For our 100th Episode, Alex Jensen is joined by Peter Underwood and Penelope Richey Kim from IRC Consulting.
The conversation begins with Peter and Penelope introducing their connection with Korea. Despite both growing up in Korea, Peter is a confirmed Yeonhui-dong Seoul Saram while Penelope grew up in Gongju, Chungcheongnam-do. Both have left Korea without expectation of developing careers on the peninsula but returned to find their callings and themselves.
Both now work at IRC Consulting, Peter as Founder and Managing Partner and Penelope as Executive Consultant. IRC Consulting’s mission is founded on the truism that Korea is unique, and to succeed in business here, international businesspeople need to fully appreciate those differences.
How IRC Consulting Can Help
As Peter says, “I’ve lived in Korea for more than 50-years, and I’m still learning new things. I’m learning how to work with Koreans, how to meld their ambitions with the desires of international organizations and the objectives and hopes of Korean organizations. I am still learning how to bring all of these people together so that they can create value. I have seen talented people and powerful organizations crash and burn here because they were unable to reconcile their needs with the desires and capabilities of their Korean stakeholders.”
Korea’s rising global profile brings new opportunities for foreign businesses that are built upon the fundamental strengths of the Korean economy.
As Penelope says, “Korea has a great location, as a peninsula, it has tremendous potential as a hub to reach so much of Asia. World-class infrastructure, not just logistics and transportation, but digitally, it’s got such a highly educated workforce. And the work culture here is such a culture of diligence and efficiency. Deeper than that though, Korea has this unique characteristic of momentum, once Korea is committed to something, the speed of movement, the rapidity with which it can develop in a direction is unbeatable. It really has so many characteristics that an international organization would look for as a base of operations.”
Given all of the changes mentioned above, it is surprising that many of the challenges that overseas organizations face coming into Korea have not really changed over the years. All market entrants have assumptions on how a business should operate, how deals should be done, stakeholders managed, and results reviewed. In most instances new market entrants have to relearn these when entering the Korean market.
The way that Korean companies and governments budget, plan and manage is unique. On an individual level, meeting with a Korean partner involves a different skill sets and assumptions. Does my plan help my Korean partner’s individual career goal? What will his peers think of him working with me? These questions are often as important as whether the deal makes objective sense as will be mutually profitable.
Peter and Penelope have spent a lifetime learning how to create mutual value in Korea. Even as Korea moves faster and faster along the path to a fully-digitalized economy, the basic human connection skills they offer will continue to underpin all business encounters.
Thanks to the KBLA Community
This episode is our 100th. We would like to thank all of our sponsors, The Four Seasons Hotel Seoul, The Innovation Center Denmark Seoul Office and Eastpoint Partners . We would also like to thank those companies that have been with KBLA since the beginning and are key to our survival and growth: Lee & Ko, Edge Communications, Insight Communications Consultants, Shin & Kim, InterCultural Communications, and Orang&Orang
D-2 Korean Presidential Election: Merger, Major Pledges & Record Early Voting
Alex Jenson 0:08
You’re listening to koreabizcast with the KBLA. I’m your host, Alex Jensen, and it’s Monday, April 11, which is a really special day for our podcast for those who’ve been with us over the last few months, or perhaps just found us recently. And for our sponsors whose support has been so valuable, I’m talking the Four Seasons Hotel Seoul, East Point partners and Innovation Center Denmark Seoul in chronological order. And the reason it’s so special is that this is our 100th episode. As I mentioned last Friday, we’re doing special two parts with IRC Consulting Managing Partner, Peter Underwood. And do check out his amazing background story if you haven’t already, by checking out episode 99. Today, we’ll get a summarized reminder of that for those who missed Friday, while focusing more on the story of IRC consulting, which helps international organizations identify and capitalize on opportunities in Korea, among its series of services. We will also seek Peter’s professional insights alongside those of IRC’s executive consultant, Penelope Kim, with us. And thank you both for connecting.
Peter Underwood 1:15
Pleasure to be here.
Penelope Kim 1:16
Alex Jenson 1:18
You’ve both got such rich backgrounds, and we can’t cover it all in great detail right now. But can you both kind of give us a short version if that’s possible? Peter, perhaps we can start with you as a voice that’s known here in Korea, a face that’s known, your words have been read many times in various different publications. The Underwood legend goes far back multiple generations. But here you are with IRC as a managing partner. If you were to chart the course, in in a couple of minutes for us, how would you do that?
