LG back on track

Optimus G

Chairman Koo aims to foster creative DNA

LG Group, one of the country’s largest conglomerates, has cemented a reputation for playing it safe rather than taking risks.

But with its positions in major markets such as consumer electronics and mobile phones becoming precarious, Chairman Koo Bon-moo is showing unprecedented boldness in terms of business strategies.

It’s obviously impossible to sell high-risk, high-reward moves in these economic times without optimism. This is exactly what Koo tried to inject across LG’s many subsidiaries, providing each business unit with further autonomy to experiment and explore new opportunities.

This shows that Koo has become an entirely different executive than when he first took the helm of Lucky-Goldstar, LG’s predecessor, in 1995.

The younger Koo was a conservative strategist who demanded executives develop astute knowledge about risks and measured every business decision carefully.

Ironically, the sluggish world economies in recent years seem to have inspired Koo to be more of an adventurous gun-slinger type, attempting big move after big move without fretting too much about the downside.

It could be said that Koo’s chutzpah is a result of his urgency.

LG has been struggling to compete with local rival Samsung Electronics in televisions and has been reduced to an also-ran in the smartphone market that is shaping up to be a Samsung-Apple duopoly.

LG is well positioned for new growth sectors such as rechargeable batteries, but these haven’t matured enough to deliver maximum profits.

LG’s window to make a big, difference-making splash is narrowing and Koo apparently knows this. Company officials say that his transformation has resulted in a dramatic reshaping of corporate culture.

“Chairman Koo is no longer satisfied with predictable performance in LG companies and inject a new system that better inspires creative input. The changes experienced by employees are often are shocking, but we know the chairman is committed to these changes,’’ said LG spokesman Jung Jeong-wook.

LG has been known for its strictly hierarchical corporate culture and emphasis on “harmony.’’ Koo wants a more challenging and dynamic workplace, like a more intense version of Google, company officials said.

“We are old as a company. To become a market leader, we should change from top to bottom. We need a different DNA that has never been seen over the past decades. Faster execution and implementation in business decisions should follow,’’ Koo was quoted as saying in a recent meeting with executives.

Even during his more conservative days, Koo occasionally flashed a penchant for big moves, including the decision to buy a 57 percent stake in American television maker, Zenith.

LG officials say the acquisition was better in reality than it looked on paper because it enabled executives to learn Western management tactics and improve their understanding of the U.S. market.

Koo was also deeply involved in the corporate rebranding from Lucky-Goldstar to LG, which he believed was a more marketable name for global consumers.

LG has also shown more feistiness in its relations with competitors. It recently sued Samsung at Seoul Central District Court for infringing on its patents for organic light emitting diode (OLED) displays, the first time the two Korean technology giants have scheduled a fight in court.

In a separate filing at the same court, LG also claimed that Samsung has been unfairly portraying its refrigerators in television advertisements for its own products.

Can Optimus G be the game changer?

A lovechild of the new and adventurous Koo is LG Electronics’ new Optimus G smartphone.

G stands for “great’’ and company officials are confident that the handset, equipped with the latest technologies in processing powers and displays, is good enough to singlehandedly put LG back on the map for mobile internet devices.

The phone is equipped with the latest high-definition panel by LG Display, the company’ screen-making affiliate, that provides wider viewing angles and sharper pictures. LG Display’s “zero gap touch’’ technology also allows the Optimus G to be significantly thinner than smartphones with similar capacity.

Market analysts expect LG Electronics to sell over 1 million Optimus G smartphones by the end of this year and have no big questions about the phone’s further growth.

“When you check out LG’s previous cycles in mobile phones, it expanded the number of its target markets from South Korea to Japan, the United States and Europe, sequentially,’’ said Cho Sung-eun, an analyst at Samsung Securities.

The Optimus G is ready to roll out in countries in those regions via major carriers.

With LG Display, LG Chem and LG Innotek also partnered with LG Electronics under a direct order from Koo in the production of the phone. His request was simple; “You should make a highly-competitive product to beat our rivals.’’ <The Korea Times/Kim Yoo-chul>

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