Korea Inc.'s year-end 'executive shuffle'

The firing of Hyundai Motor America CEO Dave Zuchowski -- coming as it does only a few days before Christmas -- is poorly timed and reinforces the image in the U.S. that Hyundai burns through American CEOs at an alarming rate. But placed in the Korean company’s cultural context, it is not that unusual.

When I was running global PR for Hyundai Motor at corporate headquarters in Seoul (2010-2013), I discovered one charming end-of-year tradition: Each team would go around to their bosses’ offices, shake hands and wish them a happy new year. There was a sense of optimism and a looking forward to the next business year.

Then there was another year-end tradition, common to all big Korean companies, or chaebol, that could have a darker side: the “executive shuffle.”

Companies such as Samsung, Hyundai Motor and LG like to have broadly experienced executives, with a wide knowledge of company operations. The end of the year was the time for job reassignments, or executive shuffling, and even though the process was an expected part of life at Hyundai, and other chaebol, the shuffle could often come with surprises.

An executive at headquarters might find out, for example, that he is being “shuffled” to Moscow, or Frankfurt, or Sao Paulo. Usually, this was for a promotion, so that part was good. But the executive may not have known about the plan until he was informed of it. And the transfer was expected to happen nearly immediately -- often within a week.

This would send families of Western executives into an uproar. Though it did not make life easy for Korean families, they were conditioned to expect it.

If an executive was being shuffled from Hyundai headquarters in Seoul to the Seoul headquarters of an affiliate company, the change could happen the same day. I left a present for one of my bosses on his desk one morning in December and I never found out if he got it -- at lunchtime, he was promoted to a top job at an affiliate company and was already gone.

Then there were the executives who were shuffled off elsewhere. Some underperforming ones would be transferred to smaller affiliates. If they did well there, they could rejoin Hyundai Motor headquarters in the future, like a big leaguer sent down to the minors to fix his swing, with the hope of making it back to "The Show."

'He is happy'

Other underperforming ones, however, were sacked, which is the same in corporations everywhere. Though in the Confucian culture of Korea, it was referred to obliquely. Colleagues would say only that a fired executive “went home.” Usually it would be added, “he is happy,” meaning he got a severance.

In the U.S. and the West, we are used to long-serving CEOs. But this is not the case in Korea. Only the family owners of the great chaebols remain in top jobs for long periods. Non-family COOs or presidents, even successful ones, rarely hold top jobs for more than four or five years.

This is partly due to the reshuffling, but also to the way in which the chaebol hire and promote their people. The chaebol typically hire college graduates (women, right out of college; men, after their nearly-year-compulsory military service) at entry-level.

There, they labor for four years. If they perform well, they are promoted to the next level, where they stay for four years (there are exceptions of those promoted sooner), and so on, spending 20 years in working-level jobs until they have the chance to be promoted to the executive ranks. Then, there are several levels, and years, until they reach a top job.