1. How do you develop talent in a country where
age determines status and people don’t naturally
push themselves forward? Standard Chartered
Bank decided to ‘Koreanise’ its approach
International
BY CATHERINE MONTHIENVICHIENCHAI
CLIMBING THE
LADDER
KOREA

2. W
hen you bear mind its long history of invasion – whether
by China, Japan or its near neighbour to the north – you
can understand why South Korea sees cultural identity as
such a sensitive issue. More recently, it’s had a major influx
of western financiers, not least when foreign private-equity
firms took advantage of the Asian crisis of 1997-98. Many
ailing Korean financial institutions were snapped up at
discount prices and then sold for huge profits.
One such speculator was Newbridge Capital, which made almost four times
its initial investment in Korea First Bank (KFB) when it sold it to Standard
Chartered Bank (SCB) for $3.3 billion (£1.7 bn) at the beginning of 2005.
Once the largest bank in Korea, KFB was one of the hardest hit by the Asian
financial crisis. And with 5,000 employees, it was significantly bigger than its
western acquirer – which, despite having had a presence in Korea since the
late 1800s, was only 280 strong prior to the takeover.
As the second foreign bank to take over a Korean financial institution,
SCB was determined to avoid the integration difficulties faced by the first
– Citibank. Its acquisition of KorAm Bank in 2004 was most notable for an
18-day strike, the longest ever walkout in the country’s banking industry. So
SCB was intent on banishing mistrust and bridging cultural differences.
Jonathan Cormack, head of change management and internal communications
at the newly merged KFB/SCB, says one of the earliest
challenges was to win the “hearts and minds of the staff”
and unite the two organisations behind the shared vision of
becoming “a leader in Korea’s financial services”.
“Leadership and winning are important in Korea,”
Cormack says. “We have many long-serving colleagues
who remember when KFB was the country’s biggest bank.
Restoring the organisation to what they see as its rightful
place is, for them, a matter of honour.”
It is for the same reason that SCB decided to retain the word
“First” in its branding – renaming the company Standard
Chartered First Bank (SC First Bank). The new vision was
communicated via large maps that described the history
of the two banks, the marketplace they now operated in
and their strategy to win. Staff were put into groups and
❛❛
People always
say: ‘You
can’t do that
in Korea.’ So
one of the
challenges
is how far to
stretch things
❜❜
Building bridges: SCB had to work
hard to unite the two organisations
GETTY

3. encouraged to question and debate to get
an understanding of the direction the bank
had to take to become “First” again. Efforts
to help employees feel part of the wider SCB
group included workshops on the SCB values
using fun, participative exercises.
Cormack says the feedback from these
sessions was highly positive – something of
a relief considering how alien such activities
were to a Korean workforce. “People always
say: ‘You can’t do that in Korea.’ So one of the
challenges is how far to stretch things. If you
don’t stretch things at all then nothing will
change, but if you stretch things too far or
too fast you’ll leave people behind,” he says.
In a country with some of the worst
industrial relations in the world, getting staff
on side is tough. Korea’s labour unions are well
organised and well funded, and large-scale
strike action is commonplace. They also have
rather unusual methods of communication.
Full-time union officials will think nothing
of disrupting top-team meetings by standing
outside the room, chanting and banging
drums. Their aim is to intimidate, made all
the more resonant by having a dress code
– with flak jackets and red bandanas.
Since the acquisition, SC First Bank has
managed to avoid industrial action – a
remarkable achievement for any financial
organisation in Korea, let alone one that has
just passed into the hands of a foreign owner.
“We approached the union early on,” explains
David Thomas, executive vice-president and
International
32 8 FEBRUARY 2007 WWW.PEOPLEMANAGEMENT.CO.UK
Power in numbers: large-scale action is
common in Korea, where unions are very
well organised and members dress the part
HR RELATIONSHIP MANAGERS
To support the various initiatives being rolled out across Standard
Chartered First Bank, HR needed to embrace change just as much
as the rest of the organisation, which meant relinquishing its almost
infamous status as the “control function” of the bank.
“Nothing happened without HR saying so,” explains David Thomas,
executive vice-president and head of HR and trust. “Decisions about
things such as resourcing and promotions weren’t made without the
department. People actually feared HR.”
Instead, HR professionals at the newly merged organisation were
asked to adopt the HR relationship manager (RM) model in operation
across the SCB group. Similar to business partnering, this involves HR
working in an advisory role with the business. “The concept of actually
going up to a business head and asking them: ‘What can we do to help?’
was pretty alien. It was like another language to them,” Thomas says.
Rani Krishnankutty, head of relationship management and
performance, says the first thing they did was to review the existing
team, ensuring they had individuals not only with the necessary
“strengths” for the new role, but also who were happy to take on the
challenge. In some cases this meant moving people out of HR into
other parts of the business. The next stage was to educate the team
so they understood the new HR products and how to communicate
them to the business.
“This wasn’t easy,” Krishnankutty says. “For example, the bank had
never had performance management before, so HR had to really buy
into it themselves first before they could persuade the business.”
It was also a challenge for the new HR RMs to work in partnership
with the business, particularly as many of the managers they advised
were older or more senior than themselves.
Deok Koo Kang is senior HR RM for the consumer banking
business. He concedes that he had “some difficulty” playing a
consultant role – advising and challenging the business and providing
the right HR solution. However, he says he was given plenty of
support to help him make the transition from his previous role as
head of HR operations, which was mainly administrative. “Rani has
been by my side in developing my persuasive skills,” Kang says.
It is still early days but so far feedback has been good, and Kang
believes there is now greater trust between HR and the business. “In
the past HR used to give orders to staff,” he says, “but now there is
two-way communication with employees and managers – HR and
the business jointly arrive at solutions.”
head of HR and trust, “and told them we
wanted to have a very different relationship
to the one that most unions and management
had in Korean financial institutions.”
The company also reassured the union that
there would be no enforced job reductions
and talked at length about how it planned to
develop the business and its people. Thomas
admits there were times when they didn’t
see eye to eye, but that a big element of their
success came down to cultural awareness.
“Korea is very relationship-based,” he
explains. “You can’t just walk into a meeting
and expect things to happen if you have no
relationship with the person. So I’ve spent a
lot of time with the union socially, getting to
understand their perspective.”
This included going on hiking trips and
taking union officials to overseas SCB
offices, in places such as Hong Kong and
REUTERS/GETTY

