Born of this Land - The Founding Story of Hyundai

These are my notes on Born of this Land by Jung Joo-young. I read the book and summarized it for my own reference. Hope it helps you too.

Beating a Lack of Schooling With Flexible Thinking

Jung Joo-young only finished elementary school, and he left his hometown to escape a life as a farmer. He had no higher education, but he thought harder than others, calculated more precisely than others, was more adventurous than others, and had courage and conviction.

What he hated most was rigid thinking. Once a worker treated a mixer truck as a finished product and just sat waiting for a crane. Jung scolded him. Why not change the height of the truck's concrete outlet to fit the formwork, drop the clumsy crane, cut the working time, and stop wasting people? Jung believed that being a slave to stereotypes (fixed ideas) makes you less adaptable. A textbook mindset is a stereotype, a trap that makes us stupid. If you look for a way, you'll find one. If you can't see a way, you haven't thought about it hard enough.

• Hyundai Shipbuilding built a shipyard and ships in two years and three months, which would have taken anyone else five. It broke the common sense that you can only build ships after the shipyard is done, and did both side by side. If you're used to avoiding obstacles, you'll just work around them even when you need to break through.
• When Jung first started taking outsourced jobs from the US military, he had to cover a UN cemetery with fresh green grass in the middle of winter. He faked it with barley, won the US military over, and from then on, every US Army job in Korea went to Hyundai.

Give up Short-term Gains for a Long-term Vision

In any endeavor, new challenges require tuition. A smooth ride is not a challenge.

When bidding for a project in the Middle East, he bid a little low on purpose, even at a small loss, to make a workplace where Korean workers could earn dollars. The dollars they earn are dollars the country earns. Just finishing that project would also give Hyundai an international reputation, which would help a lot in winning overseas projects later. So winning the bid, even cheap, was smarter than losing the job over short-term profit.

The hardship of building the Koryeong Bridge. Hyundai was so set on winning the contract that it didn't calculate, predict, or prepare for anything else. In the end, massive inflation brought huge losses. But Jung knew credit was everything for a businessperson, so he pushed on, determined to finish the construction no matter what. Hyundai E&C finished the bridge at a big loss, earned a lot of trust for it, and that trust helped it win government contracts.

The hardship of building a highway in Thailand. Jung ran Hyundai E&C, but he couldn't think only about Hyundai. He once thought about stopping the project altogether to stop the losses. But quitting would have shut other Korean construction companies out of overseas markets. Despite big losses on the Thai highway, Jung believed a contract is a contract and has to be finished, money trouble or not. He did lose a lot. Still, building that first highway put him at the front of Korean construction companies and paved the way for his fast growth into an international construction company.

Progress Comes With Risks

Even after a massive fire left him in debt, Jung pushed forward, sure he could make things happen. He believed meaningful things should be made to happen and quitting was not an option. When he was trying to get a loan for Hyundai Shipbuilding, which had no shipbuilding experience and no shipyard, he showed them the Korean turtle ship (거북선) he had in his pocket. Koreans had been building ironclad ships since the 1500s, he argued, and even though the isolation policy had slowed industrialization and let people's skills and ideas rust, the potential was still there.

Disillusionment With Politics and Authority

During the Korean War, Jung was deeply disappointed by how casually politicians treated the war. He also felt incompetent governments had neglected the country's interests as Korea modernized. He believes people who can do the job well should get the positions. Instead, every time there's political upheaval, the new regime arrests innocent businesspeople and falsely accuses them of hoarding and tax evasion, to calm the public and cover its own weaknesses. Because the government lacked integrity, people grew prejudiced against business. So many people ended up in an odd spot. They want companies to grow so Korea can compete in the global economy, yet they don't want companies to grow.

Efficiency is Key

When Seoul hosted the '88 Olympics, Hyundai planned and built everything on one principle. Prepare thoroughly, so there's no deficit and no regret. A country spending taxpayer money should build the most efficient facilities for the least money.

不恥下問

There's a saying, 不恥下問. It means there's no shame in asking someone younger or lower in status about what you don't know. Across many construction projects, Hyundai learned a lot from American engineers, and it was serious about learning everything it could.

Time is Money

In the early days of Hyundai Auto Services, Jung charged high repair fees but cut the repair time from ten days to about three. People who use cars as their own "feet" would rather have their feet fixed fast than save a few dollars. The same goes for the whole world. Rather than waiting for the perfect moment, we should value time and get to work. If underdeveloped countries keep waiting, they'll stay behind developed ones, so Hyundai had to move faster.

Entrepreneurship

Jung believed a company exists not just for profit but to help the nation and society develop. So he argued companies should chase growth and profit while also satisfying customers and taking social responsibility. Companies aren't there to make any one person rich. They're there to build a more developed country and a better life for its people, while paying a big share of the taxes that fund national welfare.

