I am currently looking out of my living room window at the Pacific Ocean. I always enjoy the view, especially in the morning. Having a cup of coffee while looking at the ocean is very refreshing and is a moment I look forward to every day. And of course, walking on the beach is nice too. However, I recently fell and fractured my foot. No walking for me for 4 weeks…urgh! Balance is important.
I returned from my trip to the States 4 weeks ago. I spent 3 weeks in the US visiting kids, grandkids, and family. The main impetus for the trip was my grandson Mile’s 1st birthday. Anyone who knows anything about Korean families understands how important the 1st birthday is in Korean culture. Obviously, my wife and I had to travel to the US for his birthday. The birthday celebration went very well with the customary pictures and the traditional Korean celebration.
Being retired gives me the flexibility of course to make my schedule. It's easier to book trips to the US or elsewhere (as countries open up from Covid) than it was when I was working. My wife, however, still works and therefore is not as flexible as I am. Owning her own business helps, but she still has to worry about back office details all the time. So, its not like we are both retired, however, we are not tied down to jobs like many people are. We are flexible enough to travel when we want to. So when you retire I think you need to realize that balance is important. You need to balance your retirement plans with your spouse’s plans.
While in the US we visited several cities including New York, New Orleans, and Chicago. Bourbon Street in New Orleans was in full swing. The clubs were open, restaurants were packed (we had to make reservations or stand in line) and people were enjoying themselves---maybe too much. In NYC and Chicago restaurants were open and businesses were starting to re-open again. In Korea, we no longer have to wear masks, worry about quarantine, or be concerned about eating inside a restaurant.
I am hoping to enjoy more of Korea as soon as I get back on my feet so to speak. I still have to wait a few weeks.
A note about the Korean medical system. It’s fantastic! After I injured my foot I went to the emergency room of a local hospital. They immediately x-rayed me, put a cast on my foot, and then the doctor met with me and my wife about my injury. And of course, I was given medicine. All for less than $100. There was a follow-up a week later with more x-rays, a meeting with the doctor before and after the x-rays, and a new cast which cost a similar sum. What got me about the medical services besides the very cheap cost was the speed the services were given. There really was no waiting to see a doctor and no waiting (maybe 15-20 minutes) for the x-rays. I sincerely doubt I could have gotten this kind of attention in the US without a long wait, etc. Now I need to work on my balance.
I am relaxing on the patio of my apartment overlooking the beach. The surfers are out as the waves are rather large for this time of year. Perhaps it is because of a storm in nearby Japan. Anyway, the surf is up and everyone appears to be having a good time.
Though I am relaxing, I’ve been contacted by friends in the legal industry looking to fill in-house positions. I haven’t been that active in the in-house world as of late. But because of old contacts, I do hear things. You would think I would have a list of potential candidates to recommend but of course not really. How many colleagues and acquaintances have stayed in touch with me. Not many. The reason is of course simple, out of sight out of mind.
Once you retire you are no longer seen in the business world. You are no longer seen at seminars or even on the street. Colleagues stop calling. This is natural. It actually takes a little getting used to, as almost everyone who retires drops out of the workforce. Once they do, those still in the workforce stop thinking about them.
What those still working forget, is that their colleagues or friends who have retired still maintain some of their connections. And on occasion, like the situation I currently find myself in, we are asked to provide recommendations if we can. Do I know of potential candidates to fill a senior position?
What I find rather amusing or even perplexing is that a number of colleagues and even those I have mentored over the years have stopped staying in touch once I have retired. Perhaps they figure I am not too interested in their careers anymore. Some of course have stayed in touch and are now benefiting from what contacts I still have. I think people should understand that just because you retire does not mean the connections you have built up over a lifetime goes away automatically. I still hear things.
So for those still working who have mentors or colleagues that have retired I recommend the following:
I find myself enjoying the beach more and more in retirement. I enjoy watching the people walking on the beach and of course enjoying the sound of the waves as they come crashing in. All in all, it is a very pleasant experience. And of course, I expect to continue seeing the beach and enjoying the beach experience. This has created a kind of “normalcy bias” …. the beach has always been pleasant and therefore I expect it will continue to be pleasant. Erudite Risk in its recent DRB risk report has discussed normalcy bias in detail. All risk managers and in-house counsel need to pay attention.
Normalcy bias can be seen as a major reason why so many companies as well as some countries were not prepared for Putin’s invasion. After all, Putin hadn’t invaded Ukraine for a number of years so the odds were that he wouldn’t…despite the signals leading up to the invasion. Normalcy bias can be seen affecting everyone’s perception of many kinds of risks. Yes, geopolitical risk is a major risk that is now looked at perhaps with a greater degree of interest. But financial risk, operational risk, and legal risk among others should also be looked at in a new light. Has normalcy bias affected a company’s perception of the risks it faces? If no one actually thinks risks should be taken too seriously as such risks have never led to a major crisis, have they really taken a hard look at the risks facing the company? Does the risk mitigation strategy really work when everyone’s perception is clouded by normalcy bias?