Peter Underwood 1:53
Well, I mean, I grew up in Korea, and this is very much my home. I’m a Seoul Saram as they say. And, you know, I kind of drifted through through life through university and trying to figure out what I wanted to do with my life. And I kind of fell into consulting, I recognized that I had, I had unique skills that is an understanding of Korea and the language and understanding of the two different cultures. And and I thought there would be a role for me to be between people from different culture, business people from different cultures and, and Korean business people. And somebody tapped me on the shoulder one day and said, you know what that’s called, it’s called consulting. So I went about it, got my MBA and first joined IRC in 1988. As an employee, I became a partner in 1993. And then in 2018, spun off the consulting part of a larger organization into its its own entity. So that’s kind of how I got here from from the beginning. Thanks.
Alex Jenson 3:00
Well, I’m looking forward to getting back to the IRC story in a moment. Penelope over to you though, based on a cursory look at LinkedIn, you seem to have a background on the legal side of things, but also the State Department, the US State Department, which I was kind of interested in. How have you made your way into IRC?
Penelope Kim 3:20
Well, you know, my history with Korea goes back quite a bit, as well in my own lifetime. I stopped trying to leave Korea a long time ago because first I moved here in 1982. My dad was an English professor and moved our family here. I’m not a Seoul Saram. I’m a Gongju Saram. I’m a Chungcheongnamdo native, I suppose. So I spent several years there going to Korean schools in Gongju. Left Korea never thinking I would revisit it. But it did ignite in me this interest in international things International. So after law school, I went into the State Department and I actually worked on North Korea nuclear issues, which are still ongoing. So I don’t know maybe I didn’t do a very good job there. But after almost a decade there, my husband and I, he had an opportunity for a job here. So we moved here in 2004. And I of course had the linguistic ability built on that basic foundation from when I was younger, and it was initially a two year contract, but we haven’t left. So then I joined a Korean law firm, Yulchon. They were kind enough to offer me an opportunity. And I think all of this kind of added up to a random bag of skills, you know, with the Korean ability, the negotiations and international flavor of things as well as the business perspective from law and practice, that maybe Peter saw, and invited me to join IRC. And so I actually haven’t been there very long. I was happy to join last October. So that’s me in a nutshell.
Alex Jenson 5:19
Well, it’s great to have that background as well. And you both clearly bring such a wealth of Korea knowledge as well as a richness of experience that must have been of benefit to just about any corporation. Consulting though it’s something that I know a handful of expats here who’ve been here for a long time have inevitably found their way into this. Why do you think that is? Peter? What is it about having been in Korea for a long time that then helps other people businesses, let’s say when they want to come into Korea, it kind of sounds obvious, but not everybody’s doing it?
Peter Underwood 5:54
Well, there is a truism. Korea is different and, and I think many international business people don’t really fully appreciate that. They’ve done business in Peru and in Cambodia, and in Europe and whatnot. And so of course, I can do business in Korea, but in fact, Korea in many ways, is very different. So if you spend some time doing business in Korea, you start to, and I mean, start to because even after all my life, I’m still learning new things. You start to learn how they work and and how to meld the ambitions, the desires of international organizations with the objectives in hopes Korean organizations bring them together so that they can, you know, create value, that that is a skill that is marketable. I have seen many people crash and burn in that effort as well. It’s not automatic that just because you’ve spent time doing business in Korea, you’re necessarily going to succeed. But many people who have been here a while and experienced business still go into consulting, and many of them do very well.
Alex Jenson 7:05
And just staying with you for a moment, Peter, because you’ve seen the history from back in the 80s to now with IRC, it must, in its own way tell the story of Korea’s development through the financial crisis and more financial crises, but also the growth in global interest in Korea, the fact that in the 80s, you were able to do this successfully? Well, you must think now, there’s just so much more to work with.
