group leaders meeting to stress innovation.