"A Desirable Change of a Company" Part 2. To Win in the Race towards Creating a ‘Super Divide’ - AMORE STORIES - ENGLISH
#Exciting Changes Column
2019.05.09
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"A Desirable Change of a Company" Part 2. To Win in the Race towards Creating a ‘Super Divide’



Racing for 'super divide', impossible to survive or grow without groundbreaking change

  Dawn on Friday, December 13, 1907. The sailing vessel Thomas W. Lawson sunk in the waters off the shore of the UK. Only the captain and one crewman survived. It was a fast sailing ship of 22 knots newly-built against the steamship. The source of the misfortune was building the ship with a long hull and seven masts to increase its speed. This led to weakening the ship's steerability and the ship was destroyed in the strong winds while being anchored. Since this accident, there were no schooners sailing the waters in the history of marine transportation. Steamships lived the same destiny when diesel-powered vessels started to be built. Thomas W. Lawson is one of the many cases of being forced out of the market due to not keeping up with the changes.

 Companies must continuously and quickly change in order to grow and survive. If a company is at a similar level to others, it will be in a muddy fight; if it is slightly better, others will soon catch up. To survive, a company must be on a totally different level than others and completely overwhelm them. 'Super divide' means that there is a significant gap between the No. 1 in the industry and the rest. This can only be achieved if the technology the company possesses is more than two generations ahead or its cultural capacity is powerful. Now, companies must target for a change that can bring about a 'super divide'. Achieving a super divide is challenging, but there is joy in the process and the results are definite.

 Nowadays, achieving super divide through technology is the main trend. Apple opened an era of smartphones, while AlphaGo outran humans in the game of Go. Machines replaced physical labor in the past, and technology will take over the mind in the future. Culture, once considered to be intrinsic to geniuses, artisans and artists, is no longer an exception. Like photography replaced painting and plastics made earthenware antiques, 'super divide' technology is replacing or converging with culture, opening up a new window of opportunity.


Race for 'super divide' with technology and culture

 Competition among companies comes down to 'performance against cost' or 'cost-effectiveness'. Here, 'performance' means the objective and subjective utility recognized by a customer. Customers, of course, choose the product with higher cost-effectiveness. If a product has outstanding 'performance' and is rare, it becomes more desirable when the price is higher. Cost-effectiveness is what determines a company's sales and profits. The performance must be outstanding for the sales to increase, which makes securing margin easier. A company must achieve 'super divide' in order to catch both the sales and margin based on utility.

 From the first industrial revolution to the third, technology improved physical performance against cost. The three industrial revolutions were sparked by the development of machines, electricity, and electronics and information. In electronic devices, semiconductors that are small, cheap and easy to mass produce replaced the vacuum tube. Semiconductors evolved into transistors and integrated circuits (IC) into very-large-scale integration (VLSI). The level of integration increased, while cost of production dropped. The level of integration in a semiconductor memory increased 10,000 times over the past 20 years, while price jumped 10 times. Companies that achieved the super divide are those that secure technology that is two generations ahead and launch the next generation product when competitors catch up. Apple and Dyson created a sensation with outstanding performance against cost in smartphones and vacuum.
 Since the fourth industrial revolution, more advanced and intelligent technologies are increasing the 'emotional' performance against cost because AI, robots and sensors are applied to the areas of culture. Cultural heritage is something that you master after long training and discipline of something that is passed on in history. It was difficult for latecomers to overcome the barrier and enter the stronghold created by premium products of a handful of powerful companies. But the fourth industrial revolution made it possible to customize and produce cultural products of a high cost efficiency. Latecomers can also launch the so-called premium products by securing technology that creates a super divide – just analyze and replicate the thoughts and movements of geniuses, master artisans and artists. Earthenware made by past masters were unique and original. In the future, they may be designed by an AI and produced with a 3D printer as a limited edition to be sold at a high price. This is why companies in the culture industry must pay attention to 'super divide' technology.
  • Race for 'super divide' with technology and culture



Dyson, breaking down stereotypes in home appliances with cyclone technology

 The British company Dyson created a sensation in the household appliances industry that was already in its 'maturity' stage. In only a few decades, the company eliminated noise from the vacuum dust bag, fan blades, and hair dryers. Other companies were run out of the market by rejecting innovation or released imitated products. Founder James Dyson graduated from Royal College of Art. He was not always first in class but enjoyed making things with his hands and was relentless. His awesome inventions include a flat-hulled landing craft and the 'ballbarrow'.

