“Employees with healthy bodies and minds represent a company’s true potential.”

Many entrepreneurs claim that “people are the ultimate value,” yet few actually put this into practice. In most cases, corporate profits or market power take precedence over the value of the individual. In this regard, Kim Young-yul, President of Peopleworks Co., Ltd., stands out as an exceptional CEO. I met him at his Gumi factory, where he expressed his philosophy: “I do not want to skimp on investing in my employees.”

Peopleworks originated as a spin-off from LG Information & Communications in 2000, specializing in power amplifiers. The group currently comprises three entities: Peopleworks Co., Ltd. (Red), which manufactures information and communication components; Peopleworks Promotion Co., Ltd. (Green), a promotional agency; and Peopleworks Communication Co., Ltd. (Blue), a full-service advertising agency.

In March of this year, Peopleworks marked a new turning point by successfully integrating the corporate identities (CI) of its three distinct business units—spanning manufacturing and advertising. CEO Kim serves as the professional executive leading all three companies.

The interview with President Kim took place at the Peopleworks Co., Ltd. factory in Gumi. He believed that a visit to the Gumi facility was essential to truly understand the corporate values ​​Peopleworks upholds. Although he maintains a busy schedule, President Kim never misses his weekly Wednesday visit to the Gumi plant; for this interview, he extended his stay by an extra day to welcome our reporting team.

The factory was located within the Gumi Industrial Complex 1; its fresh, modern exterior stood out strikingly against the backdrop of older, drab industrial buildings. Sure enough, Vice President Woo Jun-hwan, who greeted us alongside President Kim, mentioned that the building had won the "2006 Korean Architecture Award."

Before the interview began in earnest, we toured the facility for about 30 minutes while Vice President Woo explained the company's operations. He noted that while Peopleworks started out manufacturing power amplifiers, it now produces a range of products—including power amplifiers, signal repeaters, and LCD inverters—and is leveraging its accumulated advanced technology to expand into the defense industry. He also added that LCD inverters account for 60% of the company's total revenue.

The factory is a three-story building; the first floor features a fully automated production line and clean room facilities, creating optimal conditions for manufacturing high-precision components. The second floor houses the research laboratory, meeting rooms, and administrative offices.

However, the areas that truly embody the management philosophy of PeopleWorks Co., Ltd. are the outdoor futsal and basketball courts and the third floor. The third floor, which includes the company cafeteria, is equipped with a kendo studio, a gym, and a movie theater for employees. In particular, the rooftop garden on the third floor serves as an exceptional space for staff to relax.

Employees who had just finished lunch were taking a break in the rooftop garden. Outside the factory, a group of young staff members were playing soccer on the futsal court. President Kim, seated on the outdoor terrace, explained that he had recently extended the lunch break to an hour and a half because some employees were missing lunch to exercise. It was then that the company’s motto came to mind:

“Through people, we dare to see eternity.”

- Business is war; the combat capability of each individual employee is crucial for victory. -

“If we were in Seoul, building a futsal court or a basketball court inside the factory would have been impossible. It’s only possible here in Gumi. The infrastructure is excellent, and above all, there is an abundance of outstanding talent. Many of our employees come from farming families; having grown up in challenging environments, they possess patience and a considerate nature toward others. The ethics of an agrarian society still linger here.”

Unlike the typical CEO, President Kim did not discuss the company in terms of figures like revenue or operating profit. Even though PeopleWorks Co., Ltd. has seen its revenue surge dramatically—rising from approximately 79.5 billion won in 2008 to about 121.1 billion won this year—he does not make a big show of it.

“If we had prioritized rapid outward growth, we would have listed on the KOSDAQ market years ago. When I took over as president in 2002, the company’s goal was to go public on the KOSDAQ. At the time, however, we produced only a single product—an amplifier—which entailed significant risk associated with relying on a solitary item. I decided to revise that goal, judging that a KOSDAQ listing was premature. The backlash—not only from major shareholders but also from employees who held minority stakes—was stronger than anticipated. Yet, sales began to decline and we fell into the red the following year; had we gone public back then, our stock price likely would have plummeted by half. We managed to overcome the crisis by investing in R&D and diversifying our product lineup. Based on our internal valuation, the company’s stock is currently worth about three times its face value.”

Given that most competitors who once manufactured amplifiers have since gone out of business or seen their sales plummet, his decision to diversify the product lineup proved to be the right one. Of course, the process was far from smooth; he faced strong resistance from his own researchers. He chose not to bring in outside talent while expanding development from amplifiers to products like signal repeaters and LCD inverters, believing the risks associated with recruiting external teams were too high. Instead, he placed his trust in the in-house researchers who had built up technical expertise over years of making amplifiers.

However, the researchers pushed back. It was inevitable that those accustomed to working solely on amplifiers would object to being tasked with developing signal repeaters. Even the head of the R&D center at the time deemed the plan reckless, remarking that it was "tantamount to telling a surgeon to go practice dentistry." Yet, unlike the R&D chief, there were others—like the current Vice President Woo—who believed, "With our technical capabilities, it is possible." Ultimately, the plan that had once seemed reckless turned out to be a success.

The product paradigm shifts every three years. Researchers are now aware of this fact. Some of the more capable researchers adapt on their own, while those with greater expertise mentor their colleagues—a process of self-driven growth.

“Business is war. There is no such thing as perfect preparation when entering a new market; if you wait for that, you’ll be too late. High margins come from early entry. You have to open fire and step onto the battlefield before everything is perfectly ready. In war, a commander’s ability matters, but the combat skills of individual soldiers matter even more. I am always grateful to the employees who have trusted and followed me.”

