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Korea Business Interview Series
Korea Business Central Exclusive Interview - Tom Coyner, Author of Mastering
Business in Korea
Go the
below URL to hear the 36-minute interview with Tom Coyner,
author of Mastering Business in Korea.
http://www.koreabusinesscentral.com/forum/topic/show?id=3463326%3ATopic%3A2945&xgs=1&xg_source=msg_share_topic
Full transcript of interview, held on January 13, 2010:
Tom Tucker:
Hi and thanks for joining us today at KoreaBusinessCentral.com. My name is
Tom Tucker. I’m the host and today our topic is mastering business in Korea.
Joining us is author and consultant Tom Coyner who has written a book by the
very same title, ‘Mastering Business in Korea.’
Tom Coyner is President of Soft Landing Korea. He has more than 20 years of
experience in Korea and Japan working in management positions for American
firms. He originally came to Korea as a Peace Corps volunteer and he has an
MBA in International Business from the University of Southern California.
Tom, thanks for joining us for this podcast. It’s great to have you.
Tom Coyner:
Well, thanks for inviting me.
Tom Tucker:
You got it. What is it about Korea that has led you, or has caused you, to
let it become such a big part of your life and your professional life?
Tom Coyner:
I think the opportunity to work in a very vibrant, developing economy which
is no longer, really, a developing nation, that is, a newly emerged
developed country makes it an interesting place to do business.
When I was in Tokyo, clearly a developed economy, it had a lot of its own
opportunities and challenges. But it’s, in some ways, more interesting to be
in a nation that has just broken through that glass ceiling, if you will,
from being a ‘wannabe’ country to being a fulfilled, developed economy.
Tom Tucker:
What is it about doing business in Korea that is particularly different or
unique?
Tom Coyner:
I think there are a lot of things and it’s hard to sort out what is the most
unique thing; but probably, the fact that a large part of the opportunities
are largely concentrated in one huge metropolitan area which, of course, is
Seoul, not to say that there are other important opportunities.
But, everything tends to gravitate towards Seoul which is a good thing; in
some ways, while a bad thing for the nation. And the fact that since there’s
such a high concentration of opportunities and customer expectations within
the Seoul area, it can be very challenging for foreign companies to be able
to fulfill customer’s expectations when, so often, after-sale support issues
are expected to be remedied, at least as far as feet on ground is concerned,
within an hour of a customer’s phone call.
So, even in Japan, you often have some disparity. If you get a phone call
from Fukuoka, then they would understand. It may take a while to at least
fly someone down there from Osaka or Tokyo. But in Korea, there’s a very
high expectation for immediate support and service.
Tom Tucker:
You touched upon this just briefly regarding western firms being successful
conducting business in Korea; specifically, in the Seoul area. How tough is
it for western firms, for western executives to come and do business in
Seoul and what’s the key to success?
Tom Coyner:
It’s actually not as difficult as it may seem on the first glance.
Obviously, there’s a language and cultural different. But there’s also a
huge number of Koreans who’ve lived and studied abroad who are often acting
as the front people unlike, for example, Japan and some other places.
These are not simply English specialists who may not really have a good
grasp about their own business. But rather, there are a lot of people who
have moved into serious decision making capacities who have their MBAs and
PhDs from European, American, Australian, and so on, universities.
That makes it a lot easier so that, unlike China and Japan, if you’re
expected to be a long-term expatriate, you really are not actually expected
to master basic Korean. Obviously, if you can, that’s a big advantage, of
course. But, it’s not as much of a stumbling block as would be the case in
China and Japan these days.
Tom Tucker:
Okay. Well, for non-Koreans, what would be the most challenging thing for
them, or the hardest thing to get used to then, when it comes to doing
business in Korea?
Tom Coyner:
I think the thing I got out of my book which entailed interviewing a couple
dozen executives, most of them expatriate, was the understanding and
appreciation of how much up-front investment of time and energy you need to
cultivate personal relations.
