Two Years of the Koo Kwang-mo Era... LG's 'Digital, Practical, and Focused Selection' Innovation Becomes Clearer

LG Chairman Koo Kwang-mo's 2nd Anniversary on the 29th
Management Keywords: Digital Innovation, Pragmatism, Focused Selection
Quiet but Powerful Innovation Driving Structural Reform

[Asia Economy Reporter Changhwan Lee] "From the outside, it may seem quiet, but LG is innovating rapidly."

A senior executive of an LG affiliate made this remark when asked about the company's changes during the two years since Koo Kwang-mo took over LG's management.

Koo will mark his second anniversary leading LG on the 29th. Both inside and outside the company agree that LG has shown a significantly different face compared to the past during the two years under Koo's leadership.

Koo's management keywords can be summarized as digital innovation, pragmatism, and selection and concentration.

Among these, Koo has shown great interest in digital innovation, such as digital transformation (DX) and artificial intelligence (AI), which are expected to sustain LG Group in the future.

His two official visits to LG Science Park in Magok over the past two years also demonstrate his interest in digital innovation. LG Science Park is the R&D hub leading LG Group's DX, AI, big data, and other digital innovations.

Led by LG Science Park, LG Group is accelerating its digital transformation by converting over 90% of IT systems across all affiliates to the cloud by 2023, adopting work-support robots and software standards, among other initiatives. It is also applying the latest AI technologies to support solving challenging issues for affiliates where traditional methods struggled to produce results.

Koo stated, "Doing nothing and not daring to take on challenges can be seen as 'failure,'" urging, "Please create a bold culture of challenge unique to Science Park."

At the beginning of the year, Koo replaced the traditional New Year's address with a digital video for the first time in LG Group's history, and later held a video conference with affiliate presidents at the end of April to discuss finding new opportunities amid the COVID-19 crisis. These actions are also seen as leading by example in digital innovation.

Since his inauguration, the spread of a pragmatic culture is notable, including simplifying group-level meetings and gatherings and improving reporting and meeting cultures. Upon taking office, he did not hold an inauguration ceremony and requested to be called the CEO of the holding company LG Corp. instead of chairman.

Even after two years, his official title remains CEO rather than chairman. A business insider commented, "This reflects Koo's personality, who dislikes formalities and pursues practicality."

The 'selection and concentration' strategy, which involves decisively nurturing businesses to grow and boldly trimming those to be cut, is also a hallmark of Koo's leadership. This shows his intention to focus on the future by prioritizing long-term growth foundations as the holding company CEO rather than short-term results.

LG Chem's electric vehicle battery business, a representative future growth business of the group, ranked first globally in the first quarter of this year, surpassing China's CATL and Japan's Panasonic. Bold investments were made, including establishing the 'Ultium Cells' joint venture with GM with each investing 1 trillion won.

LG Display is investing a total of 20 trillion won exclusively in large OLED (organic light-emitting diode) panels. LG Electronics acquired Austrian automotive lighting company ZKW and took over management rights of RoboStar, a specialist in industrial robots.

Non-core businesses were boldly restructured. LG Electronics liquidated its fuel cell business and sold its water treatment business, and plans to relocate the TV production line at its Gumi plant to Indonesia. LG Chem sold its LCD polarizer business, and LG Uplus exited the electronic payment business.

Thanks to these bold structural changes, the performance of major affiliates such as LG Chem and LG Electronics is improving this year, and the holding company LG is also expected to see significantly improved results compared to last year. The securities industry forecasts LG's operating profit this year to surge about 67% year-on-year to around 1.7 trillion won.

The business community expects Koo to reveal a more full-fledged management style going forward. Given the highly uncertain management environment due to COVID-19, it is analyzed that he will pursue more aggressive management.

Recently, LG Chem gaining the upper hand in the international battery lawsuit against SK Innovation and LG Electronics winning several global lawsuits regarding patent infringement are also interpreted as reflecting Koo's proactive management style.

This content was produced with the assistance of AI translation services.