Moon Bum Shin
Designation: Managing Director, LG Electronics India
Career: Started career with Hyundai; with LG since 1986; became head of Middle East and Africa in 2001
This is my sixth year in India. The first three years I spent travelling, listening to our customers, seeing the real India to gain insights. I typically travel Tuesdays to Thursdays, 12 days a month, to our 40 branches and 80 offices across the country. I fly and wherever there is no airport I go by car.
What strikes me about India is its rich civilisation. Whenever I visit a branch I make it a point to see famous historical places in the area. I feel places with rich history have a great future. India has many things that other countries don’t have. Of course, it has the second largest consumer [base] in the world. I like the emphasis on education — Indian parents are so keen to educate their children. It is similar to what I see in Korea. Education is the engine that has made Korea what it is today. Third, India has the second largest [population of] English speaking people and this will only grow with literacy and prosperity. This is a country rich in mineral resources. It is also at the centre of several emerging economies such as central Russia, South East Asia, Africa. LG has plans to nurture India as its future export hub.
LG in India
LG India contributes 6 percent to the global revenues. By 2015, we see it growing to 12 percent. Our 2010 domestic revenue is around Rs. 17,000 crore and we are targeting Rs. 45,000 crore by 2015 — second to the US. At the moment we are bigger in India than in China. In China, which is moving fast into the premium segment, we play in only certain products unlike India where we play in all product categories. In India, we want to grow with the consumer, first securing their mindshare and then move with them up the value chain.
Early this year we opened up a learning centre and a design centre. By this year end we will have an R&D centre with 200 people that will focus on domestic needs. We see India as a very strong hub for developing our global platforms with its big and cost competitive talent supply. The reason behind LG India’s success? I think management by local people. We have 4,000 plus employees with only 30 Koreans. Most key decisions are made locally. My basic job is to build a long-term strategy [for India] and communicate effectively to the HQ.
LG is unique because it has businesses in 10 different industries. We have to compete with companies like Nokia who are single product category companies, while our product portfolio is diverse. Our challenge is to be able to send a unified message and create a strong brand. Too many messages create confusion. We launched one such campaign at the beginning of this year: “Life is wonderful”.
Our second challenge is that India is a very big operation. Though we get some guidelines from our headquarters, sometimes we need to create our own guidelines. Our headquarters has given us more flexibility than any other country. India is not one country but many in one. It is like a globe within a globe.
In the next three years, we will be investing Rs. 1,500 crore. Our learning centre, R&D and design centre will be expanded. This R&D will cater to our global needs as well.
Difference between doing business in India and Korea — I find the land price here very high. For instance, the land price in Noida is much higher than that in a similar locality in Korea or even China. It is because of this that our suppliers are not coming to India. Infrastructure is still an area of concern. The speed of road construction cannot catch up with the increase in number of cars. Warehouse logistics too is still unorganised and inefficient.
India versus Korea
The Indian and the Korean mindsets are very different. In Korea, everybody is in a hurry. Speed is the main thing. Koreans set very high targets. We say 5 percent [is] impossible — 30 percent, possible. Indians on the other hand are very logical. They are very individual driven. They will say ‘my department is more important than the company’. Koreans believe in team work, [for them] individual is weak.
In Korea, there is a premium on loyalty. Here in India, the more you job hop, the higher is your value. So incentives are structured accordingly. Those who complete three years get 400 percent bonus which is linked to overall company’s performance. Those who complete five years get 600 percent. We launched this initiative two years back. Our attrition rate is low — it was 4.6 percent and has now gone up to 7 percent. But in Korea attrition is overall lower.
There is also a difference in the work culture. In Korea, the company comes first. In India family is first. People want to take leave very often. It could be for marriages or funerals and not necessarily in the immediate family.
Indians often wait till the last minute. They will say ‘Mr. Shin, no problem, target is target’ and then suddenly I will realise targets will not be met, things won’t be done on time. In the beginning I couldn’t understand this and I used to get upset. Now I have learnt. I think saying no is considered shameful here. I am trying to decrease the cultural gap between us and the management.
My Life Here
My family is in Korea and I live by myself. Typically, when I am not travelling, I go for a walk at 5 a.m. By 6 or so I take a shower and get ready for office. Though I have a cook, I like to make my own breakfast. I also like to iron my own clothes. I reach office by 8 a.m. and leave by 6 p.m. I like playing golf on the weekend. Almost every month, I travel to Korea.
My job is hectic. I travel about 10 days a month within the country. Every day we have at least 30 people from Korea visiting us because India has become important. Three to four days in a week I have to take them out for dinner. My favourite places are the Hyatt, Radisson, Sheraton and China Kitchen in Delhi. I like naan and tandoori chicken. In the evening, at times I like to watch American Idol. I like to sing and dance, and read books.
One thing I have worked hard on is to remove politics in the office. I have tried to break groupism, eliminate individualism and remove unnecessary competition between departments.
I interact with [the various departments] twice a week. It’s [usually over] a luncheon meeting where I listen to them and share my thoughts. Every month we have a regional managers meet, after which we go out for dinner.
Tips to survive in India? I would say management by locals, eliminating politics and individualism, and safeguarding integrity. [Employees] should think that the company is treating them fairly and there should be transparency.
(As told to Malini Goyal)
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(This story appears in the 24 September, 2010 issue of Forbes India. To visit our Archives, click here.)