There’s a natural tendency for western executives to come in and start to
talk turkey almost immediately. And Koreans who have worked abroad kind of
understand that. But at the same time, they want to build a strong personal
relationship, because they want to understand the other party and decide
whether or not they can trust them and, ultimately, do business with them.
Often, I heard comments of, “If I were to do things over again, I would’ve
invested much more time getting to know my serious prospects and my business
partners before rushing into business.”
Tom Tucker:
It sounds to me as though that is kind of a similar attitude in maybe some
of the other Asian countries as well; that emphasis on spending time
up-front building that relationship first.
Tom Coyner:
Absolutely. I think this is true in Japan, for example, because I have spent
quite a bit of time there. But at the same time, I think it’s much, much
more so here in Korea.
Tom Tucker:
Okay. What are Korean attitudes toward non-Koreans conducting business in
their country? I’m going to guess that they’re fairly open and receptive.
Tom Coyner:
They’re open and receptive. Obviously, they would prefer doing business
whenever possible with other Koreans. It’s a natural human tendency. But if
you have a solution or a product that can offer the Korean party some
competitive advantage in the Korean or international market, of course
they’re willing to give you the time of day.
The question, of course, is how much are they trying just to learn good
ideas to apply toward their own goods? How much are they really interested
in spending money to engage your products and services? So, you always have
to be a little bit careful.
You have the same problem in Japan and other Asian markets as well. But
generally, the Koreans – they’re very intellectually curious. This is an
incredibly competitive society, both on the business and social level, and
any sort of new advantage that may be offered will be seriously considered
by the other party.
Tom Tucker:
If there’s one message that Koreans and the Korean business community would
want to get out to the rest of the world right now, what would it be?
Tom Coyner:
We’re hot. In other words, Korea is leading the OECD countries in recovery
from the global recession; this is a very big, vibrant economy often
overshadowed by the opportunities and glamour of China and the longstanding
strength of Japan.
Obviously, right now, China is, in the macro terms, a bigger opportunity.
But, the interesting thing is people make more net profits out of Korea than
they do out of even China. This is the thing that it’s important for people
looking at Asia to understand. China, to a large degree, is kind of like the
Sirens’ song where people look at the big numbers and say, “Gee. If I can
get a quarter of 1%, my corporation will be wealthy.”
Well, the thing is, how much of that money is going to be net profits? You
have to be able to send something back to your home coffers, which is a
totally different matter, whereas, Korea has a very strong set of laws and
regulations.
It is a true functioning democracy and Korea has gotten over – most of its
notorious perfectionism, so that each success of government has been pushing
both the private and public sectors to become better integrated into the
international community. Korea recognizes that its future depends on being
internationally competitive.
And it’s no longer mercantilist to the point that it discourages a lot of
people as was the case. It’s really a good place to do business.
Tom Tucker:
It sounds like it. What would you say are the threats right now for the
Korea, particularly for the economy and what are the opportunities ahead?
Tom Coyner:
The threats, obviously, is the global recession even though Korea is doing
remarkably well to a large degree, including its own domestic market. But it
is very much an export-oriented economy, so if the other countries stumble
in their recovery or if Chinese mercantilism discourages countries from
avoiding protectionism, then Korea, as well as the rest of the world, is
going to be facing a lot of problems.
The opportunities are that Korea is putting – it’s still somewhat centrally
– I wouldn’t say controlled, but directed economy -- in that the government
is putting a lot of emphasis on things that might be considered green.
There’s the Green Revolution Drive to get the economy focused more on being
environmentally friendly in things such as waste management, LED technology,
things that pertain to energy; conservation saving.
During the last five years, there has been a remarkable rise in awareness
within the business and public communities in the need for the environment
here. And this has been translated into new business opportunities.
If the listeners are involved with anything that pertains to ecological
development; waste management, green technology, this is a very good place
because not only is Korea having its own internally developed technologies,
it’s also looking for solutions to embed into its products and it would be
good to first come into this market, embed your technologies or ideas into
the local market.
And then, as these companies start expanding further abroad and will be
needing international partners, you would already have, in a sense, a
hometown advantage, having first worked with the company domestically before
it started going internationally.