Peter Underwood 7:31
Certainly the environment has changed, changed a lot. I remember prior to the Asian financial crisis that a foreign company wanting to establish themselves in Korea basically had to find the relevant ministry and bag and and submit an application and the application was maybe 50 or 100 pages long with a business plan, etc, etc. So really, it was it was it was an effort to get into the Korean market. The industries that were or the targets at that time were the heavy industry, shipbuilding, machinery, construction, automotive, and so forth. And, and companies wanted to come in to tap the workforce to to establish a manufacturing operation or whatever. The the there been a number of milestones in Korea’s development. I think that the 1980s, late 80s, the the Olympics, that made a big difference that Korea started to be more international that they attracted the outside world and the outside world started to take interest in them. So that was when one watershed and then I mentioned earlier, the financial crisis, suddenly Korea needed foreign investment. And, and so the attitude changed very, very dramatically. So the the the appreciation for foreign companies and foreign investment changed in about the late 90s. And the industries in which foreign companies were interested in participating also changed as Korea became less attractive as a manufacturing base and more attractive as a market, types of companies that were looking at Korea, and what they were trying to do in Korea also what progressed or diversified over over that period of time. So the world of the 1980s is certainly very, very different from the from the world of today here in Korea.
Alex Jenson 9:34
And even though you’ve not seen it all through the lens of IRC consulting Penelope, you too must have noticed these particularly dramatic changes and even if it’s Korea overall that’s kept pulling you in. It must feel like a very different country that keeps you engaged now to the one that seemed to keep luring you before.
Penelope Kim 9:53
Definitely, um, you know, a huge difference is simply that you don’t have to explain what Korea is or where it is anymore to people abroad, which was not the case when I first came here as a kid, or when I moved back even which was subsequent, you know, around the 1988 Olympics, so people should have probably by then heard of it, there was more of a reaction of, Oh, I know about Korea, my uncle fought in the war there. Now, you hardly have to share that. And in fact, I get a lot of old friends contacting me through various social media networks to talk about their children coming over for business opportunities, work opportunities. It’s amazing. The change changed perspective overseas on Korea.
Alex Jenson 10:50
And in terms of what you can offer now, the Korean market doesn’t need nearly as much selling but would you say actually, Penelope, that if people aren’t in Korea obviously this kind of depends what sector they’re in but for many multinationals if then if they’re ignoring Korea completely, that they’re possibly missing a particular boat?
Penelope Kim 11:13
Definitely, you know, we talk about this a lot in time internal discussion at IRC. First of all, Korea is in a great location, it is a peninsula, it is a potential hub to reach so much of Asia, it’s got a great infrastructure for just logistics, transportation, but digitally, it’s got such a highly educated workforce. And the work culture here is such a culture of diligence and efficiency. I’d say that Korea has this unique characteristic of momentum. Once Korea is committed to something, the speed of movement, the rapidity with which it can develop in a direction is unbeatable. So you know, it’s really a great place to be. It’s got its it is a great market. It has a lot of characteristics that one would be looking for as an international organization just for our base of operations for another branch. And it’s funny how it can be overlooked sometimes.
Peter Underwood 12:25
Yeah, I think Penelope has made some very good points there. But it’s also interesting how, although Korea is the 10th, or 11th largest economy in the world, many companies, their eyes just slide right over, they’re not even aware about Korea. I mean, the location, the infrastructure, the workforce, the market, all of these are fantastic. And yet, many times we hear companies looking at Malaysia or, or, you know, other countries in Asia, before they look at Korea, and it’s very interesting how Korea still remains a bit underneath the radar, until there is a major news event that suddenly brings it into into focus. Unfortunately, a lot of those news events are not very positive. In the old days, it was riots and so on. Now, it’s in North Korea, every time they make a noise. But fortunately, there’s some positive instances where Korea gets into the news. The Olympics was already mentioned the World Cup, now Kpop, and so forth. So there are a lot of positive news hits that draws the attention. But frankly, many companies are missing the boat by not considering Korea. And that’s very, very frustrating, as Korea focused business development consultants here.
Alex Jenson 13:41
I mentioned at the start the various different services that IRC consulting offers, where do you see the biggest level of demand right now, and this could be for both of you, or either or whoever prefers to take it on, especially some of the issues that companies trying to enter Korea face as well if we could use this opportunity to address those.
