In his New Year¡¯s message, LG Group Chairman Koo Bon-moo stressed fundamental and anticipatory changes to overcome a crisis and ensure sustainable growth. He delivered the message on Jan. 4 in which he put forward three management tasks advancing its business structure, innovating the way LG companies do business, and setting forth substantive changes through thorough action.
In a reshuffle of executives made last November, LG Group Chairman Koo transferred LG Electronics Vice Chairman Koo Bon-joon to the head of the division responsible for creating new growth engines at LG Corp., the holding company of the group, and attached more focus on B2B business. Vice Chairman Koo is now charged with the automotive parts and energy solution segments, core components that the B2B the group badly wants to nurture as future growth engines.
Stressing anticipatory changes, the LG Group chairman has led LG¡¯s growth in exports, which have earned two thirds of its annual total from abroad. LG Group saw its sales jump to 150 trillion won, a five-fold surge from 30 trillion won in 1994. This is in conformity with Chairman Koo, 21 years in office, who advocates market leadership.
Chairman Koo emphasizes tenuous and thorough execution without defining boundaries to attain market leadership.
Koo Bon-moo¡¯s efforts to nurture a secondary battery business have come a long way.
Looking back at 1991, LG Group Chairman Koo, then group vice chairman, made a business trip to the United Kingdom Atomic Energy Authority in which he watched the development of a secondary battery. Recognizing the secondary battery as the group¡¯s future new growth engine, he brought a sample of the rechargeable battery and told his R&D staff to research secondary batteries.
In 2001, views surfaced that LG needed to give up the secondary battery business, which had fallen far behind Japanese technology. Chairman Koo told his executives to concentrate on investments and R&D activities and encouraged them to make a fresh start with a sense of conviction.
Chairman Koo¡¯s management strategies have paid off. LG finally succeeded in signing a deal to supply batteries to GM¡¯s Chevrolet Bolt EV and the largest-ever energy storage system contact. The deals have contributed to helping LG solidify its spot as the global No. 1 EV battery maker and gain an upper hand in the next-generation ESS battery market.
Chairman Koo¡¯s management strategies can be read well when he appointed Vice Chairman Koo Bon-joon to take helm at LG Electronics in 2010. Vice Chairman Koo pledged to restore LG Electronics¡¯s pride and honor and begin what is called ¡°future management¡± through overall changes.
At that time, Vice Chairman Koo put forward five management strategies continuously developing innovative items to gain market leadership; securing premier quality; implementing customer-based business strategies; creating an environment to nurture human resources; and creating a corporate culture based on autonomy and creativity.
LG attached top priority on expanding investments into R&D activities to explore new growth engines. Despite the business hardships, the group raised R&D investments from 2.7 trillion won in 2010 to more than 3 trillion won in 2012. The electronics company chose investments in long-term growth, rather than immediate business performances. LG Electronics released trend-setting products based on its R&D competitiveness. LG Electronics chose to enter the organic light-emitting diode (OLED) TV market as a breakthrough to overcome the saturation of the existing flat display TV market.
The group has devoted itself to changing its fundamentals. It has attempted to transform LG Electronics, a B2C (business to consumer) company, into a B2B (business to business) one. LG Electronics, which has been grappling with the saturation of such mainstay businesses as TVs, refrigerators and smartphones, has been accelerating B2B businesses as automotive parts and energy as future growth engines.
Vice Chairman Koo¡¯s transfer to the head of the New Growth Engine Business Team may be construed as steps to foster new lucrative businesses in accordance with LG Group Chairman Koo¡¯s future management strategies.