Tom Coyner: Mastering Business in Korea

///Tom Coyner: Mastering Business in Korea
Tom Coyner: Mastering Business in Korea2017-05-19T04:00:27+00:00

foto_whiteTom Coyner:
Mastering Business in Korea

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(Length: approx. 36 minutes)

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Full Transcript of Interview

Tom Tucker: Hi and thanks for joining us today at KoreaBusinessCentral.com. My name is Tom Tucker. I’m the host and today our topic is mastering business in Korea. Joining us is author and consultant Tom Coyner who has written a book by the very same title, ‘Mastering Business in Korea.’

Tom Coyner is President of Soft Landing Korea. He has more than 20 years of experience in Korea and Japan working in management positions for American firms. He originally came to Korea as a Peace Corps volunteer and he has an MBA in International Business from the University of Southern California. Tom, thanks for joining us for this podcast. It’s great to have you.

Tom Coyner: Well, thanks for inviting me.

Tom Tucker: You got it. What is it about Korea that has led you, or has caused you, to let it become such a big part of your life and your professional life?

Tom Coyner: I think the opportunity to work in a very vibrant, developing economy which is no longer, really, a developing nation, that is, a newly emerged developed country makes it an interesting place to do business.

When I was in Tokyo, clearly a developed economy, it had a lot of its own opportunities and challenges. But it’s, in some ways, more interesting to be in a nation that has just broken through that glass ceiling, if you will, from being a ‘wannabe’ country to being a fulfilled, developed economy.

Tom Tucker: What is it about doing business in Korea that is particularly different or unique?

Tom Coyner: I think there are a lot of things and it’s hard to sort out what is the most unique thing; but probably, the fact that a large part of the opportunities are largely concentrated in one huge metropolitan area which, of course, is Seoul, not to say that there are other important opportunities.

But, everything tends to gravitate towards Seoul which is a good thing; in some ways, while a bad thing for the nation. And the fact that since there’s such a high concentration of opportunities and customer expectations within the Seoul area, it can be very challenging for foreign companies to be able to fulfill customer’s expectations when, so often, after-sale support issues are expected to be remedied, at least as far as feet on ground is concerned, within an hour of a customer’s phone call.

So, even in Japan, you often have some disparity. If you get a phone call from Fukuoka, then they would understand. It may take a while to at least fly someone down there from Osaka or Tokyo. But in Korea, there’s a very high expectation for immediate support and service.

Tom Tucker: You touched upon this just briefly regarding western firms being successful conducting business in Korea; specifically, in the Seoul area. How tough is it for western firms, for western executives to come and do business in Seoul and what’s the key to success?

Tom Coyner: It’s actually not as difficult as it may seem on the first glance. Obviously, there’s a language and cultural different. But there’s also a huge number of Koreans who’ve lived and studied abroad who are often acting as the front people unlike, for example, Japan and some other places.

These are not simply English specialists who may not really have a good grasp about their own business. But rather, there are a lot of people who have moved into serious decision making capacities who have their MBAs and PhDs from European, American, Australian, and so on, universities.

That makes it a lot easier so that, unlike China and Japan, if you’re expected to be a long-term expatriate, you really are not actually expected to master basic Korean. Obviously, if you can, that’s a big advantage, of course. But, it’s not as much of a stumbling block as would be the case in China and Japan these days.

Tom Tucker: Okay. Well, for non-Koreans, what would be the most challenging thing for them, or the hardest thing to get used to then, when it comes to doing business in Korea?

Tom Coyner: I think the thing I got out of my book which entailed interviewing a couple dozen executives, most of them expatriate, was the understanding and appreciation of how much up-front investment of time and energy you need to cultivate personal relations.

There’s a natural tendency for western executives to come in and start to talk turkey almost immediately. And Koreans who have worked abroad kind of understand that. But at the same time, they want to build a strong personal relationship, because they want to understand the other party and decide whether or not they can trust them and, ultimately, do business with them.