Peter Underwood 14:01
Well, interestingly the the challenges that foreign organizations have faced in Korea are largely unchanged. There the environment is a lot more friendly to foreign investment in the industry, focus is considerably different, but the biggest challenge is that many international organizations international business people are steeped in their assumptions, I guess we all are, we have our assumptions of how things operate and how they should be. And very often they come we all do we come to the a problem to a business to whatever with these assumptions until we often don’t even know we are making those assumptions and and and helping organizations to overcome those assumptions or work around them continues to be a key part of our business. Another one is processes the way that Korean Companies, Korean government and so forth operates are in many cases, fundamentally different in terms of planning, budgeting implementation. There are different processes that are not aligned with international organizations. So we have to help help international organizations to learn how you need to approach your objectives and goals in Korea. And also, expectations are different. We Westerners think term in terms of revenue, profit, that kind of success, but individual Korean business people have a whole host of other concerns and issues. If you’re an employee and organization, you know, what, how is this going to have an impact on my advancement? How are my peers going to react to this? What does it mean in terms of my own personal career going forward? And it’s not simply a question of what’s the most profitable or what’s the most expedient way forward? So I think that these things haven’t changed. There have been changes in in the gross, the macro environment within Korea. There is certainly changes in the in the industries that are, are appealing to international organizations. But I think these three things that I mentioned that assumptions, processes and expectations, there’s still this major discord between what Westerners think about when they come to Korea, and the way things happen in this country. Penelope probably has a different insight on it. Thank you.
Penelope Kim 16:32
Yeah, I have to say that the most common thread I’ve seen has to do with that assumptions piece. You know, many times we have inquiries, very enthusiastic business, places of business that have you had success in their, whether it’s their own home markets or in other international markets, they are excited and interested. And they know exactly what they want to come into Korea and do. And it’s really hard to let them know that they shouldn’t underestimate the distinctiveness of how things are accomplished here in many cases. And a lot of times there, there’s a very well meaning intention of saying, Well, you know, we understand, we have these understandings Korea is a more collective society, and it’s more hierarchical. But those assumptions have that you think you know what that means? It’s not how it actually plays out in Korea. And so a lot of times, in in all kinds of different sectors and all kinds of different inquiries. We’re in the position of saying, you’re, you’re you’re talking to us, because you don’t know what you don’t know. And we’re in a strange intermediary position where we do know what you don’t know. So let us first help you investigate how to do, what you want to do in Korea, like back it up half a step, you know, like, I want to come in, and I want to sell X, Y, and Z. And I want to find a partner to do this and that. And we say, well, okay, we need to actually find out if that’s the way even it works to distribute your product in Korea at all. Just little things, your product might not be deployed in the same way in everyday life here. But distributor relationships might be different. There are loyalties. That relationship piece is very important. So I’m trying to talk an enthusiastic inquiry back and say, I’m sure there’s a way you can accomplish your objectives here. But first, we need to do some investigatory work on your behalf before you jump right in. That’s probably a challenge for IRC. And I think it’s it’s an equal challenge for the, you know, business coming in to be able to hear that and understand that they don’t know what they don’t know.
Alex Jenson 19:09
The speaking of what, you know, clearly both of you have this human expertise on offer but there’s also the market and industry surveys, the data that you gather, do you feel a pressure or perhaps are you already doing this to incorporate so much of the big data technology that’s now out there the AI that could help steer consulting into a new direction?
Peter Underwood 19:32
That’s a scary question. I have some concern that AI will put us out of business. I’ve heard some crazy stories. I think we need to focus on where we can add the greatest value. And and I think our value is exactly the human interaction. Our forte is to go and interact with people in a particular industrial sector that can give you the insights on where the what direction the the that sector is going in the future. I think data of any kind is good about telling you where you’ve come from, it’s not necessarily good at telling where you’re going to. I have heard some stories where it actually does very well, and making predictions. But when it’s in a very, very micro level, we’re a company that provides these products or services. How should we approach the market? Who, you know, what’s the distribution channels? Who are the key customers and so forth? And what’s what’s the, what’s the economy going to be looking for tomorrow? Those kinds of insights really come from talking with and interacting with people that are in that in that particular industry sector. So maybe AI will put us out of business? I hope not. But we focus very much on on the human interaction, the human insight side of the business, more than the data and you know, the facts and the figures in the statistics.
