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Richard Levick

October 15, 2019

Challenging the Korean Miracle

My father fought in the Korean War. It was quite deliberately the last foreign country he visited before he died. His love for the country, something he passed on to me, was so strong that he planned the visit knowing it was his last. It is with this heavy heart that I write my seven points below not as a criticism but as a warning. Change is coming.

After the Korean War the concept of Chaebols – a business conglomerate structure – was born. They are so successful that today five control nearly 60% of Korea’s GNP and two dozen are well known globally, including Samsung, LG Group and Hyundai. In the Internet Age, Chaebols, like all companies, face new challenges. But unlike many other global companies, their rarified standing and deferential culture make this risk existential.

Last week I had the honor of speaking at two events in Seoul on emerging risks. What is fascinating to me about Chaebols is that we can see ourselves in them. In this disrupted age, you don’t have to be a Korean company or looking to expand into Korea to see yourself in their challenges.

Like all generalities, there are exceptions to each of these points, but in my own experience as well as those of journalists and Korean crisis communications professionals, we all share the same experience:

  1. While highly laudable, the respect for authority and “shame culture” results in bad news taking far too long to be communicated internally, meaning Chaebols are almost always running to catch up to the crisis.
  2. Like so many foreign companies doing business globally, there is an understandable desire to run the crisis from HQ, but this almost always results in a full news cycle delay, making them appear uncooperative. Worse, there is often an absence of local knowledge in the headquarters, which significantly harms the strategic response.
  3. Their love of brands means that Chaebols are seldom willing to consider non-brand strategies in a crisis (e.g., working with the local reporter first, rather than the New York Times) or considering a change in strategy due to new facts, which does not involve the respected brand.
  4. If shame drives decisions, then sacrifice of a brand, division, product or person is seldom considered early enough in a crisis to have the desired benefits.
  5. There is a strong belief that because Korean media will often write flattering features than global media will, too.
  6. Chaebols will hire crisis communications counsel, but only the most heroic will follow their advice. Most estimate that counsel is taken less than 20% of the time.
  7. Corporate communications is almost entirely relationship dependent – who are the journalists you know personally? In the Internet age, this approach has less relevance every day.

The Korea Herald, which sponsored one of my speeches, was kind enough to write a story. I hope you enjoy the read.

Richard Levick

Read: Companies need to focus more on masses in hyperdemocracy

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