Lee’s Legacy and Samsung’s Challenge

The late Samsung Group Chairman Lee Kun-hee was an asset not only to Samsung, but to Korea and the world. He was undoubtedly a first-rate businessman who pioneered not merely a company, but an entire market. He was a visionary leader and innovator. His remarkable achievements elevated Korean business and challenged it to meet the highest global standards.

It was in 1987, after his father’s passing, that Lee assumed the chairmanship of Samsung. Upon taking the position, he announced his vision of making Samsung a global enterprise. At the time, few thought this vision realistic, especially coming from a young manager who had just inherited his father’s business, and in a developing country in the Far East at that.

To the surprise of many, Samsung under Lee’s leadership achieved extraordinary results. Sales increased 34-fold, assets 70-fold, exports 25-fold, and market value 350-fold. Not to mention that the Samsung brand is now firmly ranked among the global top 10. Without question, he fulfilled his promise to make Samsung a global business and a household name not only in Korea but around the world.

Such success was possible only through the introduction and establishment of the advanced management system Lee pursued. His determination to foster a corporate culture that welcomed and valued challenges also played a major role. Under his leadership, Samsung grew not only externally but internally as well, becoming a truly global enterprise.

He always feared that Samsung might fall behind, and he demanded that executives and employees remain vigilant at all times in order to drive innovation forward. He felt the weight of his promise to the company and its employees to make Samsung the very best. This acute sense of crisis propelled Samsung forward and kept both Lee and the company focused on moving in the right direction.

His call for innovation in Frankfurt in June 1993 still resonates today: “Change everything except your wife and children.” Even now, people remember that quote as a defining moment in Samsung’s push for innovation and its sense of urgency.

He did not hesitate to use shock tactics for the good of the company. One clear example of Lee’s progressive management style was his order to burn 150,000 defective mobile phones. Changes to working hours and lifestyle were also used to persuade and motivate people within Samsung to become more committed to innovation and change.

Success in the semiconductor and mobile phone businesses required more than hard work; it required precision and sharp vigilance. Samsung’s position in the global electronics market could only be established through the level of awareness and urgency Lee sought to instill throughout the company.

Lee’s business and management acumen was especially evident in his determination to acquire Korea Semiconductor when it was on the verge of bankruptcy. Few would have dared enter the semiconductor market, which was already dominated by Japanese firms.

Samsung’s current presence in the electronics market would have been hard to imagine in its early days. One Japanese corporate research institute even published a report titled, “Why Samsung Cannot Succeed in the Semiconductor Business.”

Lee’s insight turned the impossible into reality—indeed, into excellence. Today, everyone recognizes Samsung as a household name in electronics. After establishing a foothold in semiconductors, Lee turned his attention to mobile phones.

He foresaw a future in which every individual would own a mobile phone. In August 1995, Samsung’s mobile phone brand Anycall came to dominate the Korean market. Because of Samsung, Korea became the only country where Motorola failed to capture the top market position.

It is undeniable that despite the success and contributions Samsung and Lee made to the market and society, Samsung often came under criticism amid political turmoil. Now, in Lee’s absence, Samsung faces significant political risk and scrutiny. Intense political pressure is preventing Vice Chairman Lee Jae-yong from fully concentrating on Samsung’s business affairs.

Truly, this is a difficult and challenging time for Samsung under adverse circumstances. There is little room for innovation and change, while political demands and intervention are rampant. What is needed at this critical moment of threat is even greater leadership and insight. By overcoming the obstacles before it, Samsung should be able to prove Chairman Lee’s legacy—that what he built can withstand the tests and challenges of time.

Sung-no Choi is president of the Center for Free Enterprise.

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Original title: Lee's legacy and challenge for Samsung

Author: Sung-no Choi

Date: 2020-11-25

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=23279