SK Group Embraces Change

Chairman Chey attends Davos Forum to meet with CEOs of energy companies to secure exploration rights for foreign mining blocks

"Its energy this time,"declared SK Group Chairman Chey Tae-won as he left for Davos, Switzerland to attend the annual Davo Forum for the fourth time in a row. His entourage included Vice Chairman of SK E&S Chey Jae-won, SK Telecom President Kim Shin-bae, President Chung Man-won of SK Network, President Park Young-ho of SK Co.
Group officials said the chairman's group has focused on matters related to securing energy this time, unlike in the past when the IT sector future trends have been a key area of concern.
The chairman met with important leaders in the area of energy from China and Middle East oil companies following the appointment schedules made before arrival in Davos. Some foreign participants made arrangements to meet with Chairman Chey to learn the globality. Chairman Chey asked the support from foreign energy company CEOs their support in his effort to secure oil exploration rights fore foreign mining blocks.
He also met with key financial leaders also including the chairman of Lehman Brothers. He also called on CEOs of energy firms in Turkey and Ukraine.
SK Group will invest some 8 trillion won in its facilities and achieve 82 trillion won in sales, including 30 trillion won in exports this year, the group said Jan. 1. The projected investment figure is up 14.3 percent from last year and the largest in the group's history.
The group said it foresees many adverse business conditions this year, such as high oil prices and turbulent foreign exchange rates, but it has decided to go ahead with the largest investment under its mid- and long-term development plans.
In its search for new growth engines, the group has allocated 1.1 trillion won for R&D, up 10 percent from last year. The group has also increased capital expenditures by 900 billion won, to 6.9 trillion won or 15 percent from last year, to be allocated for the exploration of natural resources, especially energy, and for the information and communications sector in order to boost its competitiveness.
The investment figures are consistent with past trends that saw the group increase its annual investment by 10 percent every year.
Chairman Chey Tae-won participated in a 150 minute-long panel discussion with four panel members selected from its affiliates along with 30 attendees Jan. 3.
The chairman, through an inter-communication hook-up, said the rapid change is most closely related to the group's survival and improves conditions for its future growth, it's not just a matter of selection in a way to express the crucial importance of change to the group.
Chey warned that if the group falls behind the pace of change occurring around the world, it won't make it, adding that the launch of the CIC (company in company) system in the group was to cope with the latest changes in management trends globally. With the CIC system, the affiliates now have to conduct autonomous operations by organizational units, although each affiliate operated independently in the past.
According to the CIC system, a business unit should act like a company unto itself and be accountable for its operations.
Asked to explain the group's management strategy for this year, Chey said globalization, digitalization and the pursuit of happiness are the three mega-objectives for the group.
"The entire world appears to be caught up in the need to move in those three directions and SK Group, for its own survival, should also make changes in those directions,"the chairman stressed.
With the new year being the year of rat, one participant asked the chairman if he has a particular rat in his mind. He answered that he thinks of the rats in the book "Who Moved My Cheese?"in which they react to and cope with changes, which gave him a lasting impression.
He also talked about a rat in a French movie called, "Ratatouille,"in which the rat showed that if one tries hard enough, he or she could accomplish things beyond their imagination.
Asked what his New Year resolutions were, the chairman said if one begins to blame everything that surrounds him, he can never feel happy. He should accept and be prepared for changes and learn to enjoy hardship and changes.
SK installed an inter-office broadcasting system this year so that company news can be broadcast to its staff, even to its overseas units such as in China.
Chey said being big spells failure in the corporate business world, which is why the SK Group introduced the CIC system among its three large affiliates, SK Energy, SK Telecom and SK Network.
Group officials said the chairman has been stressing the importance of the new management system as if he were an evangelist for CIC. He said the current management system has reached its limit lately, meaning some of the group's affiliates have become too big and need a new system.
"Each operation department should operate like a company unto itself and be accountable for its operations so as to speed up its growth,"Chey said. nw

Chairman Chey Tae-won of SK Group.