Often, I heard comments of, “If I were to do things over again, I would’ve invested much more time getting to know my serious prospects and my business partners before rushing into business.”

Tom Tucker: It sounds to me as though that is kind of a similar attitude in maybe some of the other Asian countries as well; that emphasis on spending time up-front building that relationship first.

Tom Coyner: Absolutely. I think this is true in Japan, for example, because I have spent quite a bit of time there. But at the same time, I think it’s much, much more so here in Korea.

Tom Tucker: Okay. What are Korean attitudes toward non-Koreans conducting business in their country? I’m going to guess that they’re fairly open and receptive.

Tom Coyner: They’re open and receptive. Obviously, they would prefer doing business whenever possible with other Koreans. It’s a natural human tendency. But if you have a solution or a product that can offer the Korean party some competitive advantage in the Korean or international market, of course they’re willing to give you the time of day.

The question, of course, is how much are they trying just to learn good ideas to apply toward their own goods? How much are they really interested in spending money to engage your products and services? So, you always have to be a little bit careful.

You have the same problem in Japan and other Asian markets as well. But generally, the Koreans – they’re very intellectually curious. This is an incredibly competitive society, both on the business and social level, and any sort of new advantage that may be offered will be seriously considered by the other party.

Tom Tucker: If there’s one message that Koreans and the Korean business community would want to get out to the rest of the world right now, what would it be?

Tom Coyner: We’re hot. In other words, Korea is leading the OECD countries in recovery from the global recession; this is a very big, vibrant economy often overshadowed by the opportunities and glamour of China and the longstanding strength of Japan.

Obviously, right now, China is, in the macro terms, a bigger opportunity. But, the interesting thing is people make more net profits out of Korea than they do out of even China. This is the thing that it’s important for people looking at Asia to understand. China, to a large degree, is kind of like the Sirens’ song where people look at the big numbers and say, “Gee. If I can get a quarter of 1%, my corporation will be wealthy.”

Well, the thing is, how much of that money is going to be net profits? You have to be able to send something back to your home coffers, which is a totally different matter, whereas, Korea has a very strong set of laws and regulations.

It is a true functioning democracy and Korea has gotten over – most of its notorious perfectionism, so that each success of government has been pushing both the private and public sectors to become better integrated into the international community. Korea recognizes that its future depends on being internationally competitive.

And it’s no longer mercantilist to the point that it discourages a lot of people as was the case. It’s really a good place to do business.

Tom Tucker: It sounds like it. What would you say are the threats right now for the Korea, particularly for the economy and what are the opportunities ahead?

Tom Coyner: The threats, obviously, is the global recession even though Korea is doing remarkably well to a large degree, including its own domestic market. But it is very much an export-oriented economy, so if the other countries stumble in their recovery or if Chinese mercantilism discourages countries from avoiding protectionism, then Korea, as well as the rest of the world, is going to be facing a lot of problems.

The opportunities are that Korea is putting – it’s still somewhat centrally – I wouldn’t say controlled, but directed economy — in that the government is putting a lot of emphasis on things that might be considered green. There’s the Green Revolution Drive to get the economy focused more on being environmentally friendly in things such as waste management, LED technology, things that pertain to energy; conservation saving.

During the last five years, there has been a remarkable rise in awareness within the business and public communities in the need for the environment here. And this has been translated into new business opportunities.

If the listeners are involved with anything that pertains to ecological development; waste management, green technology, this is a very good place because not only is Korea having its own internally developed technologies, it’s also looking for solutions to embed into its products and it would be good to first come into this market, embed your technologies or ideas into the local market.

And then, as these companies start expanding further abroad and will be needing international partners, you would already have, in a sense, a hometown advantage, having first worked with the company domestically before it started going internationally.

And of course, there are companies already possessing global brands and they may be interested in whatever the listener may have to offer for their international business.

