Balance between Freedom and Arrogance

SK Telecom is “Free”-

In the morning, one can witness its free environment at the “T-tower” of SK Telecom in Seoul. No one wears a suit or a tie. As many people go to work in jeans, you may raise a question on whether such individuals are going to work or going to hang out. Even the president and executives wear casual clothes if there is no official event outside the company. Rather, visitors wearing a suit feel awkward.

Three times a week, morning events such as a comic dance and a character show encourage the morale of employees. The “Early Bird” program offers free breakfast to employees who come to work early to do their job or to learn foreign languages.

However, the freedom given to the employees is not free from the profits of the company. This is a “managed freedom” to achieve “Super Excellent•SUPEX,” the goal of SK Telecom.

However, it used to be a traditional Korean company where employees had to obey their boss.

“The code of conduct says employees should report when they come and go on business trips including a long-term stay, a one-day business trip, or even a trip of just a few hours to the downtown area. There are some people who slip away by the time they leave work. Reporting before you leave work is mandatory.” (This comes from an internal company magazine issued in June 1997).

In September of the same year, 1997, an internal survey on the form of communications within the company found that 63.8 percent of employees thought the company was “vertical,” while only 14.9 percent thought “horizontal” and 12.8 percent reported “in-between.”

By contrast, in a similar survey conducted last year, employees gave 84 out of a possible 100 points to items like “our team makes quick decisions” and “our team offers enough room for team members to maneuver.”

What brought changes to the organizational culture of SK Telecom over the past 10 years?

An executive said, “Critical was the intense competition in the mobile industry since 1997 when three PCS phone service providers began their businesses.” As the workload increased and the number of experienced and new workers rose, integration became important. And as a result, a flexible organizational culture was created.

Forty-six percent of the 4,400 employees are experienced. When they hire new employees, they recruit more experienced workers (53 percent) than new ones (47 percent). A managerial level employee said, “I came from other field. I expected some unfriendliness, but I was surprised to find that there was nothing like that.”

SK Telecom became more flexible when it merged with Shinsegi Telecom, the third player in the mobile industry, in 2002. SK Telecom president Kim Shin-bae, who was in charge of the merger, said, “I think I drank more amounts of soju with workers of Shinsegi over that one year period than I drank over the previous decades combined.”

Last October, SK Telecom eliminated the titles of all positions except team leaders and decided to use the term “manager” with all employees, officially declaring a horizontal corporate culture. A manager is defined as an employee who has expertise and responsibility to his or her own work regardless of positions and hierarchy.

Team leaders can never abruptly tell team members about a department dinner for the day. A few team leaders said, “Sometimes it is puzzling when team members say whatever they want.”

“One of the Best Workplaces in Asia”-

Manager Chae Yeong-hun, 37, who got married late last year, went for a vacation for three months. He went on a honeymoon to Europe for three months using vacation time given to him for working 10 straight years.

Also, in the first basement of the company building, there is a big sports facility called “Actium” that has fitness equipment, a yoga room and a basketball court.

However, SK Telecom employees’ freedom is geared towards generating profits. They should create values while taking advantage of such freedom to show creativity.

The SK Management System (SKMS), the management bible of SK Group, says, “Manage the use of employees’ brains.” Even in the “education for leaders” for team leaders and above, the handbook states, “Solve problems after monitoring the physical and mental conditions of each team member.” For the development of a company, even employees’ freedom and feelings are subjects of monitoring.

A meticulous and strict evaluation system is closely related to the management directions. An assessment is conducted on four levels including the evaluation of individuals, teams, departments, and sections. Individuals are evaluated in a multi-faceted way including team members’ and a team leader’s assessment. An employee said, “Sometimes, it takes almost a day to assess.”

Some complain that they feel tight when the free organizational culture is directly linked to the accomplishments of the company.

Partner companies providing content for wireless Internet often use an expression, “Go to Cheong Wa Dae (the presidential office)” instead of “Go to SK Telecom.” An SK Telecom employee said, “It’s not the environment of the company. There is no other way than doing so because we have to achieve goals.”

These days, some customers are showing dissatisfaction. On April 10, a man drove a Mercedes into the head office of SK Telecom to protest poor service. President Kim posted on the internal website on April 16, “As we have focused on the future growth and have had an arrogant attitude as a No. 1 leader, we may have been careless to our customers.”

An employee said, “We, internally, lack understanding into the negative perspective from the outside. Of course, efforts to enhance the image of the company are important, but we need to come to the customers’ level and think more about what they really want.”

mikemoon@donga.com