And of course, there are companies already possessing global brands and they
may be interested in whatever the listener may have to offer for their
international business.
Tom Tucker:
Alright. Well, obviously, Korea is going green like the rest of the world.
That’s certainly the case. What are some of the myths or misperceptions that
might exist about doing business in Korea or doing business with Koreans?
Tom Coyner:
Well, I think a lot of the myths are actually perpetrated by the lawyers
here, both Korean and international, along the lines that this is a very
difficult and expensive place to do business.
The two most common challenges being cited as making it difficult to do
business are labor inflexibility and the lack of transparency. And at the
core, there are hardcore realities, but they are greatly exaggerated, since
once a business person has a particularly tough labor problem, of course,
often what he or she will do is call an attorney.
If the person is finding himself or herself being under regulatory scrutiny
to the point that it’s becoming difficult to handle, of course, what he or
she will do is call an attorney. And the attorney will basically say, “Well,
look - this is going to be a very difficult process. But, since this is Korea, it
will be something that’s manageable, but it will be expensive.”
The fact is that most attorneys here, frankly speaking, while very
intelligent
and well-educated are commercially incompetent because they are more
involved in billing hours than serving their clients.
And so, they play this long game working with government and, sometimes,
other individuals where they are able to bill or excessively bill extra
bodies onto an assignment and then bill large amounts of hours.
On an hourly basis, the billing for a legal firm is not that outrageous. But
the fact is how many hours are billed on relatively simple things that are
artificially extended. It’s really outrageous.
The funny thing about it is it becomes part of the folklore because you have
expatriates come into market and they find the other old hands and it’s,
“Oh, yeah, yeah. Labor and inflexibility; it’s something you have to watch out
for. And good golly, once you get involved with it, it’s going to be
horrendously expensive. Let me tell you my story.”
And then, they’ll usually end up talking about an incident. But often,
they’ll focus on how much time they had to work with a law firm and how
expensive it was.
Well, that becomes common knowledge and then another source of common
knowledge is going to one of the chambers of commerce meetings. And guess
who’s there? 15-20% of the people attending these meetings are attorneys.
So, what happens is there’s this big game that goes on and everything is
worked on the caveat where you have to understand “this is Korea.”
But in fact, if you are able to manage correctly, you can find an efficient,
modern lawyer who cuts through a lot of the nonsense, who is not mainly
concerned on billing you extra hours and playing a prolonged game with
government authorities rather than getting to the core of business
efficiently. If you can do that, you will find that Korea is much less
difficult than what is purported. But, there’s been this been this big
mythology that’s been largely inflated by the legal profession here.
Tom Tucker:
You know, it seems as though in many places, often times, the lawyers and the
legal profession get in the way of doing business. For western executives,
western companies coming to Korea, this is obviously something that they’re
going to have to contend with.
For those executives, for those firms that are thinking about, or for
entrepreneurs, that are thinking about coming to Korea to do business, to
start a business, would this be something that you would recommend or advise
against?
Tom Coyner:
As much as I rail against attorneys here, at the same time, to be fair about
it, many of the problems created by excessive legal billings are actually
created by the expatriate managers who overrate their ability to manage
something so when things get out of control, they cover their tails by going
to the most expensive legal firms and pass off what once was a manageable
situation that has festered into being a mission impossible situation.
I’m not saying you should not use attorneys. In
fact, I would recommend, if anything, one should preemptively use attorneys at
the beginning when problems are still small and manageable.
And one of the things is – I think it’s really important to look at
attorneys if you’re setting up businesses or operations when you have more
than one shareholder.
Tom Tucker:
Not that I want to spend too much time talking about this attorney issue,
but back to the question, though. Just in terms of western executives,
western entrepreneurs, western firms that are considering coming to Korea to
do business, is the level and degree of difficulty of conducting business in
western firms – or for western firms to conduct business in Korea – is it so
high and so insurmountable that you might advise some people against it? Or
do you say, “Come to Korea. Conduct your business. This is a good place for
you?”