 It all began from finding a problem while using a vacuum cleaner at home. When the hole to the dust bag got clogged, suction power weakened, and it needed to be replaced. It was strange to him that other people overlooked this flaw for so long. His solution: cyclone technology. It was already used in devices that filter solid particles using centrifugal force. James Dyson released the product 4 years later, but business normalized after another 4 years. And he completed the technology that is used now in another 6 years.

 When he recognizes a problem, he creates a design and makes a prototype. He went back to the drawing board, tried and tried and only stopped when he was fully satisfied with the result, overcoming numerous failures such as failure of development, betrayal by business partners, interference from competitors, and money issues. There were so many reasons to give up, but he held out. The end result was outstanding in performance and the design was simple and beautiful. Customers went wild over Dyson products, willing to spend money and recommended them to others. Any other person would not have tried to think differently and not have been able to endure the challenges because of fear.

 New recruits of Dyson assemble vacuum cleaners on their first day at work. They take the completed vacuums home and try them. It is company policy to encourage employees to experience making and using machines. They even have to pay for the vacuums as there is no such thing as a 'free lunch'. James Dyson wants to see the word Dyson used as a verb, as in 'Dyson it'. He criticizes brand PR or product marketing with no innovation saying that it deceives customers. Dyson completely transformed the way we clean our homes with cyclone technology. And it changed the cultural behavior of consumers, solidifying the company standing as a premium brand.


Emphasis on technology that continued from Mirae Corporation to Koh Young Technology

 Former CEO of Mirae Corporation Jeong Munsul founded the startup at an older age in his early 40s. After his first failure, he learned there is no such thing as 'building a business by chance' and that 'you must change yourself'. Jeong invested a lot of money again and developed a wafer inspection equipment, but its performance was less than expected. He even thought about killing himself due to the enormous amount of debt. His pastor's words that 'God gives us trials to make us stronger' did not comfort him. He applied his technology in a lower-grade test handler to tide over the crisis.

 CEO Jeong devised a strategy to secure demand and profits with advanced technology. He hired people with good skills and supported them to conduct research without any constraint. One employee who graduated a technical high school somewhere in the provinces took a look at a machine in an exhibit and drew up a blueprint. The company lab purchased expensive equipment without restraint from other departments. When CEO Jeong retired and an executive in Finance was appointed as new leader, this corporate culture died. The new CEO focused on research with high return, which killed the company heritage of developing groundbreaking products.

 CEO of Koh Young Technology, Koh Kwangill, was the head of the research lab at Mirae. When he worked at a large company, he experienced the humiliation of a Japanese competitor releasing a better, advanced product every time his company would release a new product. And when his department was restructured during the Asian Financial Crisis, Dr. Koh took a job at Mirae. Then-CEO Jeong arranged for a lab and delegated full authority. When the succeeding CEO started to overstep, Dr. Koh decided to start his own business. CEO Koh says he learned the basics of management from CEO Jeong. Koh Young Technology is known as the dream job in the industry that allows flexible work hours and working out at work.

 Koh Young Technology is the indisputable number one company in the world in 3D electronic components inspection equipment. 3D inspection is 10 times harder than 2D. It requires a technology that is two generations ahead, the first of its kind in the world. The company also recently developed a brain surgery-assisting robot with Harvard Medical School. They combined the robot with sensors to enhance the degree of precision. Koh Young Technology also focuses on AI, a future industry driver, managing three research hubs in Korea and overseas. A robot that assists in brain surgery is a key case where technology replaced dexterity or 'craftsmanship'. There might come a time when robots replace highly-skilled doctors.


