Dubai: The transformation of LG as a global consumer brand has been fine-tuned by its head office in South Korea, with the actual delivery of strategies carried out by its overseas bases.
Having reached the levels it set out to achieve, the South Korean powerhouse is now turning its attention to the next logical thing — fully empowering the regional offices.
At the core of what is being attempted is being able to position LG as a global company — not just a Korean company with an international presence.
Where LG is concerned, there's a lot at stake as nearly 70 per cent of its current workforce of about 84,000 is working outside the domestic market.
At the same time a strategy is being rolled out to identify talent at its overseas operations, to be nurtured across the company's many management hierarchies. Leading the transition is a very hands-on Peter Stickler, the LG Electronics chief HR officer, who joined the company mid-2009.
Moreover, Stickler said: "In the last eight years or so, most of the growth has been outside of Korea.
"The globalisation effort has as one of its key strategies the notion of localisation," he said.
"If LG is going to remain successful, then it needs to become the company of the country it's in. That is, in the Middle East, we have to be a Middle Eastern company.
"For that, we need to have leaders who understand the culture, the markets and the people from that country."
To achieve all that LG has in the works, Stickler is pushing for an adroit mix of getting some things done regionally while some processes would be highly centralised and handled through the head office.
The first part of the initiative has seen LG just commission a "learning centre" in Jebel Ali Free Zone, built at a cost of $15 million (Dh55.05 million) and which can train between 3,000 and 5,000 people a year. In time, LG has said there will be eight or nine such centres across the company's global network.
"When you have a lot of people working outside of Korea as we do, regional learning centres are what the company needed," Stickler said. "They will be the focal point to meet the development needs of people as well as a place to learn and deliver learning solutions."
Eight or nine LG staffers from the region have also been chosen to be part of its global leadership pool. That's at the regional level.
Where the centralisation element kicks in is through a completely revamped performance management process, the HR chief said.
"Earlier there was a centralised version in Korea, but followed to varying degrees around the world with each [overseas] organisation having its own unique aspects," he said.
"Last year we applied a completely new performance management process that was web-based and helped us deliver something that was usable in every part of the world we are in. We never had that capability before.
"Performance management is probably one of the most important tools any company has because it identifies the goals to achieve a strategy. It's an organised way of measuring how people have done in achieving those goals."
Also going through a makeover is the company's internal compensation and rewards programme, which would now be raised to be on a par with what's there in the rest of the marketplace, Stickler said.
"We are two thirds of the way in developing the value-based system, and the primary reason is we wanted to be competitive from a global standpoint," Stickler added.
All of the changes would be accompanied by incremental growth in the work force numbers. Stickler, for one, said he did not buy the time-honoured management precept that lean times required a leaner organisation.
"The overall pie is increasing in virtually all of our five businesses," Stickler said.
- LG Electronics recorded 2009 global revenues of $43.4 billion.
- The Middle East and Africa operations, launched in 1988, currently employ more than 1,900 people through 14 subsidiaries. Altogether, they cover 78 markets.