The Black Swan event may be more likely to happen than people think. In today’s business climate, more and more crises are beginning to happen when a few years ago many never thought they would occur. Everyone was lulled to sleep because of “normalcy bias”. So people tend to lump Black Swan events into risk events they thought would never happen. A kind of normalcy bias has set in, people continue to look at potential risk events as they always looked at them. Nothing happens until of course it does.
But risk events you never thought would happen may very well happen. Just because you look at the past or present a certain way doesn’t mean it will be the same in the future. North Korea hasn’t attacked South Korea in more than 70 years. Many look at the potential of a North Korean attack as nil because they don’t even remember the last invasion. Today, South Korea’s younger generations have no recollection of the post-war years and extreme poverty that many went through following the Korean War. Younger politicians think it is absurd that an attack would occur. But there have been warning signs. North Korea has ramped up its ballistic missile program as well as its nuclear testing. But a kind of normalcy bias or complacency has set in. If an attack occurs, it may catch everyone by surprise. Just look at the Russian invasion of Ukraine.
If you or your organization does business in South Korea or anywhere else in Asia, are you prepared in case there is an invasion or attack on South Korea? What about Taiwan? Or anywhere else in Asia? What plans are in place? Have you really spent time analyzing all the details or have you simply paid lip attention to it because everyone believes it won’t happen? After all, nothing has happened in 70 or 80 years (except for bombings, acts of terrorism and kidnappings, threats, nuclear bomb testing, etc). My advice when it comes to risk mitigation is to plan for every eventuality regardless of how you perceive it. Don’t let normalcy bias set in. This includes:
In essence, don’t let normalcy bias set in. It may be too late to act once the unthinkable happens.
I am currently enjoying the view overlooking the beach from the balcony of my condo in Busan. Everyone is coming out now that the weather is getting warmer. People are enjoying the beach. Boats are everywhere and people are flocking to the pubs lining the beach. Everyone appears to be having a good time. Even though I spend time thinking about my retirement and my upcoming trip to the US, I am caught up in the news surrounding the Russian invasion of Ukraine and the current devastation Russia is inflicting on its neighbor.
What has surprised me about the Russian invasion which should have been foreseen by NATO countries and even the Ukraine prior to the actual invasion (the US intelligence services accurately forecast the invasion several weeks prior to the actual invasion) was that it was missed by almost everyone. Most countries and even companies thought Putin would not invade and when it happened were caught flat-footed. Why? When geopolitical risks are potentially catastrophic, why did the world miss it ? The invasion has resulted not only in increased gas and commodity prices (already increasing), the destruction of the Ukrainian and Russian economies, loss of life, and destruction of property, but serious blows to the multinationals and companies doing business in Russia. And of course, countries are scrambling to find alternative sources of food supply as Russia and Ukraine are major exporters of wheat and fertilizer.
Perhaps one reason for the failure to seriously acknowledge the major geo-political risk faced by many….i.e. the Russian invasion is best described by Erudite Risk in its South Korea DRB Risk Report as “normalcy bias”. People and companies tend to view risks as minor when things seem to be normal. What was true yesterday and is true today will be true tomorrow. If things seemed normal yesterday and still seem normal now they will be normal tomorrow. As Russia did not invade Ukraine since taking Crimea, no one thought Putin would go in. Since Europe seemed to be stable in 1938 the West did not think Hitler would invade Poland and start a World War. Multinationals did not seem to pay attention to geopolitical risks after Crimea. Why would Putin invade Ukraine? Things seemed rather normal one month or two months ago even though there were a few disturbing signs that all was not well.
If companies and governments took a closer look at Putin, his beliefs and his military buildup, geo-political risks in Europe should have taken center stage. But it appears that this was not the case. So, when I think about risk issues facing companies, organizations, and even countries, the major question that should be on everyone's mind is whether or not they have adequately addressed all major geopolitical risks facing them. Are supply chain issues adequately addressed? Are logistics issues addressed? What about sources of supply? And of course, from a contractual and insurance standpoint, are those issues addressed?
For companies doing business in South Korea, the threat of war is always a risk they face. Seoul is not far from the DMZ and any altercation between North and South Korea would have an immediate impact upon Seoul and its surrounding cities. Companies doing business in South Korea not only have many risks to think about such as operational risk, market risk, legal risk, and financial risk but geopolitical risk as well. Therefore, a company contemplating a business project in Korea must at least on a tactical level consider the implications of geopolitical risk as well as everyday market risks. However, I think there is a sense of complacency affecting those doing business on the Korean peninsula. Companies may talk about potential risks but I don’t see a sense of urgency.
Considering recent geopolitical events, many companies should review old risk management policies and procedures, in case of updates, are needed. Of course, some risk management processes that should be reviewed are not being considered as they are viewed as too expensive or impractical. Such is the case with political risk insurance.