4. WWW.PEOPLEMANAGEMENT.CO.UK 8 FEBRUARY 2007 33
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Singapore, to show them how the company
operated. “We now have a very productive
relationship and are seen as a model by
employer organisations in Korea, as well as
labour union federations,” says Thomas.
The company has also managed to convince
the union – which originally wanted to get
rid of all foreign management – that foreign
executives, who make up about 35-40 per
cent of senior management, are necessary
because they have particular experience and
strengths that will help to take the bank to the
next level. Thomas says this has been aided
by a commitment to developing local talent,
which has included sending 58 Korean staff
overseas on secondments, as well as another
300 overseas for shorter training schemes.
Meanwhile, 1,200 employees have signed up to
a bank-sponsored programme to learn English.
Leadership development has also been a
strong theme: the company has run a series
of high-performance leadership workshops
at top-team level and launched a “branch
manager academy” to ensure talent is
developed at lower levels. Underpinning this
is a wider move towards a performance-based
culture, where talent development is key.
“We wanted to get more Koreans into
the most senior roles and ensure there was
appropriate distribution in terms of age and
sex. Implicit in achieving this was a culture
based on performance and potential, rather
than time served,” Cormack explains.
❛❛
Korea is very
relationship-
based. You
can’t just
walk into a
meeting and
expect things
to happen
❜❜
had an impact on efforts to promote talent,
because Korean employees don’t naturally
push themselves forward as individuals. So
Thomas says the company has had to have
basic conversations with people about how
they’d like to develop and what it means to
be a talented employee. This is not about
imposing a western model of talent on
people, but a blend of the two. “We have an
SCB group approach to developing talent,”
Thomas says, “but we’ve ‘Koreanised’ it.”
High-potential employees have been
given accelerated development, including
performance coaching courses, career
development workshops and, for some,
overseas secondments. The ultimate aim is
to fast-track them through the organisation.
However, promoting people based on
performance isn’t easy in a country where
age is the prime determinant of social status
and even dictates how you speak to someone
– there are four different ways to say hello
depending on your relative position.
So, when a 32-year-old man was recently
made a branch manager, the youngest
person to take such a position in Korea, it
made newspaper headlines. It also posed an
enormous dilemma for the manager’s staff.
“As he was the boss, he had a senior status,”
Cormack explains, “but as his elders, his staff
should have had higher status. In the end, they
decided to adopt a formal form of address
with each other – unprecedented across the
bank and probably most of Korean society.”
Thomas says such situations will become
more common. “We have 347 branch
managers but only 13 are female. The company
we acquired was very male-dominated, so
what we’ve done is focus on young, high-
potential male and female employees and
look at how to accelerate them,” he says.
This is already giving SC First Bank a
competitive advantage. “People from other
banks – particularly local ones – now want
to come and join us. We’ve also found
that we’re able to attract Koreans living or
studying overseas,” Thomas says.
“We’re seen as unique in Korea,” he adds,
“because we’re officially recognised as a local
bank, but we’re foreign owned; we’re seen
as culturally sensitive, plus global. So we’re
enjoying the best of both worlds.”
And with results for the first half of 2006
surpassing expectations, it looks like SC First
Bank is well on course to achieve its vision
of becoming a leader in Korea’s financial
services once again. 
Such a shift has been a huge challenge for
an organisation that in its 77-year history has
never had a system for giving performance-
related feedback, while promotions have
traditionally been based on seniority alone.
There have been other cultural barriers
to deal with too – in particular the type of
relationship that exists between manager
and subordinate. Described as “Eu-Ree”, an
employee is expected to show absolute loyalty
to their manager, along with unquestioning
obedience. Similarly, the manager must be
equally loyal to staff, looking out for their
well-being. Critical to such a relationship is
the maintenance of harmony, which makes the
concept of giving honest feedback difficult.
“We know that in a culture where
harmony is valued that it’s going to be a
challenge for managers, but we have given
them a lot of support in terms of coaching
and training,” Cormack says.
A further difficulty has been the fact that
Koreans tend to define their success not in
terms of their own contribution, but in terms
of the contribution of their team. This has