Talent, design lead Samsung's success
Kevin Lane Keller from Tuck School of Business, Dartmouth College, the United States, delivers a keynote speech during a forum organized to highlight the success of Samsung Group over the past two decades since chairman Lee Kun-hee declared his “New Management” philosophy in 1993, at The K-Hotel in southern Seoul, Thursday. / Courtesy of Samsung Group
Experts advise technology giant to focus more on marketing
By Kim Yoo-chul
Patrick M. Wright
Hiroshi Katayama
Talent management and design innovation are two core elements that have spurred Samsung’s successful transformation into a global player over the past two decades, according to global business experts, Thursday.
They pointed out that Samsung’s future depends upon how it will improve marketing strategies and combine a new breed of software and hardware.
Such analysis came at an International Forum billed as “Twenty years of Samsung’s New Management” organized by The Korean Academic Society of Business Administration at The K-Hotel, southern Seoul.
Under the slogan “New Management,” Samsung Electronics Chairman Lee Kun-hee declared his goal in Frankfurt, Germany, in 1993, of shifting toward quality-focused growth not quantity-highlighted expansion. Lee then ordered employees to change everything but their wives and children.
“Samsung was a true transformer over the last 20 years in a very positive way. Its business transformation is a model for all modern multinationals and the transformation well illustrates the competitive advantage that form a strong link between business strategy and people strategy,” said Patrick M. Wright, bicentennial chair of the Darla Moore School of Business at the University of South Carolina, during the forum.
He cited talent assessment and review programs as one crucial part behind Samsung’s success.
“Samsung’s transformation has had people at the center. The human resources function at Samsung has played a critical role in enabling this transformation. The human resources system has developed to enable the transformation of the New Management that has constantly evolved to meet new challenges and achieve new objectives,” Wright said.
The scholar said that New Management was supported by strategy execution by top Samsung management.
“New human capital pools require new and different ways of attracting, developing, motivating and retaining those people. This requires human resources functions to design, develop and deliver human resources system and processes.”
“Samsung lets the core talent set the business goal rather than simply implementing the given goal. This creates more buy-ins, and makes the objectives more directly relevant to the situation,” the global human resources expert analyzed.
Amid the industry’s massive shift toward software, Samsung’s human resources head Won Ki-chan told The Korea Times that it has 36,000 software resources, globally, and added the firm is going to hire more, although the Samsung executive declined to elaborate further.
New Management also awakened the corporate for the importance of fine-tuned marketing strategies, said a marketing expert in the United States.
Kevin Lane Keller from Tuck School of Business, Dartmouth College, the United States, has given six marketing imperatives for better understanding of Samsung’s success story.
“Samsung puts a lot to design. Actually, it has a strong design philosophy. Samsung has developed creative ad campaigns, strong in-store programs and high-profile sponsorships,” said Keller, who is an international leader in the study of brands, branding and strategic brand management.
Emphasizing its consistency to launch new products to the time-to-markets, Keller said Samsung Electronics has been consistent in maximizing long-term growth by entering new markets. “This is the importance of innovation and relevance,” he said.
“Samsung has taken a big picture view of marketing effects and knew what’s working. It’s been achieving greater accountability for marketing investments in brands. Samsung was launching very clever marketing campaigns. Advertizing was another factor that lifted Samsung over the two decades.”
In 1993, Samsung was just a small supplier that sold cheap home appliances and handsets. Now, it is the world’s biggest technology firm by revenue, and a leading brand consultancy, InterBrand, ranked it as the ninth global brand in 2012.
Challenges
Keller advised Samsung to improve marketing, further, in a highly-competitive consumer electronics market.
“Be a leader, tap even more into emotions and manage brand architecture carefully,” he said.
“Yes, this is a challenge. But Samsung overcame Sony and Apple and now has achieved firm leadership. Leadership isn’t something that shouldn’t be earned in a single day. But Samsung must keep being innovative and relevant,” he stressed.
According to the professor, Samsung must be confident in communications and bold in action, while the company needs to cultivate yearning to purchase and pride of ownership.
“My final advice is that Samsung needs to recognize the pros and cons of flagship products. Keep it simple and clear.”
Hiroshi Katayama, professor at Waseda University in Japan, has pointed out that the future of Samsung’s next decades will be dependent upon how it advances its supply chain management system and how the company will develop and implement effective transfer methods in between sites, business functions, business divisions and industries.
Kenn Allen, president at the Civil Society Consulting Group, has urged Samsung to show more willingness toward corporate citizenship-related programs, internationally, so long as to be recognized as a true global leader.
“Primary investment for corporate citizenship programs is in Korea, thus limiting global impact internally and externally. Corporate volunteering needs to be valued more,” Allen said.