- With a strong body and a resolute mind, there is nothing one cannot achieve -

CEO Kim attributes this capacity for change to robust physical stamina. The presence of futsal, basketball, and kendo facilities within the company clearly demonstrates the high value he places on physical fitness. In fact, Kim is an all-around athlete himself, enjoying tennis, kendo, skiing, and hiking; he even practiced kendo at dawn on the very morning of the interview.

PeopleWorks Co., Ltd. boasts an unusually high number of former athletes among its staff. Beyond the expected basketball and soccer players, the roster even includes a curler—an athlete of the sort rarely seen outside the Winter Olympics. One employee who practices kendo with him is a former kendo trainee who had studied the sport in Japan; Kim hired him after seeing him struggle while running his own kendo gym.

These individuals are people who have once been completely obsessed with something. If you simply point them in the right direction, they possess explosive potential. As long as they are physically fit and have the right mindset, they can accomplish almost anything. When they channel the energy they once poured into sports into the company, the organization gains immense potential.

The benefits of exercise go beyond the physical. Fundamentally, exercise requires self-discipline. He has played tennis for nearly 40 years, yet he has spent the last three years practicing to alter his swing technique after adopting a new approach. Through sports, he realized the truth that nothing is gained without effort.

The spirit of fair play is another essential aspect. Most people who engage in sports value fairness; when they lose a match, they know how to accept the outcome gracefully. He emphasizes fair play in business as well, striving to ensure that employees feel they are being treated fairly within the company.

“Problems inevitably arise in business. People with the physical stamina to handle the demands don’t get irritable in such situations. There are those who snap at their subordinates or place blame on others when things go wrong; that happens because they lack physical stamina. The best approach is to accept the situation calmly and for the CEO to step up and apologize personally.”

Along with physical health, the mental well-being of his employees is a top priority for him. Hiking is an excellent activity for strengthening both body and mind, and CEO Kim is an avid hiker himself. The company-wide hiking trip held every June to mark the anniversary of the company’s founding has long been a key corporate event.

“When you go to the mountains, you must learn to let go of many things. Only by letting go can you fill that space with something new. Ultimately, management is about cultivating foresight and intuition. And the best way to hone your intuition is to immerse yourself in nature. When I first started the amplifier business, I realized that sticking to the status quo meant I would likely fail within two years. That’s why I changed course. I often head to the mountains whenever I have to make a difficult decision.”

In short, the hike is a grueling, non-stop trek. Hiking for 14 hours a day over the course of two days is tantamount to endurance training; it is a course that is difficult to keep up with unless one is properly prepared. Occasionally, President Kim would deliberately alter the route just as the group was nearing the destination. The business environment is constantly changing, and one must know how to adjust goals in response to those shifts. He wanted to impart that lesson through the hiking experience as well.

“I want to build a company where employees are mentally healthy. A company and its management must offer love and trust to their staff. When that happens, sales and operating profits naturally improve. Although we are small in scale, our employees’ salaries rival those at major corporations. As you can see, our working environment is excellent, too. Our employees take great pride in the company.”

- Reasons for personally placing advertisements to support SsangYong Motor and driving only SsangYong vehicles -

As we talked, I got the impression that he was a man of strong convictions and unwavering resolve. Once he makes a decision, he stands firmly behind it. His choice of car is a case in point; he currently drives a SsangYong Chairman W—his third SsangYong vehicle. When the company faced a crisis earlier this year, he even personally placed an advertisement in a daily newspaper to show his support while it was reeling from court receivership.

“My company’s chairman tried to talk me out of it at the time. Yet, I went ahead with the ad despite the objections of those around me because I had faith in SsangYong. I drive a four-wheel-drive model. Developing a four-wheel-drive passenger car is a massive undertaking for a company of SsangYong’s size—the kind of feat usually reserved for the market leader. But they pulled it off through sheer tenacity. That is exactly the kind of thing that inspires trust.”

The initial reason for driving a SsangYong vehicle was curiosity and anticipation regarding the fact that it was equipped with a Mercedes-Benz engine. However, the car’s performance exceeded expectations. It offered a pleasant ride, with cushioning that felt comfortable despite a firm feel. The steering, in particular, was excellent when cornering.

When evaluating cars, people in Korea often focus heavily on design elements such as the exterior or the shape of the headlights. However, those who are knowledgeable about cars prioritize fundamental performance aspects like horsepower, suspension, and steering. His view is that "SsangYong offers the best performance in its price range."

“The new model also instills confidence in SsangYong Motor. It is common for companies to simply tweak a design and release it as a ‘new model,’ but SsangYong is different. They seem to put a great deal of effort into enhancing performance. Seeing that, I get the impression that they are a truly consumer-oriented company.”

People tend to be drawn to entities that resemble them, and CEO Kim is no exception. SsangYong Motor and PeopleWorks Co., Ltd. share a resemblance in their consumer-centric approach and their willingness to invest heavily in R&D. They also share a common ambition: to achieve economies of scale despite their relatively small size. Ultimately, what he pursues is the “Beauty of Scale.” He places greater importance on operating profit per employee than on total revenue; outward appearances matter little to him. His long-standing vision is to retain only core competencies in-house while outsourcing everything else.

“What matters more than outward appearance is how beautifully a company endures as a going concern. At a company like Germany’s Osram, for instance, you sometimes see three generations of the same family working there; they even offer benefits to the children of employees when they join the firm. I, too, want to build a company where even the grandchildren of our employees will work.”

Source: Hankyung Money (November 2009)