Jung rejects the argument that big companies are the problem, saying size is essential for growth and competitiveness (Too Big To Fall, so to speak). The real problem, he says, is companies that monopolize the domestic market and sell domestic products for more than the international price. Companies should grow by satisfying customers and meeting their social responsibilities.

Koreans as the Real Resource

Because Hyundai has the world's best weapon, and that weapon is the world's best artisans -- the Korean people.

Talking about Korea's economic development and patriotism, Jung stresses that Korean workers built the country's world-class construction and shipbuilding, and that today's economic success comes from creative, hardworking people. He also says Korea's people are worth far more than its material resources. A country's wealth runs out, but human creativity and effort don't. Growth that depends on resources stops when the resources are gone, while growth from human effort can keep going.

Jung believes Korea can become the center of Asia and a model nation for the world. A unified Korea could have 60 to 70 million strong, wise people, he says, but that takes constant effort and dedication. So the noblest thing anyone can do is work and study hard for their country and their people.

It was not for the government of the day. It was for my country, where I was born, live, work, and where my children will live. Whether we like the government or not, the country will always be ours and our children's. It should be eternal, developing, and prospering day by day.

Always Thinking

Jung Joo-young's thoughts always come one after another. He keeps several ideas going at once and works on them in parallel. While working on a US military project, for example, he's already thinking he needs a government contract next, and that he needs to go overseas soon. That hunger to do big things is what keeps an entrepreneur going.

President Park Chung-hee

President Park was a flawed leader who took power in a coup, but Jung admired his determination and commitment to national development, and how smart and thorough he was about carrying it out. Park read the Korean economy of the time accurately and made bold, groundbreaking decisions to modernize it. He chose to trust Korean entrepreneurs who had no experience and little to stand on, and the government guaranteed foreign loans based on the business plans they submitted. Jung had no other thought than to help the president and put the country first.

Park: I said, the president of a country and the deputy prime minister of the economy is helping you. And you can't do that one thing, so you give up? So you thought this would be easy when you first said you would do it? Of course, you knew it would be difficult. And still, if you made a promise, you should do it no matter what, no matter how you do it, and now you're saying you can't do it because you can't just try it once more? Jung had no words.

Luck is Mostly Timing

Jung doesn't believe in luck. To him it's mostly timing. Hyundai built a shipyard in the early 1970s when everyone said it was a bad bet, and that timing let Hyundai E&C take off in the Middle East in the mid-1970s. Its work there then helped revive a heavy industry the oil shocks had left stranded.

Hyundai's Goal

Hyundai aims to create wealth in Korea by earning money overseas.

Going from rags to riches is a race against the odds. To win, the poor have to work harder than the rich to make up for where they start. Hyundai is living proof of success through sheer hard work.

Challenges and the Politics of the Impossible

Jung was proud of what he'd done for Korea's growth. Still, he couldn't ignore that the country's economic foundation was shaking and the road to prosperity was getting bleak, so he went into politics. His dream was to bring together the drive of workers, the passion of businesspeople, and the hopes of ordinary people, the things that had made growth possible, and to reform politics to build an advanced, unified Korea. Whatever it took, he was set on keeping the country from failing and making it a place where everyone could live happily and well together.

Ownership

Retained earnings are often named as one cause of the Korea Discount. Korean companies keep their profits instead of paying dividends, so their stock trades below where it should. That's seen as a social problem today, but Jung, back then, thought retaining earnings beat paying dividends. He believed a company owned by shareholders would make the rich richer, and that a reliable, centralized company should be built to give back to society. Again, this may come from the times he lived in.

Rural Modernization and Food Self-sufficiency

In industrial societies, farming is treated as just a way to get by. Young people leave for the city, only the elderly stay, and a lot of land is abandoned. Even the smallest farms go to waste because nobody is there to work them. But Jung believes that we have to be self-sufficient in food no matter what.

Unions and Collective Selfishness at Hyundai Heavy Industries (HHI)

It was excruciating for the unions at HHI to suffer humiliation year after year, even though their treatment was so harsh, their working environment so harmful, and their welfare so inferior that they played a leading role in national union activities. They worked very hard, but I was doing my best. I felt an unspeakable sense of betrayal from them as if I had become a rogue entrepreneur who had achieved modernity by exploiting their wages. Their demands had nothing to do with the company's difficult situation and were endless. I miss those days when the country was united in its desire to escape poverty, and people worked day and night like fighters for independence. Even though they worked in much worse conditions, were treated much worse, had no proper equipment, and did almost manual labor, they had a sense of duty and pride in being an industrial force that played a role in the country's economic development. Their hard work should not be sacrificed to collective selfishness, which has made this country worth living in. Do we want to return to the poverty of the past? Without a country, there are no people, and without companies, there is no workplace.

Temporary Hardships May Exist, but Never a Complete Failure

Try your best until there's nothing left to try. Whatever he did, Jung never made a habit of quitting. He believes you must not give up halfway, even through hardship, and ties that to the growth of both the company and the country.