Tom Tucker: Alright. Well, obviously, Korea is going green like the rest of the world. That’s certainly the case. What are some of the myths or misperceptions that might exist about doing business in Korea or doing business with Koreans?

Tom Coyner: Well, I think a lot of the myths are actually perpetrated by the lawyers here, both Korean and international, along the lines that this is a very difficult and expensive place to do business.

The two most common challenges being cited as making it difficult to do business is labor inflexibility and the lack of transparency. And at the core there are hardcore realities, but they are greatly exaggerated, since once a business person has a particularly tough labor problem, of course often what they will do is call an attorney.

If the person is finding himself or herself being under regulatory scrutiny to the point that it’s becoming difficult to handle, of course, what he or she will do is call an attorney. And the attorney will basically say, “Well, look. This is going to be a very difficult process. But, since this is Korea, it will be something that’s manageable, but expensive.”

The fact is that most attorneys here, frankly speaking, while very agreeable and well-educated are commercially incompetent because they are more involved in billing hours than serving their clients.

And so, they play this long game working with government and, sometimes, other individuals where they are able to bill or excessively bill extra bodies onto an assignment and then build large amounts of hours.

On an hourly basis, the billing for a legal firm is not that outrageous. But the fact is how many hours are billed on relatively simple things that are artificially extended. It’s really outrageous.

The funny thing about it is it becomes part of the folklore because you have expatriates come into market and they find the other old hands and it’s, “Oh, yeah, yeah. Labor and flexibility; it’s something you have to watch out for. And good golly, once you get involved with it, it’s going to be horrendously expensive. Let me tell you my story.”

And then, they’ll usually end up talking about an incident. But often, they’ll focus on how much time they had to work with a law firm and how expensive it was.

Well, that becomes common knowledge and then another source of common knowledge is going to one of the chambers of commerce meetings. And guess who’s there? 15-20% of the people attending these meetings are attorneys.

So, what happens is there’s this big game that goes on and everything is worked on the caveat where you have to understand “this is Korea.”

But in fact, if you are able to manage correctly, you can find an efficient modern lawyer who cuts through a lot of the nonsense who is not mainly concerned on billing you extra hours and playing a prolonged game with government authorities rather than getting to the core of business efficiently. If you can do that, you will find that Korea is much less difficult than what is purported. But, there’s been this been this big mythology that’s been largely inflated by the legal profession here.

Tom Tucker: You know, it seems as though in many places, oftentimes, the lawyers and the legal profession get in the way of doing business. For western executives, western companies coming to Korea, this is obviously something that they’re going to have to contend with.

For those executives, for those firms that are thinking about, or for entrepreneurs, that are thinking about coming to Korea to do business, to start a business, would this be something that you would recommend or advise against?

Tom Coyner: As much as I rail against attorneys here, at the same time, to be fair about it, many of the problems created by excessive legal billings aren’t actually created by the expatriate manager who overrate their ability to manage something so when things get out of control, they cover their tails by going to the most expensive legal firms and pass off what once was a manageable situation that has festered into being a mission impossible situation.

The point I’m making is I’m not saying you should not use attorneys. In fact, I would recommend, if anything, is to preemptively use attorneys at the beginning when problems are still small and manageable.

And one of the things is – I think it’s really important to look at attorneys if you’re setting up businesses or operations when you have more than one shareholder.

Tom Tucker: Not that I want to spend too much time talking about this attorney issue, but back to the question, though. Just in terms of western executives, western entrepreneurs, western firms that are considering coming to Korea to do business, is the level and degree of difficulty of conducting business in western firms – or for western firms to conduct business in Korea – is it so high and so insurmountable that you might advise some people against it? Or do you say, “Come to Korea. Conduct your business. This is a good place for you?”

Tom Coyner: Definitely the latter. What I was trying to point out that a lot the issues or the reputation of Korea is really artificial. And if anything, it’s getting better year by year.