Continuing the experience of success in achieving 'super divide' through Air Cushion and Global Headquarters

 Does Amorepacific overwhelm its competitors through 'super divide' technology? Does it apply technology to cultural areas? Is it transforming itself from the very roots of the company in line with the fourth industrial revolution? Amorepacific experienced success in achieving a super divide with its competitors through Air Cushion and the Global Headquarters. Air cushion changed the behavior of applying makeup and the Global Headquarters demonstrated elegant beauty through architecture. These are the results of long dedicated efforts, difficult for other companies to follow. However, if change stops, 'super divide' becomes just a simple 'gap' and that 'gap' becomes nothing.

 No one raised a question about the way we apply makeup for the past 100 years. That is, before Amorepacific R&D Center found another solution – dipping puff on the foundation captured in air sponge. The hint was in the date stamp used to validate parking. The company created prototypes, monitored customer response and changed its content and applicator. It took 1,000 hours of brainstorming, changing the ingredient ratio 200 times, and 3,600 mechanical tests.

 IOPE Air Cushion was launched in March 2008 and it created a sensation. By improving the product's functionality and diversifying the brand, the product sold more than 1trillion Korean won in annual sales. Retinol and oriental medicine products were technologies one generation ahead of others. But Air Cushion is a case that brought a 'super divide' by changing the behavior of applying makeup. Only a 'super divide' product can break through a stagnant market and cultural barrier. Now the company must learn from its Air Cushion success and create a second or third success story. We wish to see the word IOPE used as a verb like Dyson. IOPE is pronounced similarly to 'I hope'.

 Architecture these days is too technology-centric, high and packed. Amorepacific Global Headquarters building holds culture; it is low, and it holds the beauty of space. Architect David Chipperfield said, "The cube-shaped exterior was inspired by the moon jar, and the inner court was designed based on the appeal of the Hanok yard." The building could have been more than 30 stories high but was built as a humble 22-storey building. The openness of the lobby, the emptiness of the 3 walls, and the 5-storey inner court enable people-to-people communication and union with nature. There is also a museum in the basement, demonstrating the company's pride as a cultural company.
 The Global headquarters building is a unique, original and beautiful space. It is also another 'super divide' example of culture that others cannot follow. They say people make space and space makes people. The Global headquarters is built, but is it changing the people inside? The Global headquarters building must become a platform for the creation of 'super divide' products. It takes design, prototype manufacturing and customer experience to converge together in real-time at the Global Headquarters. It could be a good idea to allow members to learn from the history of Air Cushion and make and use the product. There could also be a space for people to experience other 'super divide' products like Apple's iPhone, Dyson's vacuum, and surgery-assisting robot.

 Korea, in the past, produced and exported dolls. Buyers complained that the finish of the product was poor. That was because the female workers of factories never played with dolls before. In other words, we had a poor culture. You can obtain technology by learning with intelligence and using machines. It is much harder to overcome the gap in culture because it requires a deep understanding of humanities and arts, and apprentice training. Amorepacific's technology ranks among that of other global brands, but slightly lags behind in culture. It must lead the convergence of technology and culture by riding the trend of the fourth industrial revolution. It must continue its 'super divide' success gained from Air Cushion and the Global Headquarters building.

 There is a Zen poetry Baekbeom Kim Gu, a leader of the Korean independence movement, loved. 'It is easy to climb a branch of a tree. What is challenging is letting your hands go from holding on the edge of a cliff.' One must learn how to jump off a cliff in an era of racing towards the 'super divide'. It is scary but one can only climb a cliff by being courageous. Teamwork and climbing gear might guarantee safety, but someone has to risk his or her life alone to explore the path unknown. If fear stops you from moving from that one spot, night will come and the cold will kill everyone.




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