Network encompassing the world
Interview with Kook Jin Moon, CEO of Tongil Group
There is one business that is the focus of attention in the world because of its global network and its banner for change. It is the Tongil Group founded by Rev. Sun Myung Moon, head of the Unification Church.
Since 2005, Tongil Group has been going through revolutionary change, and at the center of this is its chairman, Kook Jin Moon who is a young man of forty-one. It is well known that the Tongil Group differs from other corporations even in its lineage. It was not initiated on the basis of the absolute ideology of pursing profit, and its structure is quite different from those of others corporations.
The business was founded on a religious background. Despite the difference from other corporations in its roots and in its founding philosophy, it cannot be denied that this is a business group that controls tens of affiliated companies. In an environment where the cold logic of capitalism applies even to the small neighborhood store, Tongil Group cannot be free from the logic of capitalism. We were curious to find out what – other than something religious – drives the growth of Tongil Group, and so we contacted the business.
Contrary to our feeling that somehow it would not be easy to set up this interview, the meeting between Tongil Group and Monthly CEO was arranged smoothly on the basis of an agreement between the two sides. Even on the day of the cover story interview and photo session, which involved as much work as a fashion photo layout, Kook Jin Moon, chairman of Tongil Group, surprised the photo staff with his impressive stature of 180cm, his natural smile and stylish poses. During the interview, his ability to speak Korean was limited, reflecting the fact that he lived and studied in the United States from the time he was three, but the content he conveyed was quite clear.
Communication as the power for change
Kook Jin Moon, the current head of the Tongil Group, is the fourth son of Rev. Sun Myung Moon. He is a typical member of the power elite, having gone to the United States when he was three, graduated from Harvard with a major in economics and received his MBA from the University of Miami.
Chairman Moon, who is said to have enjoyed toy guns as a child, founded the gun manufacturing company KAHR in 1993 and established the impressive result of growing this business to the point of bringing a profit of $100 million. He came to Korea in 2005 and was appointed as chairman of Tongil Group at the age of 36. Tongil Group at the time, despite its huge size, was living day to day with as many problems as a cancer patient in the last stages of life. During the years under Chairman Moon, however, Tongil Group has accomplished remarkable change and reaped incredible results as a result of being healed.
We were curious to find out how Tongil Group could grow so quickly and what had been the core force behind its change.
“Prior to my arrival, people related to the foundation were on the front lines of management. As a result, it would not be an exaggeration to say that there was virtually no management and administration going on. Of course, it was possible that this was inevitable, given the particular background to the creation of the business, but it is natural that a business needs a profitable structure in order to survive.”
Soon after Mr. Moon took over as chairman, he conducted individual interviews with all managers of the 30 companies in the group at the time down to the level of team manager. The purpose was to learn from the managers the strengths and weaknesses of each company. Also, the interviews revealed whether each person was someone necessary for the group. Those he judged to have potential to lead the changes in the group were given extraordinary promotions.
Mr. Moon also did not hesitate to bring in accountants and professional managers from outside the group and empower them with authority. Through this process, the employees who remained understood the seriousness of the situation, and were able to unite together to bring about the needed changes. Those who had been occupying important roles in the companies only for religious reasons were inspired by Mr. Moon’s efforts and cooperated with him.
Once Mr. Moon had comprehended the situation and analyzed its causes, he began a swift restructuring process. He moved with such speed that he sold or liquidated 11 affiliated companies in the first year alone. As a result, whereas 70 percent of the companies were in the red when he first took over, 90 percent were in the black after the first three years of his management. This incredible result provides a glance into Mr. Moon’s extraordinary abilities.
Inheriting the philosophy and managing rationally
The management styles of Tongil Group founder Rev. Sun Myung Moon and his son Kook Jin Moon are as different as heaven and earth. Whereas Rev. Moon practiced charismatic management based on religion, the style of the current chairman of Tongil Group relies strictly on data.
It seemed to us, though, that Mr. Moon was acting as something much more than a professional manager in managing the companies founded by his father on the basis of a particular religious philosophy.
“My father is a religious leader, and his purpose for engaging in business was less for the purpose of making money than it was for the purpose of educating people and contributing to the development of the country. The companies could not make profit in the way that others did, because they had a different purpose. I, however, studied economics, and I received an MBA degree. From my standpoint, it is only natural that any business exists for the sake of making money. It is from this standpoint that I manage and operate businesses. Of course, I consider it to be my responsibility to maintain the founding purpose of a company as I bring it stability. One system that I introduced following my appointment was the 'Six Sigma' management innovation program. This is a very effective program for continuous improvements in a company. This program was first developed by Motorola, but now many companies in Korea are using it. It sounds easy, but it is a system of making all decisions based on statistics and data. Once this system was introduced, executives and managers began making decisions based not on their personal opinions but on data, and the organizational culture changed as a natural result. In the past, companies had many ideas but few results. Now, we are able to bring about good results using scientific management.”
The Yeosu Project
From about a year ago, the Tongil Group has been pursuing the Yeosu Project, which is expected to require more than 1 trillion won in funds. It is a huge project that will bring about a tectonic shift in Korea’s leisure industry, but professionals question whether it will be profitable enough to justify the investment. We were curious to find out the chairman’s thinking and management policies for this project.