Tom Tucker: Okay. Well, that’s certainly good to hear. How about advice or insights for a non Korean who might be interested in seeking employment in Korea? What would you say to those people?

Tom Coyner: The thing is that there’s really no substitute by getting your feet on the ground here and getting to know people. I often get inquiries by email or even phone calls. Actually, as often as the case is, it’s not only what you know, it’s who you know and you have to go out there and meet people.

Of course, one way a lot of people have started – younger people that have come over and taught English, using that as a platform to get out to know society. If you’re the mature business individual, I think probably the best way you can do is try to conduct business in the capacity of your current job and from there, build relationships and be able to assess whether or not it’s worth your while to come here.

Tom Tucker: Okay. Good advice for sure. Shifting gears here a little bit, you described Korea in your book as a political and economic miracle. Why do you describe them that way and how is that the case?

Tom Coyner: Well, Korea gets a lot of recognition for being one of the Asian tigers and Korea continues to be an Asian tiger. In going from a colonial exploited economy to being something that was kicked into gear, as you might put it, by a dictator, Park Chung-Hee, that later moved from being a very centrally directed economy to being much more open, initially, mercantile and now truly cosmopolitan economy. A lot has been written about that and recognized by many business professionals.

At the same time, I think often Koreans are not given enough credit for being the true democrats of East Asia. I cannot think of another country or society that is literally more democratic than South Korea.

And yet, we need to keep in mind that just barely a century ago, this was a feudal kingdom and it went, again, under Japanese colonial rule into a military dictatorship and within the course of a generation, moved from military dictatorships into being the most genuine of democratic republican governments in this part of the world.

And that, in itself, is a huge, huge development and it’s something that the Koreans have a full right to be justifiably proud.

Tom Tucker: Yeah, for sure. I’m trying to touch upon so many points in our conversation. That subject alone that we just talked about could be something we could probably spend hours talking about I’m sure. And perhaps, that will be a topic for another conversation.

But, at least in this initial conversation with you, I just wanted to hit upon a bunch of high points to try to create some valuable listening for our listeners as much as we can.

Also in your book, you talk about Koreans – rather, you asked a question. Are Koreans the Irish of the orient? What do you mean by that and are they?

Tom Coyner: Well, the first time I heard that as a Peace Corps volunteer, I didn’t really take it too seriously. I just kind of brushed it off as a bunch of expatriate stereotypes. But actually, having spent quite a bit of time the last decade getting close to the Irish community abroad and having been married to a Korean for over 30 years, I can attest there is a lot of similarity as I pointed in the book.

And actually, I should point out I had a number of Irish expatriates review this list before I went to print and they agreed to what I wrote there. Sometimes, actually, the Koreans have also been called the Italians of the Orient, too.

The point being is the Koreans wear their hearts on their sleeve. They’re very open. They’re known for being and having tempers. But, the thing about their temper is they get over it real fast. They don’t hang on grudges long. They laugh easily, they cry easily, they get into fights easily, they forgive easily. They are very religious people be they Christian, or Buddhist or Confucian. They are very, very family oriented.

When I visited Ireland on a couple occasions, I was struck how similar the behaviors were. For example, in Ireland on a Sunday evening, even to this day, the extended families will often get together at a home and they’ll sit around having coffee and maybe a little bit of whisky. And then, they’ll take turns entertaining each other. This is a tradition that’s very much in place in Korea.

An interesting thing is when I’ve spoken to a number of young Irish here, they said the one thing about Korea is that they never really had culture shock. “Okay, there’s the difference of the language. But compared to other countries where I’ve lived, I haven’t got the culture shock here.”

Tom Tucker: I’ll be darned. That’s fascinating. That’s interesting. And that idea of the tight-knit family and sitting around the table together entertaining each other on a Sunday night sounds like that’s a neat thing and, perhaps, something the rest of us in other parts of the world should move back toward to because that sounds like a neat trait and a great quality.

