[INTERVIEW] Managing outside the box

Coway CEO Lee Hae-sun poses during an interview with The Korea Times held in Seoul last week. / Korea Times photo by Choi Won-suk

CEO Lee put Coway back on track with detail marketing

By Kim Ji-soo

One wall of Coway CEO Lee Hae-sun's office is covered with pieces of white paper that contain either a haiku or motivational words for his employees. In general, the head of the country's top water and air purifier maker likes to take notes when ideas strike him, whether he is alone or in conversation with others, and those notes end up on the wall.

During an interview with The Korea Times, he pulled out a pocket-size notebook showing the notes he jotted when he met with field service agents the day before.

"Here, I have written down an idea of providing social media messages to consumers who have not drank water in the past 48 hours," Lee said.

The message would be sent to a pre-registered number, for example telling children of elderly parents to contact them if they have not used the water purifier for 48 hours.

"This was one of the ideas that I got from our Coway field ladies."

Coway has 18,000 field agents, called "Cody" for short, serving as on-the-field customer service representatives. A large number are female and with the water and air purifiers the core focus of the business, the Cody agents dealing with water purifiers stand at about 13,000 of the total 18,000. The company makes and also provides rental services for wellbeing home appliances such as water purifiers, air purifiers, bidets and mattresses.

Then Lee pulls out a prototype handheld water mist product he hopes to soon introduce to the market, another idea he gained while talking with Cody agents. These field service people are key to the success of the company that commands a 40 percent share of the water purifier market and a 36 percent share of the air purifier market. The company also owns the cosmetics brand Re:NK.

"The field is very important not only because it is where merchandising takes place, but also where marketing occurs," Lee said. "Many leaders think their job is to paint the big picture, but the details are also important."

Lee Hae-sun's handheld notebook, in which he jots down ideas whenever they strike him / Korea Times photo by Choi Won-suk

Lee's focus on the field and his track record in marketing have allowed him, since taking office last November, to maneuver the company back into a stronger performance this year. Coway is looking to achieve 2.67 trillion won in sales and an estimated operating profit of 494 billion won this year. It is a figure up from 332 billion won in 2016. In the second quarter of last year, the company struggled after metallic substance was detected in three of its ice water purifier models. The products were recalled, the production of the affected models stopped and consumers were compensated.

"When I joined this company, I thought a lot about how to promote the essence or legitimacy of our business that deals with water and air, which are, when you think about it, semi-public commodities. The answer was (establishing) trust through quality products," he said.

Lee set out to regain consumer trust, setting up an infinite responsibility committee and ensuring product quality."I have instilled a Coway Trust theme throughout the company. And we have been holding, every week, an Infinite Responsibility Committee. So as of today, (we have held) 40 committees," he said.

"A business must always think of what its legitimacy is."

To further promote the firm's dedication to product quality, Coway has been holding marathons as a way to remind people why good water is necessary, and holding such festivals for making "dongchimi" or white kimchi, for which good quality water determines the taste.

The company is also aggressively eying overseas markets. Coway has succeeded in Malaysia, where it offers the same services as in Korea to 540,000 subscribers. In March in the United States, it introduced its Airmega air purifier, which can be connected to Alexa, Amazon's voice-activated assistant service. It will soon introduce its Aquamega water purifier, which also can be connected.

Lee started out his career with Samsung Group in 1982. Asked what his blood type was, he said "B, same as that of the late Lee Byung-chul" (the founder of Samsung). Lee previously served as vice president of marketing at AmorePacific, and as CEO of CJ O Shopping and CJ CheilJedang.

During those different stages of his career, which correspond with an important industrial shift, he also detected a certain shift in the focus of marketing.

"I think during the First Industrial Revolution, products were about serving a core functionality. During the Second Industrial Revolution and during the early stages of the third, products were more design- and emotion-oriented.

"Now, brands must be able to provide a cultural value or cultural function to whatever lifestyle consumers lead, whether they live alone or with others. Thus, these days, I spend a lot of time studying lifestyles and how I can add value to them (through our products)," he said.

He is known as a marketing whiz, and he attributes this reputation and his success to his curiosity.

"Marketing is doing business profitably, and to that end, the products, services and systems put in place by people should be considered crucial," he said.

He does not shy away from the title of marketing whiz, and said his younger of two sons has taken after him and now works as a marketer for a leading Korean company.

He said he has been reading magazines such as Fast Company and Wired for two decades. Those magazines and books provide source of references and insight for him.

His expansive career has seen its share of failures — unsuccessful brands or products — when he did not devote enough time or effort to his homework.

"When you are not fully informed on the fundamentals, not only do you feel uncertain, your products rarely succeed," he said. "Be true to the fundamentals."

Coway is looking to constantly upgrade in its core filter capability, Coway Intensive Reverse Osmosis (CIROO), to stay ahead in the competitive market.

For Lee, a bigger goal is to become a "hidden champion" company by 2020. "Because the competition is extensive, we will continue to upgrade our core filter technology, the CIROO filter system, and offer upgraded goods and services, combined with the internet of things (IoT) and artificial intelligence," he said.