Tom Coyner:
Definitely the latter. What I was trying to point out that a lot the issues
or the reputation of Korea is really artificial. And if anything, it’s
getting better year by year.
Tom Tucker:
Okay. Well, that’s certainly good to hear. How about advice or insights for
a non Korean who might be interested in seeking employment in Korea? What
would you say to those people?
Tom Coyner:
The thing is that there’s really no substitute by getting your feet on the
ground here and getting to know people. I often get inquiries by email or
even phone calls. Actually, as often as the case is, it’s not only what you
know, it’s who you know and you have to go out there and meet people.
Of course, one way a lot of people have started – younger people that have
come over and taught English, using that as a platform to get out to know
society. If you’re the mature business individual, I think probably the best
way you can do is try to conduct business in the capacity of your current
job and from there, build relationships and be able to assess whether or not
it’s worth your while to come here.
Tom Tucker:
Okay. Good advice for sure. Shifting gears here a little bit, you described
Korea in your book as a political and economic miracle. Why do you describe
them that way and how is that the case?
Tom Coyner:
Well, Korea gets a lot of recognition for being one of the Asian tigers and
Korea continues to be an Asian tiger. In going from a colonial exploited
economy to being something that was kicked into gear, as you might put it,
by a dictator, Park Chung-Hee, that later moved from being a very centrally
directed economy to being much more open, initially, mercantile and now
truly cosmopolitan economy. A lot has been written about that and recognized
by many business professionals.
At the same time, I think often Koreans are not given enough credit for
being the true democrats of East Asia. I cannot think of another country or
society that is literally more democratic than South Korea.
And yet, we need to keep in mind that just barely a century ago, this was a
feudal kingdom and it went, again, under Japanese colonial rule into a
military dictatorship and within the course of a generation, moved from
military dictatorships into being the most genuine of democratic republican
governments in this part of the world.
And that, in itself, is a huge, huge development and it’s something that the
Koreans have a full right to be justifiably proud.
Tom Tucker:
Yeah, for sure. I’m trying to touch upon so many points in our conversation.
That subject alone that we just talked about could be something we could
probably spend hours talking about I’m sure. And perhaps, that will be a
topic for another conversation.
But, at least in this initial conversation with you, I just wanted to hit
upon a bunch of high points to try to create some valuable listening for our
listeners as much as we can.
Also in your book, you talk about Koreans – rather, you asked a question.
Are Koreans the Irish of the orient? What do you mean by that and are they?
Tom Coyner:
Well, the first time I heard that as a Peace Corps volunteer, I didn’t
really take it too seriously. I just kind of brushed it off as a bunch of
expatriate stereotypes. But actually, having spent quite a bit of time the
last decade getting close to the Irish community abroad and having been
married to a Korean for over 30 years, I can attest there is a lot of
similarity as I pointed in the book.
And actually, I should point out I had a number of Irish expatriates review
this list before I went to print and they agreed to what I wrote there.
Sometimes, actually, the Koreans have also been called the Italians of the
Orient, too.
The point being is the Koreans wear their hearts on their sleeve. They’re
very open. They’re known for being and having tempers. But, the thing about
their temper is they get over it real fast. They don’t hang on grudges long.
They laugh easily, they cry easily, they get into fights easily, they
forgive easily. They are very religious people be they Christian, or
Buddhist or Confucian. They are very, very family oriented.
When I visited Ireland on a couple occasions, I was struck how similar the
behaviors were. For example, in Ireland on a Sunday evening, even to this
day, the extended families will often get together at a home and they’ll sit
around having coffee and maybe a little bit of whisky. And then, they’ll
take turns entertaining each other. This is a tradition that’s very much in
place in Korea.
An interesting thing is when I’ve spoken to a number of young Irish here,
they said the one thing about Korea is that they never really had culture
shock. “Okay, there’s the difference of the language. But compared to other
countries where I’ve lived, I haven’t got the culture shock here.”
Tom Tucker:
I’ll be darned. That’s fascinating. That’s interesting. And that idea of the
tight-knit family and sitting around the table together entertaining each
other on a Sunday night sounds like that’s a neat thing and, perhaps,
something the rest of us in other parts of the world should move back toward
to because that sounds like a neat trait and a great quality.
