Insiders and outsiders are set to clash over the next KT CEO post. Among the three final CEO candidates, Joo Hyung-chul, former head of SK Communications, is an outsider who has never worked at KT. Park Yoon-young, former head of KT's corporations division (president), and Hong Won-pyo, former vice chairman of SK shieldus, are from KT. However, it has been 5 years since Park left KT and 18 years for Hong.
◇ Hard to grasp 14,000 employees and 83 subsidiaries in a short time
As of the first half of this year, KT ranks 13th among conglomerates, with more than 14,000 employees. It has 83 subsidiaries subject to consolidation. Its annual revenue exceeds 26 trillion won. A senior official who is from KT said, "For an outsider, no matter how fast, it takes at least a year and a half to get a handle on a complex KT, and at least two and a half years if you include group affiliates."
Bringing in outside talent can be positive in terms of expertise and energizing the organization. But given KT's current situation, analysts say insiders have advantages over outsiders. That is because quickly resolving the hacking incident, rebuilding the organizational culture, and securing new growth engines are urgent.
Bang Hyo-chang, policy committee chair at the Citizens' Coalition for Economic Justice, said, "Outsiders are needed when internal innovation stalls and becomes corrupt, but what KT needs now is someone with the capacity to penetrate down to the lower levels of the organization."
Kim Young-shub, the current KT CEO who was an outsider, also inspired expectations at the time of appointment that his experience as CEO of LG CNS would drive KT's future growth. But the faltering response to the hacking incident laid bare a lack of internal communication. The project KT agreed to in June to invest 2.3 trillion won over five years with Microsoft (MS) in the United States also sparked concerns over Data Sovereignty violations and controversy over unfair transactions. The interpretation was that there was a lack of understanding of KT's role as a national communications network.
◇ Avoid parachute appointments… "There is precedent for hiring 25% of executives anew"
The reason voices inside and outside KT argue that CEO candidates dogged by parachute-appointment controversy should be excluded is that the side effects can be significant when an outsider is appointed CEO. A person from KT said, "Since privatization, KT CEOs recruited from outside were former Chairman Hwang Chang-gyu, former Chairman Lee Suk-chae, and President Kim Young-shub," adding, "Except for former Chairman Hwang, the internal assessment is that they brought in a large number of parachute hires."
Former CEO Koo Hyun-mo, declaring he would not take part in this CEO open recruitment, said, "Those who do not know KT's history, culture, and the role and responsibility of a key telecommunications carrier should refrain from participating (in the CEO recruitment)," adding, "Over the past three years, executives who did not fully understand KT's business joined the management, and in the short span of two years, more than a quarter of all executives were hired from outside."
Hwang Yong-sik, a business professor at Sejong University, said, "If a figure mired in parachute-appointment controversy, not an insider, becomes the chief, time and assets will be wasted as appointments made to repay a political debt."
◇ AI transition cannot be delayed… "Need to speed up B2B growth"
In telecommunications, the B2C (transactions between corporations and consumers) business is constrained by a limited domestic market. Even though the government abolished the Mobile Device Distribution Improvement Act in Jul., no major change is being felt on the ground. That is why all carriers are focusing on B2B (transactions between corporations) businesses such as artificial intelligence (AI), cloud, and data centers.
According to the plan KT released last month to enhance corporate value, the company aims to expand the AICT (AI+ICT) share, which accounts for 7% of total sales in 2024, to 19% by 2028. It plans to identify business opportunities in areas such as upgrading public-sector IT and to cultivate next-generation markets through AI adoption in the financial sector.
Among the three KT CEO candidates, Park, the former president, and Hong, the former vice chairman, are cited as having B2B business experience. Baek Ki-bok, an emeritus professor at Kookmin University, said, "(The next KT CEO) must be able to secure new growth drivers by shifting from a B2C-centered, stagnant business structure to B2B."