“The Yeosu project came about as a result of my father’s strong feeling that it is not good that the Yeosu region has experienced far less economic development than Seoul and other cities in the capital region. From a dispassionate standpoint, an accounting analysis of this investment shows that it will be difficult to make a profit. We are prepared to suffer a certain level of loss. It will not be profitable, but we intend to manage it by placing significance on the aspect of cash liquidity. Previously, a different person was responsible for the Yeosu project under my father’s direction. But the operating losses were too great, so I have been responsible for it for about the past year. After the transfer of responsibility, I have been adjusting the project to give it greater business feasibility. For example, we increased the cost effectiveness by managing it jointly with Yongpyong, which is another resort that we already have. My father has a strong desire to build a hotel in Yeosu in preparation for the 2012 World Exposition. We will build the hotel, but we have reduced the size considerably from what was originally conceived. By reducing the size of investments in the hotel and golf course, we are making it so that it will at least have business feasibility in terms of cash flow.”
As Mr. Moon explained the Yeosu project, he put particular emphasis on the importance of cash flow. It appeared that this was related to the direction that the Tongil Group would take in the future.
Now that five years have passed since he took over as chairman and a new decade has begun on the calendar, what are Mr. Moon’s views on what will be the main force driving Tongil Group over the next ten years?
“At this point, it is difficult to see ten years into the future. We spent the past five years restructuring the companies, and last year we had to work hard to overcome the global financial crisis. This year is the first opportunity we have to think about how we are going to develop our companies in the future. It is a fact that the group is concentrated in the leisure industry. About 70 percent of our assets are in this industry. The leisure industry presents opportunities for religion and business to come together to create synergy, because resorts can be used to hold religious conferences and educational programs. Leisure sports can be enjoyed by everyone, regardless of their religion or race. Because people can enjoy them together, they contribute to world peace. The Tongil Group currently holds a lot of undeveloped land. The focus of our business will be to analyze these land holdings and development them through condominium developments and other means. We have about 14 million pyoung (46.28 km², 11,436 acres) of undeveloped land. The value of our land is greater than the value of all our affiliated companies. In fact, a chronic issue with our group is that the size of our assets is large, but our cash flow is not good. We can say that during the next ten years, Tongil Group needs to go in a direction of taking unprofitable assets and changing them into profit-producing assets.
The power of a network encompassing the world
Tongil Group maintains a larger network, and is more influential, in the rest of the world than in Korea. It is known to operate hundreds of companies just in Japan and the United States alone. Assets include media companies, hotels, aircraft operating companies and a company distributing maritime food products in the United States, and the total extent of their external size is difficult to estimate.
We asked Mr. Moon about the overall current status of the overseas businesses, and he gave us a religious response. It may that this is, in fact, the essential strength of the Tongil Group.
“Because Tongil Group is a religion, we have a separate religious foundation in each country. A religious corporation has been created in each country. The religious corporation in the United States and the religious corporation in Japan are completely independent. All the religious corporations in countries around the world are independent. What binds these corporations in some 170 countries is our faith. My father has conducted many different businesses, for the sake of world peace. He conducted a series of international conferences of scientists, and he has done many activities to promote harmony among religions. He brought politicians together so that they could discuss peace. He brought these people together from different walks of life, because he is not a political leader or an economic leader but a religious leader. He did it so that all people could come together in harmony. That is true love, which is a love makes it possible for us to be with anyone, even an enemy. The Tongil Group is a foundation that is connecting the world with the power of such love.”
Chairman Kook Jin Moon gave us the impression that he is an exceptionally capable CEO who is able to graft the founding philosophy of the businesses onto the economic principles of capitalism. At the end of the interview, we asked Mr. Moon what message he would like to give to other CEOs in Korea. Because we are a journalistic organ required to maintain a neutral position in religious matters, we cannot print his response exactly as he gave it. Even a filtered version of his response, however, is enough to give us great expectation that Tongil Group under his leadership will grow tremendously in the future.
“As chairman, I would like for the Tongil Foundation to grow as an organization that contributes to Korea’s economic development and welfare. I would like to support the growth of the Unification Church so that Unificationism becomes a cultural asset for Korea. Because the Catholic Church is headquartered in Italy, millions of people visit Italy to tour the holy sites there. Millions of Islamic believers visit Mecca each year for a similar reason. From the standpoint of the nations involved, this represents a tremendous economic profit. Korea is the homeland for all Unification Church members around the world. Once the Unification Church succeeds around the world, many church members will visit Korea. Last year, from Japan alone, 120,000 people came to Korea to participate in the religious workshops held in Gapyoung, Kyonggi Province. The development of the Unification Church will bring benefits to Korea in many ways. Monthly CEO is a business magazine, so I will express it in business terms and describe the Unification Church as a start up business. Its current membership does not give it a meaningful share of the overall market, but it is growing very rapidly in comparison to what you see in the histories of other religions. If more companies take an interest in the Unification Church and support it, Korea will experience incredible development both in terms of its economy and its culture."
The article appeared as a cover story in the May 2010 issue of the Korean-language monthly magazine Wolgan CEO