Tom Coyner:
Yeah. Well, you see oldsters and even teenagers spending this time, although
the teenagers will excuse themselves later on in the evening, to go out and
hang out with their peers. But, even the teenagers don’t feel availed upon
that they have to be there with their family members. There’s this attitude
that family comes first. It’s a very positive thing.
Tom Tucker:
Yeah. You talk about also examples of what you call ‘predominant Korean
thinking.’ Predominant Korean thinking. What do you mean by that and can you
share an example with us?
Tom Coyner:
That’s a big topic in itself. Essentially, predominant Korean thinking
entails, among other things, their concern of how one feels about something
as opposed to how one thinks about something.
In a sense, this is not uniquely Korean. But, I think it’s by maybe a
western perspective as an exaggerated human trait. There’s this attitude
called kibun, which is a little bit different than the Japanese
kibun. When the Japanese say kibun, normally they are
talking about food and beverages - more of a physical sensation.
In Korean kibun, it really is more of a psychologically or emotional
statement about how one feels about oneself, how one feels about another
person. Often, you’ll hear the terms kibun-i jowayo, kibun-i nappoyo:
had a good feeling for the person or a bad feeling about something.
This goes back to the need for building the personal relationships, in part.
But, Koreans will first think about how do they feel about themselves
interacting with something or someone and how they feel about the other
person.
Also, they’re very, very mindful about how they perceive the other person
feeling about them and the situation. That can be a little bit exasperating
for the western executive because he says, “Well, look. Everything is on
paper. We’re making profits. I don’t see what’s the problem. Okay, Mr. Kim
is a little bent out of shape about this. But hey, let’s rock and roll. This
is always a bit of a lumpy road. And now, Kim is saying he doesn’t want to
do business. What gives?”
And the fact is Mr. Kim’s kibun has been hurt or disturbed by
something that Mr. Smith has said or done, or what has happened. At least
temporarily, Mr. Kim just doesn’t want to talk to Mr. Smith.
Tom Tucker:
It sounds like they are very sensing, feeling, emotionally perceptive people
as a whole.
Tom Coyner:
That’s right. Another example of this is the concept called Nunchi,
which a wonderful skill to develop which I picked up here as a Peace Corps
volunteer and I’ve used around the world.
The idea is looking into the eyes, or the windows of the soul, of the other
person. The Koreans are very good at this, because they are so kibun-oriented
that a good way to sense where the other person is coming from is looking
into the other person’s eyes.
And so, the nunchi can be roughly translated as “eye power,” if you
will. And someone who’s really adroit in assessing out a situation involving
other people is considered a fast nunchi person, a nunchi bbarun
saram.
And a person who is just obtuse to everything is a nunchi omnun saram;
someone who is lacking in nunchi. So, it’s a good skill to develop to
be able to asses out the other person regardless of which culture which is
something I picked up living with Koreans in the countryside for a couple of
years as a Peace Corp volunteer.
And boy, you can really see what’s going on because Koreans are really
looking you in the eye, not to be direct. If anything, Koreans tend to be a
little less direct than westerners. But, they are trying to figure out where
you emotionally are at a given moment.
Tom Tucker:
I see. And this kind of leads me into the next question and this pertains
and relates to what you just talked about. If there’s one key to getting
along with Koreans, what would it be?
Tom Coyner:
Be open, and honest and even a bit emotional. Open the kimono about yourself
as a person, even your family a bit. Koreans really distrust someone who’s
only going to talk about business or doesn’t want to talk about themselves
as individuals or their families.
Koreans also are very, very age concerned because this is even more
Confucian of a society than China. So, they’ll want to know if you’re older
or younger than them because that has a big impact on their thinking.
But, they also want to know about you. They also want to know about your
family - do you have children? How are your kids doing? They won’t ask
about, so much about how you and your wife are getting along. But, they will
be interested in how many kids, what the educational level is of your kids,
what sort of jobs are they doing if they have graduated and so on.