Companies face many kinds of risks when engaged in offshore projects; of course, geopolitical risk is one of them. This comes about when a government changes its policy, ideology, or even itself which creates instability, disorder, war, strikes, riots, etc. What must be done to manage such a risk? Political risk insurance comes to mind, but some forms of political risk insurance that are offered by capital –exporting nations ( such as OPIC, etc.) are subject to politically motivated conditions or motivations that may not take the needs of the investor into account. Case in point- OPIC can only operate in countries that have a bilateral investment treaty with the US. If you are a US investor trying to invest in a country that lacks a bilateral investment treaty with the US- you are out of luck when trying to obtain political risk insurance from OPIC. This is true of outer countries which supply similar political risk insurance through export development programs. For more on political risk see my previous blog: “Managing Political Risk” at Seoullegalriskmgmt.com.
I was recently in Seoul. While hanging out in my favorite coffee shop in Itaewon after a few meetings I started to think about retirement, current events, and what my friends in Seoul are up to. I still like to meet up with friends and former colleagues if possible though sometimes meetings keep me busier than expected.
One of the lessons of retirement is that the company or organization you worked hard for and perhaps stayed up at night worrying about still goes on without you. Friends and colleagues may be happy to meet you (or maybe not) but at the end of the meeting they go back to work- without you! It may be hard to adjust to the fact you are no longer relevant to the company you worked for and some of your colleagues may no longer even think about you. In fact, what you think or do no longer matters to the company.
I am trying to figure out what to do next as I may live another 25-30 years. Obviously, my legal career is basically over. It really hit me when I had my 40th law school reunion on Zoom. 40 years of practicing law, working for companies and law firms. Though some of my classmates still work, some like me have retired or left the practice of law altogether. Many are no longer working. Like me, they get to practice their golf swing! I also get to work on my Korean.
Though I miss the practice of law sometimes, I do not miss trying to bring in business, filling out timesheets, or attending client meetings in which the client expected me to pull a rabbit out of a hat. It was draining to have people always approach me with legal questions on the street or at cocktail parties (expecting free legal advice) even though many of the questions covered topics I was not well versed in nor interested in.
Now I get to reflect on my passions and what I want to do. Remember, one of the lessons of retirement is the fact you are now in a different stage of life. The past is the past. Companies you worked for are no longer interested in you. Nor do they care what you think. You have to think about the next steps on your own.
What do you want to do?
With covid restrictions tightening around Asia because of the Omicron Covid variant, some businesses are finding themselves stuck in limbo instead of getting back to quasi-normal. Hopefully, the Omnicron variant will not be as serious as first thought and people can get slowly back to normality. Omnicron of course is not the only risk that Asia and the world faces. A few days ago, people were enjoying the beach here in Busan where I live, the coffee shops were packed, including the one on the beach where I usually write, restaurants were busy and people were enjoying themselves. Even the baseball stadiums were packed. Then came Omicron. But also other risks too. With business increasing in parts of Asia, the Supply Chain itself had been stretched thin. Supply risks emerged. Other risks also began to surface such as the current semi-conductor chip shortage. Inflation is beginning to rear its ugly head (inflation in Korea is at the highest rate since 2012) and other major areas of risk such as employment, geo-political and currency-related risks are once again knocking on the door. So if you are doing business in Asia or thinking about doing business in Asia you must identify the risks.
As the world scrambles to try and normalize, Asia- the world’s primary source of manufacturing, is fraught with many areas of risk. Companies seeking to do business in Asia, whether Korea, Japan, China, Vietnam, or elsewhere, have to be very careful when it comes to risk. Besides Covid, operational, financial, legal, geopolitical, and environmental-related risks are all major areas of concern. Cyber-related risks are also increasing as they are in other parts of the world. As companies and countries start to address Covid related lockdowns, it is very apparent that companies must consider a multitude of risks. In fact, companies must be laser-focused on managing the many areas of risk, especially in Asia.
Obviously, risk management companies are a good resource for companies to use when managing risk. Other resources exist too, such as risk reports which identify risks on a regular basis.
One such report or report that is specifically focused on countries in Asia as well as Southeast Asia generally, happens to be Erudite Risk’s Daily Risk Briefing (DRB) Reports for Asian countries including Korea, Japan, Vietnam, China, and others. Erudite’s risk reports monitor intelligence in 12 countries across Asia and collect data from over 1000 sources on a daily basis. I highly recommend this report for those doing business in Asia whether it is Northeast Asia, Southeast Asia, or Asia as a whole. It is the most comprehensive risk-related report I have read that provides daily updates in a country-specific or regional manner. You can find out more at Erudite’s website- www.eruditerisk.com or for a sample go to the South Korean daily risk report page at the following link:
https://www.erudite.com/drb-intelligence/South%20Korea
