KT, the giant telecommunication service provider, is gradually escaping from its stale image as a public corporation. After CEO Lee Suk-chae took office in January 2009, the company conducted a smooth merger process with Korea Telecom Freetel (KTF) and presented a new corporate culture of ethical and transparent management. It is now taking the lead in innovation based on its Olleh management.
Lee was appointed to head the company when it was in a mess following the arrest for bribery of the leadership of KT and KTF. Lee’s appointment came as a rescue measure and his leadership of propulsion and determination led the company to recover from a serious crises.
Immediately following his appointment, Lee announced an emergency management policy based on the three principles of ownership, innovation, and efficiency, and suggested innovation tasks to practice. After only six days there was a merger with KTF to transform the company into a global leader in wire and wireless telecommunication convergence. The announcement came as a bombshell to competitors, while negative prospects prevailed internally.
The three month long merger process was not an easy task. Analysts predicted the merger should cost 1.7 trillion won and the industry’s opposition and stock market’s dark forecast posed a threat in terms of policy. However, Lee led a successful merger based on thorough advance preparation, persistent persuasion of shareholders and investors, and the buy-back of treasury shares, which resulted in a merger cost of 298 billion won, one sixth of the original estimation. Lee’s mission statement for transparent and ethical management shattered its sterile corporate image as a breeding ground of corruption.
In July, the prosecution discovered 128 previous and current KT executives and employees bribed by affiliates. It was the result of the company’s internal audit and voluntary prosecution coming from Lee’s efforts, including the appointment of Vice President Jeong Sung-bok, a former public prosecutor, as head of the Ethical Management Division.
KT has been renowned for its highbrow attitude toward affiliates. In fact, affiliate SMEs, including contents providers, have complained about this. Lee emphasized that there would be no development without mutual cooperation with affiliates and declared an escape from the closed KT-led style of businesses. KT’s recent improvement with minimum price bidding, as well as financial, advisory, and educational support to affiliated SMEs have been led by Lee.
KT’s integral hit is the Olleh management. The word “Olleh” is hello written backwards and means to provide services based on innovative and reverse ways of thinking. Also coming from a Jejudo Island dialect meaning a small lane, Olleh aims at communicative management and depicts an exclamation of cheers to touch customers. This plays a great role in KT’s external promotion as children are also aware of the popular Olleh advertisements. As already shown by the merger with KTF, Lee is focusing on wire and wireless convergence.
The consecutive launches of products combining Show, the mobile communication, and Qook, the wired service, are the result. Most recently, the company presented ‘Qook & Show’, a wired and wireless combination service, which enables users to use mobile and Internet telephone through one mobile phone. This is expected to reduce monthly voice communication costs by 34.8%.
The gravest concern for KT is the turnaround from the still slow growth. It aims to explore new businesses while promoting convergence based on strong wire and wireless infrastructure. Lee’s strategies also include more active overseas exploration in new markets such as Mongolia and Indonesia, and becoming a genuine global company. It remains to be seen how Lee will transform KT into a global company based on his long experience as a government official with propulsive power.