"Innovating Management Systems to Leap into a Top-Tier Company"... The Future of POSCO as Envisioned by 'Deokjang' Jang In-hwa

POSCO Group has changed. Among global steelmakers, it is the first to introduce a biweekly four-day workweek, and it even allows employees to wear shorts and sandals, making its dress code as trendy as that of leading IT companies. Executive privileges are being reduced. After cutting down on executive assistants from ‘one executive, two secretaries,’ the exclusive parking lot for headquarters executives has been relocated farther away. Starting this year, executives are also required to return up to 20% of their salaries.

Jang In-hwa, Chairman of POSCO Holdings, emphasized, "The most important virtue as a leader is empathy," adding, "Restoring the trust and support of internal and external stakeholders is more important than anything else." (Provided by POSCO Holdings)

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POSCO’s experiment to transform its rigid and hierarchical corporate culture into a dynamic one stems from the philosophy of Chairman Jang Jin-hwa of POSCO Holdings. Recently, through the ‘7 Major Future Innovation Tasks,’ the company announced its goal to reduce costs by about 1 trillion KRW annually in the steel sector alone, a target based on a dynamic corporate culture.

Chairman Jang, a ‘steelman’ who has devoted over 30 years to POSCO, has earned the nickname ‘Deokjang (Virtuous General).’ According to Sun Tzu’s Art of War, a brave general or a wise general cannot defeat a general with virtue and prestige.

Chairman Jang often says, “The most important virtue for a leader is empathy,” which explains why he actively communicates with employees. Through communication, he identifies issues that require change at POSCO and promptly devises solutions. His commitment is also reflected in his pledge to undertake a ‘100-day on-site accompaniment’ since taking office.

He plans to reduce unnecessary paperwork (fake work) and reorganize job titles. By changing work methods such as instructions, reporting, and meetings, he intends to continuously promote cultural innovation within the group. To gain employees’ trust, he has abolished the stock compensation system and voluntarily relinquished his own privileges as a manager.

Although POSCO is a company that manufactures hardware such as steel and secondary battery materials, the power to transform it into a superlative company that enjoys trust and love from stakeholders through a super-gap business lies in instilling ‘corporate spirit’ software into its executives and employees. Chairman Jang emphasized, “I hope POSCO Group becomes a super-gap, world-class company,” adding, “Rather than competing for first or second place in the industry, I want us to become a global top-tier company with a solid position like Apple or Microsoft.”

Panoramic view of Gwangyang Steelworks. Photo by POSCO Future M

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After taking office, Chairman Jang launched the ‘POSCO Future Innovation Task Force’ to review management status, gather opinions from related departments, and finalize the 7 major future innovation tasks through multiple discussions. At the POSCO Holdings board strategy session held on the 19th, he stated, “Through the 7 major future innovation tasks, we will strengthen the competitiveness of core businesses and innovate the overall management system to create a turning point for becoming a world-class company.”

POSCO Group is innovating its governance to align with the expectations of shareholders, customers, and local communities. It has declared ‘New Ethical Management’ and plans to establish an independent ‘POSCO Clean Committee’ to raise internal ethical standards. Chairman Jang intends to continue sincere communication based on empathy with employee representative bodies and local community stakeholders. He emphasized, “Restoring trust and support from internal and external stakeholders is of utmost importance.”

POSCO Group aims to maintain its two major business structures?steel and future materials?while securing super-gap competitiveness. The steel sector is facing a triple crisis of domestic and international economic downturns, oversupply from China, and protectionism from various countries. Profitability has deteriorated since the end of last year.

POSCO Holdings recorded sales of 18.052 trillion KRW, down 6.9% year-on-year, and operating profit of 583 billion KRW, down 17.3% during the same period. Warning signs have been lit for both steel and secondary battery material businesses. However, Chairman Jang’s focus is not merely on ‘restoring the fundamental competitiveness of steel.’

To secure ‘super-gap competitive advantage,’ the strategy is to develop innovative products from the customer’s perspective and boldly pursue equipment efficiency and process optimization. The goal is to achieve annual cost reductions of over 1 trillion KRW through structural cost innovation and equipment efficiency.

For mid- to long-term growth, the transition to a low-carbon production system will be sequentially implemented by 2026. The plan includes developing electric furnace technology for producing high-grade steel and expanding hydrogen reduction steelmaking technology step-by-step to quickly launch steel products with reduced carbon emissions and capture the low-carbon product market.

Exterior view of the secondary battery material complex. Photo by POSCO Future M

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POSCO will stabilize key raw material plants for secondary battery materials such as lithium and nickel, which will enter mass production this year. POSCO Philbar Lithium Solution, a lithium hydroxide plant for secondary batteries based on ore lithium, has started commercial production, and the first phase of the Argentina salt lake lithium plant with an annual capacity of 25,000 tons will begin mass production in the second half of the year.

POSCO Group is taking advantage of the temporary slowdown in the electric vehicle market to actively invest in high-quality resources such as lithium salt lakes and mines, upgrading its business strategy. It is also starting commercialization of next-generation materials such as solid electrolytes and lithium metal anode materials.

Through structural reorganization of some businesses operated by affiliates, POSCO aims to enhance efficiency and business synergy. In the energy sector, it will support the group-wide transition to low-carbon energy. The trading and logistics businesses will strengthen supply chain competitiveness for steel and secondary battery material businesses. The construction and IT businesses will focus on reinforcing the foundation for efficient group operations. The group has also announced plans for mergers and acquisitions (M&A) of leading companies capable of generating group synergies.

A POSCO Group official said, “Even before taking office, Chairman Jang was evaluated as a leader who communicates horizontally with employees and helps them find their own responsibilities and roles when carrying out tasks,” adding, “His intention is to quickly overcome the current crisis through stability and innovation and create opportunities for a new leap forward.”

Jang In-hwa, Chairman of POSCO Holdings, emphasized, "The most important virtue as a leader is empathy," adding, "Restoring the trust and support of internal and external stakeholders is more important than anything else." (Provided by POSCO Holdings)

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