Last year was the year of a severe economic slump. The financial crisis triggered from America's subprime mortgage situation has spread to the object economy and the whole world caught a serious case of economic recession. Nobody was free from the international economic crisis and fundamental skepticism about the economic system itself. The global economic flow seems to have entered into an ice age, not a cold wave any more. And most economic experts keep saying that Korea will have negative growth this year, in 2009.
Management Philosophy in the Off Season
This year, every corporation will compete much more fiercely for their survival and development. Therefore, it seems to be clear that we will watch a huge war this year, where every company jumps to strengthen their core competencies and make new business models. For example, the main businesses of KDC Corporation are Network Integration (NI) and System Integration (SI). Those will be expected to become more risky in the business environment due to shrinking investment and the games of chicken between the same kinds of companies. We already had huge difficulties on the national scale as well as the corporate scale; many people predict that an extreme reduction-oriented economy will continue for a long time.
However, this kind of uncertainty can sometimes be used as a good opportunity for business. The author of the international bestseller Risk, Peter L. Bernstein, emphasized this by saying: “Taking a risk is the real catalyst that leads modern Western society.” Usually when people hear the word “uncertainty”, they have some tendency to regard to challenge of the uncertainty itself as reckless and bad.
However, for business people it is a good chance to win more profits than ever since there are few people who can see the hidden possibilities behind the uncertainty. This writer entered KDC Group as an open invitation employee in 1990. After building a career in the business, secretarial, and business planning field, this writer became the CEO of KDC Corp. Starting from an employee, this writer couldbecome the CEO because he always chose the challenging path each time he confronted the crossroads between uncertainty and possibility. This choice has made him more successful than others.
In the economic crisis under the IMF system, this writer had to start in the leasing business of network telecommunication equipment. Many people worried about the new business because it seemed to be inappropriate in Korea to them. However, this writer had the firm belief about the success of the new business and chose the challenge. Ten years have passed after that hard decision, now it has become our main revenue business. The business or enterprise which is made with a lot of one's focus and passion can fail. However, if we can understand the essence and degree of the crisis and set the right strategy, we can find enough hidden opportunities. To seize those opportunities we have to create a climate to take the risk of failure.
Then, what should the enterprise do to cope with the economic recession Solutions from the economic experts in the media are dull and unrealistic. One of the solutions is that recession is the best time for M&A. They say that people can buy rival companies at a cheap price and climb industry rankings because stock prices have crashed so much. However, who would have the money to do an M&A in this hard time In a recession, companies should reinforce their inherent core competencies and play games with sales. In addition, companies should advance into new business areas related to their main existing business. They should also prepare for the future to make their own corporation be more prosperous after they overcome the slump.
Promoting the Main Business
The year of 2009 started with a cold wave in the economy. The management strategy of KDC to conquer the crisis in the recession is to enforce our external competitiveness of our main promoting businesses, the NI and SI divisions. In addition, we will focus all of our ability on our new strategic businesses - 3D imaging, IPTV equipment, and green energy-related businesses.
Sales is the only activity which raises revenue directly among all the corporate activities. Because of this feature, in the recession, enterprises traditionally arrange their sales experts to their main promotional businesses and use their sales manpower to its fullest potential to manage their company.
Then, what is the main promotion business which has made KDC what it is today Since the foundation in 1972, the NI and SI businesses have always been included in KDC, every successful and critical time. Therefore, this writer regards this recession as an opportunity to intensify the sales competency for the NI and SI businesses and make us more competitive. Along those lines, at the end of last year, KDC Corporation enlarged and rearranged the sales organization responsible for the NI and SI businesses. In addition, we newly established sales organizations which can deal with the demand of the media telecommunications field. We restructured our enterprise and improved the constitution of our group.
Furthermore, KDC Corp is ceaselessly promoting 3D images, IPTV equipment, and green energy related businesses as our new strategic business. Even though we are in a recession, the company should keep investing in the future business. If a company doesn't invest during a recession, they cannot have a bright future after the recession finishes. Each time we got out of the recession tunnel, we saw a lot of examples of new companies which had risen up to be strong companies. To catch that kind of opportunity, KDC is promoting our three new and strategic businesses continuously.
From this year, every aspect of our business will become stronger. Especially, the 3D image-related business is expected to be our main growth business this year. Last year, in 2008, the 3D musical documentary Hannah Montana & Miley Cyrus: Best of Both Worlds Concert achieved great success in America. And the first 3D film with combined with liveaction shots, Journey to the Center of the Earth, was released. In addition, the Disney animation Bolt was released in 3D and was well-received by many audiences. So, the year of 2008 was the year that we could confirm the possibilities of 3D films. The appearance of powerful 3D film content makes 3D screening equipment spread internationally. From this year, the domestic 3D screening equipment market, which has been in a rut, is expected to pick up.
On January 8th, at CES 2009 in Las Vegas, the world's leading consumer electronics manufacturers showed many TV technologies enabling 3D video playback. The 3D video business is becoming the essential keyword of the next generation display field. KDC has developed 3D video related technology and other related businesses for a few years now. At the end of January, KDC had a successful demonstration of 3D broadcasting. Now, KDC is pursuing a sales contract with famous Japanese home appliance manufacturers for 3D LCDs for mobile phones. Also, KDC is expected to attract huge investment from a local corporation in the US. The potential of the 3D image industry market is explosively increasing these days. When the economic crisis is over, KDC will be the most noted company in the 3D image market with the best technology in the world.
Last but not least, we should consider one very important question. Companies are confronting a lot of limits to their business plans these days. To overcome this season, one should have an attitude like an athlete. Athletes move back to the basics when the game is hard. When we think about the basics of being CEO, we usually ask ourselves questions like “What is our business”, “Who are our customers”, “What is our customer's value”, “What will happen to our business”, and “What should our company do” The answers to those questions are the basics of management for CEOs. CEOs should analyze their core abilities and never hesitate to challenge themselves. In addition, CEOs have to always be prepared and go in the direction that the company wants to achieve. Then, the CEO's company will become a new leader in the future.