The following is a personal letter to SCB Group CEO, Peter Sands, from Jon Lee, a management consultant, for resolving current disputes at SC First Bank in Korea. ― Ed.
Dear Mr. Sands,
This letter is written in the hope that it can help resolve the current stalemate situation in Korea ― which is detrimental to everyone involved the longer it drags on.
I write to you directly as you hold the key to resolving the current deadlock situation in Korea. You hold the key because the SC First Bank management reports to you and SC First Bank is a significant investment for SCB Group overall. And I write to you directly because you need to have an insight to the current situation in Korea in order to resolve the situation for the benefit of everyone involved.
I will be as brief as I can, as there is limit to how much I can communicate through a newspaper column. First, I will describe what SC First Bank needs to be. Then, I will describe current barriers and how to remove them. Be warned that some of what I say will be counterintuitive and different from what you are being advised. But I assure you that my suggestions will lead to not only resolving the current deadlock but to building SC First Bank to be the leading bank in Korea.
What does SC First Bank need to be?
Two things: (1) SC First Bank must be much more external customer focused. This means having the right people systems that are aligned to delivering superior customer value rather than rewarding individual employees. A quick example is to reward employees based on how much value they deliver to the customers rather than how much profit they generated for the company. (2) SC First Bank desperately needs better teamwork. Not big bonuses to individual superstars … not internal competition … not complexities and bureaucracies. Better teamwork means sharing of common vision and mission and alignment of principles among all players ― which will lead to building trust and the ability to focus on delivering external excellence rather than fighting internally.
What are current barriers and how to remove them?
So, how does SC First Bank become external customer focused delivering true performance through internal teamwork? It is certainly not through the individual performance pay system used throughout SCB internationally. In this respect, the SC First Bank labor union is right in resisting the implementation of a pay system that promotes individual performance (rather than external customer service through teamwork). Companies in Korea should not focus too much on things like cash, incentive, promotion, and self interest ― which destroy Korean virtues such as relationships, friendship, loyalty, and teamwork. The key is to strike a balance between individual and team performances that can bring out Korean workers’ unmatched passion toward organizational success.
So, what to do: (1) SC First Bank must find and nurture the right leaders who can lead the organization in the right way. The leaders must think about the success of the organization rather than their own individual job, performance or success. (2) Fundamental HR systems including its pay system must change so that SC First Bank becomes more focused on internal team building and external customers. The CEO and HR urgently need to put in systems that drive this change. Of course, this will take some time and lots of effort. But SC First Bank does not have a choice if it wants to become the leading bank in Korea.
By Jon Lee
Jon Lee advises organizations on M&A, intercultural integration, and people/HR practices. He served as a senior advisor to Standard Chartered Bank during the initial acquisition and integration stages of SC First Bank. He can be reached at ChangeAdvisors@gmail.com ― Ed.