With new senior leadership in place, the Korean group is shedding its sedate image and taking risks to gain ground in the mobile industry and elsewhere.
Amongst South Korea’s top conglomerates, law-abiding, scandal-free LG has come to be regarded as a follower, particularly in relation to the country’s biggest chaebol, Samsung. Good behaviour has endowed the LG brand with trust and reliability, which served it well in the past. But as a slowdown in profit growth suggests, lacking the image of an edgy innovator is becoming a hindrance.
This is especially the case with flagship affiliate LG Electronics, which includes the group’s Mobile Communications business unit. In a highly competitive mobile industry that holds innovation as the highest virtue, LG’s mobile phone division is lagging competitors like Samsung, Apple and Huawei. It has not turned a profit since 2014. The situation has the company’s somewhat new CEO, Koo Kwang-mo, rethinking its stance. Koo inherited the top executive role in mid-2018 following the death of Koo Bon-moo. As such, he represents the next generation of LG’s senior leadership.
Koo took a decisive step in November, reshuffling LG’s C-suite by appointing Brian Kwon, head of the Mobile Communications and Home Entertainment companies, as CEO of LG Electronics. Kwon is on a mission to turn the mobile division around, and seems prepared to fight. Running ads that openly mock Samsung’s technology, for instance, marks a departure which Park Ju-Gun of CEO Score says would have been unthinkable under the old guard. In a recent interview with Korea Times, Kwon said LG will release new phones with “wow factors to woo customers.”
The Economist reports that LG Display, a supplier to Apple, is also being overhauled. In September, CEO Han Sang-beom resigned amidst mounting losses and was replaced by Jeong Ho-young, whose former executive role was Chief Operating Officer of LG Chem. This month Jeong set a bold target of shipping over 6 million OLED TV panels for 2020, double what it shipped last year. The company is also investing heavily in R&D in hopes of catching up with rival Samsung in screens for mobiles.
Yet another LG company, LG Chem, is being led by a relatively new CEO, Shin Hak-cheol. When Shin was appointed in November 2018, he was the first person from outside LG Chem to ever be appointed CEO since its founding in 1947. He was previously an executive at 3M. With a leadership style akin to that of the newest members of LG’s senior executive team, Shin is considered a risk-taker. In December LG Chem announced a joint venture with General Motors to make batteries for electric vehicles.