▲ Kim Jun, CEO of SK Innovation
Q1. You’ve been busy with touring the company’s local and overseas business sites and attending CES as well as Davos Forum since the beginning of the year. How have you been greeting the new year?
It’s already been about a month since the new year began. I guess CEOs, executives, and all members of SK Innovation’s subsidiaries must have found that the end of last year and the beginning of this year were busiest time of the year. It’s because much in the same way how you spend the dawn of a new day will determine how you perform throughout the day, the start of a new year is important. It’s been a busy start to the year for me like everybody else and I’m also keeping our stakeholder’s best interest in mind and resolutions for the next 10 years.
Q2. Top management of SK Group and CEOs of its subsidiaries attend Davos Forum every year. You were there this year as well. What were your takeaways from the forum this year?
Davos Forum presents a good opportunity to observe macro-economy and international trends as well as meet with gurus of major industries and sectors and learn from them. The forum is particularly important for SK Innovation since we have a lot of things to do now to look back on where we stand with our main business and at the same time, predict the future and create new business. That is why I attend Davos Forum. I discuss and share what I hear, see, and feel there with the top management of SK Group in various ways.
Meeting people in this year’s forum, I realized once again that we are currently going through severe, daunting and clear changes. The most frequently mentioned word in the forum was ‘Stakeholder Capitalism’. It is all about shifting the primary purpose of management from maximizing shareholder values to serving the interests of stakeholders. Acknowledging the need for the shift, SK Innovation also changed our objective function to ‘happiness’. The forum was an opportunity for me to contemplate what we need to make the company and our stakeholders happier as the CEO and President of SK Innovation.
Q3. SK Innovation participated in CES this year and it was two years in a row. You were there both last year and this year. How was it?
Even though it’s only the second year for SK Innovation to attend CES, now it’s hard to find someone among people around me who asks why SK Innovation attends CES. This means only within two years, people consider SK Innovation’s participation in the event natural and obvious. Now, I’m thinking about not only what we have to show there but how we are going to expand our business through a platform of CES.
CES 2020 showcased a variety of things but it was most impressive that boundaries between industries are breaking down. E-commerce business introduced pickup trucks, an electronics company displayed AI-based concept vehicles, and an automaker demonstrated its commitment to a new type of mobility such as flying cars. In a sense, these examples mean that SK Innovation’s business scope and what it can do can be further increased. Seeing these changes, I suppose attendees from our company also were kind of convinced that all companies there can be our customers.
▲ CEO of SK Innovation, Kim Jun, takes a look around booths of global automakers attending CES 2020.
‘If we stay ahead of changes, we will have a tremendous opportunity. If not, we will face a crisis’. This is what all attendees from our company saw and felt there firsthand and a great insight we gained from the event. I believe everyone realized that we need to strengthen our capability to make deep changes.
While listening to ideas and sharp observation of attendees from our company at CES who also prepared for the event, I was convinced that it will be nice that CES will be a cutoff by which we evaluate our annual performance and reinforce our efforts for the following year. We will continue to participate in CES to examine the direction we’re heading and increase our capability to implement our plan.
▲ CEO of SK Innovation, Kim Jun, and other members of SK Innovation’s top management at CES 2020
Q4. Let me ask you one more question about CES. SK Innovation drew attention by coming up with a slogan of SK Inside. What does SK Inside mean?
SK Innovation strives to develop innovative ways to keep our customers happy and grow through those them. This explains the introduction of the idea designed to make deep changes from the existing B2B business model to B2B2C. Under the idea, whether innovation is successfully executed is determined by whether the business (B) which the final customer (C) chooses includes SK Innovation’s innovative technologies and products. In other words, innovation we’re facilitating should be successful enough to satisfy the customer of the business. This is the way we foster innovation to keep both our customer which is the business and the final customer happy.