Tom Coyner: Yeah. Well, you see oldsters and even teenagers spending this time, although the teenagers will excuse themselves later on in the evening, to go out and hang out with their peers. But, even the teenagers don’t feel availed upon that they have to be there with their family members. There’s this attitude that family comes first. It’s a very positive thing.

Tom Tucker: Yeah. You talk about also examples of what you call ‘predominant Korean thinking.’ Predominant Korean thinking. What do you mean by that and can you share an example with us?

Tom Coyner: That’s a big topic in itself. Essentially, predominant Korean thinking entails, among other things, their concern of how one feels about something as opposed to how one thinks about something.

In a sense, this is not uniquely Korean. But, I think it’s by maybe a western perspective as an exaggerated human trait. There’s this attitude called kibun, which is a little bit different than the Japanese kibun. When the Japanese say kibun, normally they are talking about food and beverages – more of a physical sensation.

In Korean kibun, it really is more of a psychologically or emotional statement about how one feels about oneself, how one feels about another person. Often, you’ll hear the terms kibun-i jowayo, kibun-i nappoyo: had a good feeling for the person or a bad feeling about something.

This goes back to the need for building the personal relationships, in part. But, Koreans will first think about how do they feel about themselves interacting with something or someone and how they feel about the other person.

Also, they’re very, very mindful about how they perceive the other person feeling about them and the situation. That can be a little bit exasperating for the western executive because he says, “Well, look. Everything is on paper. We’re making profits. I don’t see what’s the problem. Okay, Mr. Kim is a little bent out of shape about this. But hey, let’s rock and roll. This is always a bit of a lumpy road. And now, Kim is saying he doesn’t want to do business. What gives?”

And the fact is Mr. Kim’s kibun has been hurt or disturbed by something that Mr. Smith has said or done, or what has happened. At least temporarily, Mr. Kim just doesn’t want to talk to Mr. Smith.

Tom Tucker: It sounds like they are very sensing, feeling, emotionally perceptive people as a whole.

Tom Coyner: That’s right. Another example of this is the concept called Nunchi, which a wonderful skill to develop which I picked up here as a Peace Corps volunteer and I’ve used around the world.

The idea is looking into the eyes, or the windows of the soul, of the other person. The Koreans are very good at this, because they are so kibun-oriented that a good way to sense where the other person is coming from is looking into the other person’s eyes.

And so, the nunchi can be roughly translated as “eye power,” if you will. And someone who’s really adroit in assessing out a situation involving other people is considered a fast nunchi person, a nunchi bbarun saram.

And a person who is just obtuse to everything is a nunchi omnun saram; someone who is lacking in nunchi. So, it’s a good skill to develop to be able to asses out the other person regardless of which culture which is something I picked up living with Koreans in the countryside for a couple of years as a Peace Corp volunteer.

And boy, you can really see what’s going on because Koreans are really looking you in the eye, not to be direct. If anything, Koreans tend to be a little less direct than westerners. But, they are trying to figure out where you emotionally are at a given moment.

Tom Tucker: I see. And this kind of leads me into the next question and this pertains and relates to what you just talked about. If there’s one key to getting along with Koreans, what would it be?

Tom Coyner: Be open, and honest and even a bit emotional. Open the kimono about yourself as a person, even your family a bit. Koreans really distrust someone who’s only going to talk about business or doesn’t want to talk about themselves as individuals or their families.

Koreans also are very, very age concerned because this is even more Confucian of a society than China. So, they’ll want to know if you’re older or younger than them because that has a big impact on their thinking.

But, they also want to know about you. They also want to know about your family – do you have children? How are your kids doing? They won’t ask about, so much about how you and your wife are getting along. But, they will be interested in how many kids, what the educational level is of your kids, what sort of jobs are they doing if they have graduated and so on.