They want to really get to know you in the entirety of the other person and
they expect you to have a similar concern. If you don’t have a similar
concern, then you’re looked upon as being too cynical and exploitative, if
you will.
Tom Tucker:
Everything you just mentioned, I’m guessing, might be included in various
ways in the Eleven Commandments that you have written about for doing
business in Korea. What would be the most important commandment?
Tom Coyner:
The eleventh one. The eleventh one is – actually, the first ten I actually
borrowed from a friend of mine; a Korean executive – a good, dear friend of
mine – which talks about how to use business cards for meets, for
connections and so on and so on.
But, the eleventh commandment I borrowed from another friend; a long term
expatriate. The guy has been successfully been doing business here for 40
years. And that is, as a foreigner, you do not need to follow all ten
commandments.
If you are unable to follow the ten, such as most important, like you can’t
just walk into a place unless you have some personal introductions. --
Koreans are pretty much constrained by that. But as a foreigner, as in any
other place, often the rules do not fully apply.
So, what that means -- if you do your homework and you get all your ducks in
a row, you can go direct to business opportunities without the formal
introductions that a Korean would normally require.
Tom Tucker:
So, that is the eleventh commandment, that you can take advantage of those
opportunities that you see if you’re prepared and ready and got your case
ready to go?
Tom Coyner:
Down to the meticulous detail, you bet.
Tom Tucker:
Okay. Cool; very, very interesting. We just have a couple of minutes left
here. Just real quickly here on this. What would you say would be the keys
to “making it” in the Korean market?
Tom Coyner:
I think the key would be realizing that you can’t come in here on an
opportunistic basis. You need to think on at least the medium-, if not the
long-term perspective. You need to recognize that, probably, it’s going to
take you a bit longer to get your first substantial sale and the worst thing
that could happen is if you hit into a big opportunity right off the bat and
then realize that you have not developed the customer support infrastructure
to service your first truly demanding customer.
The thing about this is if you’re in Los Angeles, New York, London or
wherever, if someone from Korea came in and wanted to do the minimum
investment and yet wanted to sell you a substantial product and service that
required post sales support, how likely is that Korean company to succeed in
your market and why do you think it’s going to be different for you to come
zipping in on an airplane, and think you’re going to set up a small
operation and start making money?
You really have to take Korea as a serious market as you would take your
home market to be. Korea is no longer a secondary, tertiary market. It is a
very substantial, sophisticated market that requires substantial, and
sophisticated input and preparation to be here.
Tom Tucker:
Well, it sounds like great advice and a great point. Indeed, that certainly
makes sense to me and I’m sure it does as well for any other business person
who has any amount of savvy at all. Anything you want to say quickly in
closing?
Tom Coyner:
The funny thing is, often, when I talk to someone who is not geographically
savvy who might say, “I’m from Korea.” And they say, “Well, where are you
from? North Korea or South Korea?” And I point out it’s South Korea.
But, it does belie a problem is that South Korea is often hampered by the
newspapers reporting what’s coming out of Pyongyang, North Korea. Obviously,
they’re two very separate, different countries and year by year, they’re
becoming more and more different.
People often are concerned about the political risk of outbreak of
hostilities. I’d rate that slightly above zero.
And so, I guess the one point is please don’t confuse North Korea with South
Korea even if they have similar names.
Tom Tucker:
It sounds like another great point, indeed. Tom, I’d love to be able to chat
with you much longer. Again, we covered lots of different points that we
could’ve spent a lot more time talking about each of those and, perhaps, we
can talk more in conversations later on down the road and it’s been a real
pleasure. I really thank you for joining us for this podcast interview.
His name is Tom Coyner. His book is Mastering Business in Korea and
it’s available on Amazon.com and Seoul Selection. Tom, thanks for joining us
today.
Tom Coyner:
Thank you for inviting me.
Tom Tucker:
You got it. Again, my name is Tom Tucker. Our site is
KoreaBusinessCentral.com. Thanks for listening and be sure to join us and
visit us regularly as we provide more information, content and contacts for
you. Thanks for listening. Have a great day.
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