CHUNG JU-YUNG – MAN WHO ACCOMPLISHED MISSION IMPOSSIBLE
Chung Ju-yung was born on November 25, 1915 and grew up in the Kangwon Province, in (what is now) North Korea, when Korea was under the Japanese rule.
As a young boy, Chung dreamed of becoming a school teacher but his hopes were cut short because the restrictive environment at the time kept his farmer family stuck in poverty. Despite the setbacks, Chung was able to go to a local Confucian school whenever he found time.
Chung’s curiosity for business became apparent during his trips into town where he would sell wood. While in town he managed to read the local newspapers and the stories sparked his imagination and he soon grew tired of the poverty that he and his family had to endure.
Chung attempted twice to run away from home seeking a new life but was tracked down by his father and brought back to the farm. On the second occasion, he managed to reach Seoul and saw for himself what a major city looked like.
When 18 years old, he made it to Seoul once more and this time he joined as an employee in a rice business. He worked hard and before long became a trustworthy employee.
But when Japan invaded China in 1937 and requisitioned rice for the war effort, the Korean rice trade collapsed. At that time, Korea was under Japanese rule. Chung then started a successful auto-repair business but it was taken over by the Japanese colonial government.
The war and Japan’s occupation of Korea finally ended in 1945.
Korea was divided into two territories, with the Soviet Union having control of territories north of the 38th Parallel, in what was intended to be a temporary solution.
Chung set up a small construction business in Seoul, Hyundai Civil Works Company (Hyundai means ‘modernity’ in Korean), in the hope that the newly independent South Korea would embark on construction projects.
Chung got work from the provisional government and with the help of his English-speaking younger brother from the US Army. When the North Korean troops invaded the south in June 1950, capturing Seoul and triggering the Korean War, Chung and his brother fled to the southern port of Bhushan.
When Seoul was retaken by the UN forces in September, Chung moved back and re-established his connections with the army. After the Armistice Agreement in 1953, the reconstruction work by both the US military and South Korean government began in earnest.
Hyundai completed the Gyeongbu Expressway in 1970 – an incredible piece of road engineering, traversing the length of the mountainous country from Seoul to Bhusan – and the hydroelectric Soyang Dam in 1973.
South Korea was by then controlled by President Park Chunghee. Park steered the remarkable, state-led transformation of Korea from one of the poorest countries in the world into an industrial giant. He provided targeted state funding and harnessed the energies of entrepreneurs like Chung.
Chung launched Hyundai Motors in a seaside town in 1967, manufacturing Fords. In 1976, the company launched the Hyundai Pony, the first Korean passenger car. By 1984, Hyundai was exporting its cars to Canada and by 1986 to the US, where the new Excel range was ranked by Forbes as the ‘Tenth Best Product’ in the US for its quality and affordability.
In 1972, Chung won a contract from a Hong Kong shipping magnate to build a super tanker, despite the fact that he had not yet built a shipyard. The ship and yard were constructed simultaneously.
Chung was a famously hard worker and an exacting boss, rising at 3:00 a.m. and demanding 15-hour days from his family (Chung’s eight sons achieved high positions in the company) and from his workers. He rallied his workers by telling them that they would soon own TVS and refrigerators and maybe even a car.
Through the 1970s and 1980s, the company grew to be the world’s leading shipbuilder and a significant force in automobiles and new technologies, such as semiconductors and by the 1990s, Hyundai was one of the largest business entities in the world.
Chung was also a great philanthropist. In 1977, he founded the Asian Foundation (like Rockefeller Foundation) for medical support, social welfare, research and development and a scholarship fund. He also played a key role to normalize relations between the two Koreas.
Chung died at the age of 85 at his home in Seoul.
What lessons can we learn from Chung Ju-yung?
How do you go from being synonymous with a sub-par engineering company to becoming a Top 100 Global Brand? Chung did it.
As with any sustainable change, it began internally. In 1986, Hyundai successfully entered the US car market with its economically priced US $ 4,995 Excel. Because the price point was perfect for the thrifty consumer, sales outpaced expectations.
However, it eventually became clear that the cars were poor in quality and in need of constant repair. Hyundai’s focus on churning out inexpensive cars quickly, established the company as a cheap brand and one whose customer base began to just as quickly disappear.
Rather than bow out of the competition, Chung looked at how it could improve its product first and image second.
Take a page from Hyundai’s book on transformation and implement the following to help rejuvenate a failing brand:
1. Innovate: By introducing firstof-its-kind incentives like its 10-year/100,000-mile warranty, Hyundai was able to find creative ways to attract new customers and keep them. Sometimes innovation means finding ways to improve the customer experience.
2. Improve: Once it determined that it no longer wanted to be on the low end of the brand totem pole, the car company drastically improved the quality of its cars. It pretty much started from scratch to rebuild its brand from the inside out. And before long, it is now reaping the rewards of doing the hard work.
3. Invest: By investing heavily in its people, products and promotion, Hyundai spurred a brand evolution that has now become a case study for other brands.
Given that Hyundai’s luxury models
are now competing with the likes of Mercedes-benz, we would all do well to learn from this wellengineered comeback.
Trust workforce
Chung had an abiding faith in the intelligence and diligence of his workers, holding that Korean human resources are second to none.
Chung’s approach was reflected in the core values still held by Hyundai - diligence, frugality and love - and implemented by a management policy-based on trust.
Although Chung was a hard taskmaster, he did not hold himself aloof from his employees. A former workman himself, Chung enjoyed engaging his men in bouts of Korean-style wrestling and volleyball. He also regularly attended training sessions for new employees.
Global company
Today Hyundai is the fifth largest auto producer in the world and it continues to increase its share in the existing markets. In addition, Hyundai is attaining significant market share in emerging economies such as India, Russia and China. An automotive specialist once praised Chung in a column in the Washington Post, citing Hyundai’s success as an important lesson for world’s unproductive politicians.
He stated, “Our less-than-productive supposed leaders could learn several important lessons - Chung learned quickly from its mistakes, did not waste a crisis, wasted absolutely no time in finger-pointing and kept its vow to do better.”
As a leader, Chung instilled these positive values into Hyundai, which continue to pave the way for Hyundai’s success in the future. (Lionel Wijesiri is a retired company director with over 30 years’ experience in senior business management. Presently he is a freelance journalist and could be contacted on lawije@ gmail.com)
ALTHOUGH CHUNG WAS A HARD TASKMASTER, HE DID NOT HOLD HIMSELF ALOOF FROM HIS EMPLOYEES. A FORMER WORKMAN HIMSELF, CHUNG ENJOYED ENGAGING HIS MEN IN BOUTS OF KOREANSTYLE WRESTLING AND VOLLEYBALL
TODAY HYUNDAI IS THE FIFTH LARGEST AUTO PRODUCER IN THE WORLD AND IT CONTINUES TO INCREASE ITS SHARE IN THE EXISTING MARKETS