Samsung’s crisis culture – a driver and a drawback – The Economic Times on Mobile–a-driver-and-a-drawback/articleshow/16232076.cms

Samsung’s crisis culture – a driver and a drawback

SEOUL: In his 1997 book, Samsung Chairman Lee Kun-hee wrote that a successful company needs a “heightened sense of crisis”, so that it always looks ahead even when it’s doing well, and needs to be able to respond to change.

It’s a credo that has driven Samsung Electronics to become the world’s biggest technology firm by revenue – it sells more televisions, smartphones and memory chips than anyone else – and makes the group a must-visit case study for a stream of Chinese firms seeking to tap the secrets of Korean success.

But, in the wake of last month’s damaging US patent ruling, which Samsung has said it will appeal – the Korean group was fined more than $1 billion after a jury found it had copied key features of Apple Inc’s iPhone – the group’s top-down command structure and decision-making process are blamed for stifling creativity.

What’s been good for getting things done quickly, such as making bold decisions on big investments in chips and display screens, may not now best suit a company that needs to shift from being a ‘fast follower’ – quick to match others’ products – to an innovator.

Within Samsung, where some designers feel overlooked and undermined, there are calls for a change of tack.

The ‘constant crisis’ has worked well, helping Samsung overtake Japanese technology brands Sony, Sharp and Panasonic in chips, TVs and displays, end Nokia’s decade-long supremacy in handsets and overtake Apple in smartphones.

But that has come with a big reputational hit – that Samsung makes knock-off products.


“It’s a crisis of design,” JK Shin, head of Samsung’s mobile division told staff in February 2010 as Samsung worked on its first Galaxy phone in a panicky response to the iPhone’s smash-hit debut, according to an internal memo filed to a US court as part of Apple’s lawsuit.

“Influential figures outside the company come across the iPhone, and they point out that ‘Samsung is dozing off.’

“All this time, we’ve been paying all our attention to Nokia, and concentrated our efforts on things like ‘folder’, ‘bar’, ‘slide,’ yet when our UX (user experience) is compared to the unexpected competitor Apple’s iPhone, the difference is truly that of Heaven and Earth.”

The sense of crisis and urgency to catch Apple drove Samsung designers and engineers to opt for a concept that best matched the look and feel of the iPhone, according to one Samsung designer, who isn’t authorized to talk to the media and didn’t want to be identified.

“Designers have lots of unique and creative ideas, but these have to be loved by the top decision-makers. The problem was, because they were so fascinated by the Apple design, these ideas weren’t really satisfactory to please the top level,” said the designer.

“I think elsewhere top managers respect their chief designer’s decision, but at Samsung, they overrule designers and have the final say about what design we go with. That limits our capability. To be better than a good fast follower, Samsung needs a more horizontal culture and to empower designers.”

Warm Regards / Ganesh Srinivasan

Sent from my iOS device

An Ardent Apple Fan –

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About Ganesh Srinivasan Consulting

Management Consultant from India with International Solutions Selling, Projects Implementation, Joint Venture, Collaboration and Procurement experience Building a Global Team of Consultants and Niche Products and Services

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