They want to really get to know you in the entirety of the other person and they expect you to have a similar concern. If you don’t have a similar concern, then you’re looked upon as being too cynical and exploitative, if you will.

Tom Tucker: Everything you just mentioned, I’m guessing, might be included in various ways in the Eleven Commandments that you have written about for doing business in Korea. What would be the most important commandment?

Tom Coyner: The eleventh one. The eleventh one is – actually, the first ten I actually borrowed from a friend of mine; a Korean executive – a good, dear friend of mine – which talks about how to use business cards for meets, for connections and so on and so on.

But, the eleventh commandment I borrowed from another friend; a long term expatriate. The guy has been successfully been doing business here for 40 years. And that is, as a foreigner, you do not need to follow all ten commandments.

If you are unable to follow the ten, such as most important, like you can’t just walk into a place unless you have some personal introductions. — Koreans are pretty much constrained by that. But as a foreigner, as in any other place, often the rules do not fully apply.

So, what that means — if you do your homework and you get all your ducks in a row, you can go direct to business opportunities without the formal introductions that a Korean would normally require.

Tom Tucker: So, that is the eleventh commandment, that you can take advantage of those opportunities that you see if you’re prepared and ready and got your case ready to go?

Tom Coyner: Down to the meticulous detail, you bet.

Tom Tucker: Okay. Cool; very, very interesting. We just have a couple of minutes left here. Just real quickly here on this. What would you say would be the keys to “making it” in the Korean market?

Tom Coyner: I think the key would be realizing that you can’t come in here on an opportunistic basis. You need to think on at least the medium-, if not the long-term perspective. You need to recognize that, probably, it’s going to take you a bit longer to get your first substantial sale and the worst thing that could happen is if you hit into a big opportunity right off the bat and then realize that you have not developed the customer support infrastructure to service your first truly demanding customer.

The thing about this is if you’re in Los Angeles, New York, London or wherever, if someone from Korea came in and wanted to do the minimum investment and yet wanted to sell you a substantial product and service that required post sales support, how likely is that Korean company to succeed in your market and why do you think it’s going to be different for you to come zipping in on an airplane, and think you’re going to set up a small operation and start making money?

You really have to take Korea as a serious market as you would take your home market to be. Korea is no longer a secondary, tertiary market. It is a very substantial, sophisticated market that requires substantial, and sophisticated input and preparation to be here.

Tom Tucker: Well, it sounds like great advice and a great point. Indeed, that certainly makes sense to me and I’m sure it does as well for any other business person who has any amount of savvy at all. Anything you want to say quickly in closing?

Tom Coyner: The funny thing is, often, when I talk to someone who is not geographically savvy who might say, “I’m from Korea.” And they say, “Well, where are you from? North Korea or South Korea?” And I point out it’s South Korea.

But, it does belie a problem is that South Korea is often hampered by the newspapers reporting what’s coming out of Pyongyang, North Korea. Obviously, they’re two very separate, different countries and year by year, they’re becoming more and more different.

People often are concerned about the political risk of outbreak of hostilities. I’d rate that slightly above zero.

And so, I guess the one point is please don’t confuse North Korea with South Korea even if they have similar names.

Tom Tucker: It sounds like another great point, indeed. Tom, I’d love to be able to chat with you much longer. Again, we covered lots of different points that we could’ve spent a lot more time talking about each of those and, perhaps, we can talk more in conversations later on down the road and it’s been a real pleasure. I really thank you for joining us for this podcast interview.

His name is Tom Coyner. His book is Mastering Business in Korea and it’s available on Amazon.com and Seoul Selection. Tom, thanks for joining us today.

Tom Coyner: Thank you for inviting me.

Tom Tucker: You got it. Again, my name is Tom Tucker. Our site is KoreaBusinessCentral.com. Thanks for listening and be sure to join us and visit us regularly as we provide more information, content and contacts for you. Thanks for listening. Have a great day.