In the past, most corporations in Korea moved on the strong leadership and decisiveness of their founders. Samsung led by Lee Byung-chul and Hyundai led by Chung Ju-yung are representative examples. But as they now compete for the top spot in the global market, these corporations have grown so large that the leader alone can no longer shoulder management. The role of the so-called "keyman," who sits closest to the leader, manages each field, and plays a pivotal part in final decision-making for the future, has become more important. We introduce the keymen of major corporations that drive Korea's economy and examine the roles and tasks assigned to them. [Editor's note]
"I believe the answers to management lie in the eyes of the employees I meet on site, in the operating condition of the equipment, and in the flow of work."
At HD Hyundai Heavy Industries' Ulsan shipyard, the largest shipyard in the country, there is someone who walks the dim yard alone at 5 a.m. every day. It is Vice Chairman and CEO Lee Sang-gyun, 65.
For Lee, the yard itself is a status board showing HD Hyundai Heavy Industries' condition. To know whether the constantly changing ship designs are being implemented well on site and whether thousands of people and millions of parts are meshing without gaps, Lee believes you must see the site, not a report. After joining Hyundai Heavy Industries, Lee has walked the single path of shipbuilding for 43 years. Since the launch of the Chung Ki-sun era at HD Hyundai Group, he has overseen the group's heart, the shipbuilding and defense businesses.
Upon taking office, Chung selected two vice chairmen side by side. Vice Chairman Cho Young-cheul, a finance and management-control expert, handles groupwide strategy, while Vice Chairman Lee, a production expert, leads execution strategy for the shipbuilding and defense businesses. When Chung sketches the big picture for future growth engines such as artificial intelligence (AI), autonomous navigation, and small modular reactors (SMRs), Lee's role is to realize it in the yard and turn it into results.
◇ "You go farther when you go together"… a collaboration philosophy forged on site
An ultralarge 300,000-ton (t) vessel, as long as three soccer fields, contains up to 1 million parts. Only by joining more than 100 steel blocks, each weighing hundreds of tons, within a 2-millimeter margin of error does a single ship take shape. It is the same for people. Given that thousands work simultaneously in the dock (dock, a shipbuilding site), organic movement is crucial. If the piping team's schedule is delayed, the electrical team waits; if the electrical team stops, outfitting work halts.
After graduating from Inha University's naval architecture department and joining Hyundai Heavy Industries in 1983, Lee learned collaboration structures with his whole body on site. This is why he early on etched the belief that "you go farther when you go together." Since his days as a Director in the 1980s, he did not shy from candid advice for collaboration. At every joint department meeting, executives often argued, each touting their own unit's interests. Although a mood prevailed that doing one's own job well was enough, problems eventually erupted, and it took twice as long to clean up.
"Please, let's each make some concessions and try this way. Otherwise we won't get a ship out." Lee, then a Director, spoke up. After becoming a department head, he established interdepartmental collaboration systems to untangle snarled processes, and the department heads who worked with him at the time were promoted to executive posts one after another. A broad view of the entire process was the driving force that brought him to his current position. Lee is still known to ask executives to consider two things when making decisions: "Does what I am doing align with the company's overall direction, and am I putting my own ambition first?"
◇ He was first to be deployed when the site stopped… eight years rebuilding a broken site
After overtaking Japan in the late 1990s to become No. 1 in the world, Korea's shipbuilding industry seemed to have the wind at its back. But the 2008 global financial crisis hit, and the offshore plant business, into which the companies had rushed thinking it was a lifeline, pushed shipbuilders to the brink as international oil prices plunged. Hyundai Heavy Industries also suffered an unprecedented annual operating loss of 3 trillion won in 2014 and launched a harsh restructuring.
In 2015, at the cliff's edge, Lee was urgently deployed as head of production at Hyundai Samho Heavy Industries in Yeongam, South Jeolla Province. With restructuring prompting an exodus of production experts, the site was wobbling. Lee completely overhauled process control methods. He rebuilt the partner and supply systems from scratch. Hyundai Samho Heavy Industries developed the strength to post profits even amid the slump, and Lee was recognized for the results and appointed CEO in 2018.
At the end of May 2020, just as Hyundai Samho Heavy Industries was finding stability, Lee packed up overnight from South Jeolla to Ulsan. After a string of serious industrial accidents and strikes halted Hyundai Heavy Industries' Ulsan shipyard, he was called up again as a relief pitcher. The long slump's aftereffects had eroded the organizational culture. Instead of the spirit of challenge represented by founder Chung Ju-yung's "Have you tried it?" a defeatist mindset had sunk deep, and even front-line managers were shunning site posts. As soon as he arrived at the Ulsan shipyard, he procured a large blackboard and filled it with tasks to solve.
The more he met employees and ran around the site over three months, the more tasks were added to the blackboard. He decided to straighten out the organizational culture first. Meeting employees, Lee encouraged them, saying, "The market will recover soon, so let's give it a try." He placed no limits on budgets and staffing needed for safety.
When HD Hyundai Heavy Industries posted a large loss of 800.3 billion won in 2021, Lee defined it as a "settlement statement for a fresh start" and presented a blueprint to employees. He appeared on the company's YouTube channel for the first time in the industry to explain business conditions to employees each quarter. He said, "A rebound in the market is expected soon, and orders are in fact piling up, so let's not be buried in the past and look to tomorrow." As accidents at the shipyard decreased, processes gained momentum. As Lee had emphasized repeatedly, the market also rebounded. HD Hyundai Heavy Industries returned to the black in 2023 with an operating profit of 178.6 billion won.
◇ No room for complacency even in a supercycle… competing on technology and talent to counter China's chase
Riding the shipbuilding supercycle, HD Hyundai Heavy Industries has seen profits surge steeply. The market also reappraised the company, with the share price jumping more than fourfold in three years.
But Lee's blackboard remains packed with tasks to solve. At the top line is the technology gap with China that has narrowed to around five years. Scooping up Chinese government subsidies and orders from Chinese-flag carriers, Chinese shipyards hold more than 60% of the global order backlog (workload). This is why, when Lee meets employees, he keeps saying, "Without question, China is the scariest."
Lee is seeking a breakthrough through differentiated engineering. It is said that he has been persuading shipowners with the logic that, while Korean ships are about 20% more expensive than Chinese ships in terms of initial construction costs alone, Korean ships are ultimately more economical when considering the entire life cycle, including fuel efficiency and durability.
He is also firming up internal foundations. After HD Hyundai Heavy Industries merged with HD Hyundai Mipo and the integrated HD Hyundai Heavy Industries launched in December last year, the expanded 11 docks were reassigned by ship type to remove low-value-added work and reorganize around high-value-added, high-difficulty vessels. In parallel, the company is cultivating high-end engineering talent at the shipyard. To enter the U.S. warship market, which will serve as a bridgehead for future defense exports, it is also pushing to build a local business foothold, including acquiring a local shipyard.
He continues to steady the organizational culture. What Lee emphasizes to executives is "leading by example." He stresses, "For riflemen to seize the hill with confidence, leaders must correctly grasp the situation and fire the artillery with a bang." He also communicates with new hires. It is to keep his pledge to "not pass down the difficulties I experienced on site."
Lee reads one management book a week. When something resonates, he delivers it directly to executives. Still, most of the answers come from the site. During the Labor Day holiday, Lee also plans to go on a business trip. The destination is an overseas innovation center of a domestic automaker cited as a case of advanced manufacturing innovation. It appears to be a trip to practice what he said: "Leaders must understand cutting-edge technology sites to present the right signposts to members."