Alex Jenson 21:05
And this may be gives me an opportunity to finish with both of you on a question of where you see us heading here in Korea, in 2022. And beyond. And this is very broad, but are there any particular trends that you’d like to offer some insight on, perhaps it could be, for example, to do with the presidential transition that we’re about to go into that may shape the next five years, or it could be a bigger picture where, for instance, Korea has been harnessing certain industries like bio hubs and that sort of thing, and that could shape a new direction for the economy. We’ve heard so much in recent years about new growth engines, and I don’t know how much is rhetoric and how much is reality.
Peter Underwood 21:44
Looking at it a little bit, from a little bit different perspective, I think the biggest change that I’ve seen from the past is that that Korea is no longer receptive to every opportunity that comes along, they’ve been very, very, they’re very picky now. Korea has come to the level where in many industries, they are at the cutting edge. And so you foreign business person, brings an opportunity to a Korean company, and the Korean company says, Sorry, we are already doing something better, or we’re already ahead of that game, or, or we’re going in a different direction. So I think that the foreign business people don’t necessarily bring the latest technology or the best things to the party. And that’s a big change. If I look at the where the industry is going, yeah, you hear about the hubs and the, and the, you know, the growth engines and so forth. And, and I’m a little bit cynical. I think a lot of that is, is political jargon and, you know, trying to try to get votes or whatever you want to call it. I think that the growth engines are largely going to find themselves I mean, the Hallyu, even though it did have support from the government, it was largely something that was spontaneous and generated itself outside of the of the public sector. And therefore, I think that, that when the government tries to guide the economy, that they’re not necessarily going to take it in the right direction. But if you look at Korea today, compared to the past, I mean, not too long ago, if you told somebody that Samsung was going to be bigger than Sony, you would have been laughed off this world. If you said, told people that Hyundai cars were going to be you know, JD Power is going to rate them up in the top of the of the of the automotive sector that you would people would have thought you were joking. So Korea does cross that threshold from being a fast follower into into a mover first mover in many, many industries. And I think you’re gonna see that I don’t think it’s going to be guided by the industry. I mean, for example, EV batteries, the Korean industry and companies are now global leaders in EV batteries. And that wasn’t dictated by some government plan. It came out of their own development ideas and objectives and strategy. So I think it’s very hard to predict where Korea will be in the coming years. But I think you run the risk of being surprised if you think they’re not going to be able to succeed. A friend of mine said a number of years ago, he said, those people who bet against Korea over the last several decades, all lost their money. Don’t bet against Korea, this country is going is continually moving forward and progressing. And I think whatever direction it goes, I think Korea is now a a force to be reckoned with in the global economy.
Penelope Kim 24:42
I think that I would agree that the world has a lot to learn from Korea. And there’s a state they’ve they’ve reached, where partnership with Korean businesses and industries, there’s a lot to be learned. And I wouldn’t underestimate the role South Korea has really gained with kind of as an influencing country visa vie Southeast Asia. A lot of those countries look to Korea and its economy and Korean businesses for partnership opportunities. So there is kind of a foothold in gaining a foothold over there. Perhaps a partnership with South Korea is the way to go forward. It’s taken a different status now on the world stage. You know, there are other Asian markets that have played various roles. I’d say that for various reasons, some have faded into less prominence, but Korea is largely it’s stable, it’s democratic. It’s got a growing economy. And it has that in with so many countries in Asia, again, I returned to don’t overlook Korea. It really is a player and a place to do business.
Alex Jenson 26:10
Thank you, both of you for sharing your enthusiasm. And thank you, both of you for joining us on this 100th episode. It’s been an absolute pleasure.
Penelope Kim 26:20
So wonderful. Congratulations.
Peter Underwood 26:23
Congratulations on the 100th episode. I’m sure there’ll be many more in the future. Thank you for this very valuable insights that you bring too many business people across the world about Korea. Thanks very much.
Alex Jenson 26:35
Well, look, I’ve got to show some gratitude again to the sponsors who’ve made this all possible over the last few months. The Four Seasons Hotel Seoul, Eastpoint Partners and Innovation Center Denmark Seoul. We continue to receive their support and it’s so much appreciated. If anyone else wants to get on board in that way, or with ideas or any other types of suggestions. Just send us an email email@example.com. Find us through LinkedIn search KBLA and see you for episode 101.