SK Inside bundles up technologies and products with competitive edges that SK Innovation provides for the final customer through the business. It can be understood as a concept that SK Innovation’s technologies and products are at the heart of innovative e-mobility. E-mobility is expanding into every sector including eVTOL, e-ship, and e-train, going beyond vehicles. I believe SK Innovation will play a very important role in this expansion.
SK Innovation has the best solutions in all sectors including batteries which are the heart of e-mobility, ultra-light materials which are the build, all kinds of lubricants that are the blood, and FCW, the display material, which is the face. Our strong suits also include synergy effects created with the affiliates such as SK Telecom, SK Hynix, and SKC. Through SK Inside, we mean to show our commitment to growing together by playing a pivotal role in developing the ecosystem of the future e-mobility industry.
▲ ‘Evolution for Future Mobility’ is a model of ‘SK Inside’, showcased at CES 2020 by SK Innovation.
Q5. SK Innovation announced that this year will be ‘the year to lay the groundwork for a voyage of the next 10 years’ and suggested an idea of promoting innovation to keep customers happy as the first initiative. What do you mean by promoting innovation to keep customers happy?
Customer needs and needs of society are changing in a complicated and multifaceted way. Unless we look ahead and fundamentally change the way we do our business and work, nobody can really guarantee the future of the company.
This is time that we should be able to design an innovative business model that can satisfy needs of customers and society that are dynamically changing, and to provide them with new values. One of the ideas we developed to meet the needs is the concept of B2B2C, an extension of B2B, and the way to implement the concept we suggested is ‘SK Inside’. One example that illustrates the way is SK Energy’s platform business based on gas stations.
Through SK Inside, we will be able to create a virtuous cycle where we can keep our customers happy, bring in more customers, and meet the changing needs. Wouldn’t this be a way to create happiness in a sustainable way? In that sense, this is one way to understand the meaning of promoting innovation to keep customers happy.
Q6. You declared a vision of ‘Green Balance 2030’ which aims to reduce negative impacts on the environment and carry out active portfolio transformation to create proactively positive impacts on the environment. What is your plan to implement Green Balance 2030 in 2020?
Green Balance 2030 is a goal that SK Innovation must achieve to continue to create happiness for its customers and members. Under the three pillars of business models of Green, Technology, and Global, we will actively make the portfolio transformation this year also.
The battery and the material business are the growth engines of SK Innovation and they are green business as well. We will continue to make aggressive investments in the two business areas, expanding their share in our portfolio. On top of that, we will look for new growth opportunities in the field of Beyond EV Battery, a future industry, by taking advantage of capabilities of the battery business. To that end, we will first identify BaaS (Battery as a Service) as a new business area, making the whole value chain process from battery production to reuse a platform.
We will also continue to make our oil and chemical business greener. Ultralight materials containing all relevant technologies and high-performance green lubricants will be a pillar of SK Inside in e-mobility. We are leading the efforts to create a green ecosystem such as development of eco-friendly products and recycling of plastics.
To explain our efforts to strengthen capabilities of implementing Green Balance 2030, I should tell you about organization of SK Innovation’s ‘C-level Team’. This top team consists of CEOs of SK Innovation’s subsidiaries, and under the team, we plan to build teams assigned to each major agenda of Green Balance 2030. With the top team in place, we will be able to use collective intelligence of the CEOs and the executives of the company to set mid- and long-term directions and devise ways to execute our plans.
Q7. Recently, it is said that SK Innovation is in a difficult time to manage. How are you going to navigate your way through times that feel tough as CEO and President of the company?
SK Innovation has strength it has built up while undergoing and tackling crises and challenges. I’m sure that the current challenges will turn out to be a stepping stone for the future growth of SK innovation. We have already prepared ourselves for the challenges, and are changing our business structure, financial structure, and corporate culture for innovation to respond to them.
Figuratively speaking, SK Innovation has physical strength considerable enough to survive in Alaska characterized by long winter. And now, the company has moved to an African prairie to continuously grow its business where the law of the jungle rules. The path we are trying to go down is not about managing to survive temporarily in the food chain but about ensuring continued survival and reliable growth. The path can be seen as a game changer.
From the perspective of business SK innovation conducts currently, today’s game is completely different in its form from that of the past. In this different setting, we decided to set our sights on finding a totally new equation and a path, and we will walk the path unswervingly.
Q8. Internally, SK Innovation changes its objective function to ‘happiness of its members’ as it announced, what is your focus on to make the people in the company happy when you manage it?
I define happiness in three ways; your own happiness that you create, happiness that comes when you are considerate of others, and happiness created by the power of positivity. I intend to set a goal for happiness and introduce systems to ensure the way we manage the company can make it a place that keeps its members happy.
If we pursue happiness only on a one-off basis, we will never be able to achieve true goals of or live up to expectation about management keeping members happy. Instead, we are going to work on examining and analyzing data on the level of happiness among our members, and creating and carrying out assignment designed to increase the level on a regular basis. In this process, all members of the company will have high level of engagement. I will do my best to make sure the process sets in and a culture is built around it.
Once the members of the company stay happy, they can be the epicenter of happiness, keeping the primary and the secondary shareholders happy, and then happiness can trickle down to the whole society. I’m asking all members of SK Innovation and its subsidiaries to keep in mind that creating happiness starts from themselves, and everyone should do it together and be positive about it so that our efforts to pursue happiness can produce fruitful results this year.
Q9. You made commitment to happiness that you will sit down with members of the company more than 50 times this year for their happiness. How well are you following through on the commitment?
I made the commitment at the end of last year. What we call ‘commitment to happiness’ is about that we have a small and casual gathering where a small group of people get together and are happy to meet together. We plan to have more than 50 such gatherings this year. It is important that we meet more than 50 times. But, it is more important that we listened to members of the company about what makes them happy and how we incorporate it into the way we manage to make sure their voices are heard.
I celebrated the New Year’s Day this year by watching a live broadcast of sun rise on the Korean Peninsula seen from SK Ulsan Complex before going straight to SK Incheon Petrochem to talk with members of the energy company over rice cake soups. With a gusty and cold winter wind blowing that day, I saw members of the company in charge of unloading crude oil at the dockside working hard, which put me in deep thoughts.
▲ CEO of SK Innovation, Kim Jun, shares his commitment to happiness with the company staff at SK Incheon Petrochem (left) and CES 2020 (right).
We also had a group talk between executives and between working-level employees at CES in Las Vegas as well. It was open and honest conversations. On January 13, I spent quality time with members of SK Ulsan Complex and heard about what makes them happy. While listening to them caring about their co-workers in these difficult times, I realized what being happy together truly means.
The idea of commitment to happiness is about that members of the company agree that the company’s primary goal has shifted away from making money to creating happiness, believe that the more people are happier, the happier an individual can feel, and commit to doing something to create their own happiness. Believing in the idea, I took the initiative in commitment to happiness. If you join me in the commitment, I will feel more encouraged to lead the efforts.
Q10. Lastly, would you like to give a message to stakeholders and members or the company?
SK Innovation is on an epic voyage for increasing happiness for our customers and members and accomplishing sustainable growth. It is high time for us to create more happiness, but we are facing a challenging management situation this year.
Looking back the 60 years of the company’s history, however, as I mentioned earlier, we’ve turned challenges into an opportunity to grow further in the future. So, I’m not afraid of the current challenges. I’m sure that the challenges we’re facing will be a source of making SK Innovation stronger and transforming it. This is the company’s strong DNA that we should be proud of.
I ask you to encourage and be on board for this epic voyage to create greater happiness and achieve sustainable growth. As one of the members in the company once said, “Happiness is neither created nor grown on its own”, we should be able to create our own happiness this year. I’d also like to say I hope the new decade is off to a good start for everyone.