"The Samsung Way: Transformational Management Strategies from the World Leader in Innovation and Design" by Jaeyong Song and Kyungmook Lee
One-paragraph review: "The Samsung Way" is a necessary book. Given the broad impact of large companies on our world, every one of them should be examined in at least one book (if not many). And the Samsung story is not only the narrative of an individual company's development into a behemoth, but also a cross-sectional report on the South Korean semi-managed economy. This should not be a reader's first book on production or management processes -- read the books about Toyota and Honda first -- but it is worth including in the canon. The writing itself isn't as fluid as it could be; it's not fair to call it laborious, but reading "The Samsung Way" takes some concentration. It also contains some inconsistencies, particularly in trying to identify one solitary cause of the company's success. Broadly, though, the Samsung strategy reported in this book is one that depends upon (a) quick, resolute decision-making; (b) an internal sense of crisis, even in good times; (c) an intentional blend of capabilities developed internally and dependence on outside suppliers; (d) a sustained focus on learning; and (e) a high priority on the placement of top-tier talent. "The Samsung Way" isn't the easiest business book one will ever read, but it contains enough material insights to make the payoff worthwhile.
Verdict: A necessary profile of a company that has evolved dramatically in modern times
- For Samsung, speed is a strategy in and of itself.
- Samsung may seem similar to GE in that it owns many businesses that perform well in global markets, but it differs in that its achievements were accomplished through greenfield investment rather than through mergers and acquisitions.
- American companies also tend to outsource manufacturing or move it abroad, with the result that their core competencies are soft capabilities or intangible assets such as technological innovation, brand marketing capabilities, and design capabilities.
- Chairman Lee believed that hiring talented people to produce inferior goods would be a profound loss to society.
- "Is the quality of our phones still so low? Aren't you afraid of what our customers might think? How can you take their money and sell them defective phones?"
- When that vision was achieved and Samsung was at the pinnacle in various business areas, the chairman said, "Find new businesses, since all of our businesses could disappear in 10 years." That directive has triggered another wave of outsized investments.
- Samsung's success has been its ability to pinpoint ventures with huge earnings potential, then invest decisively in them.
- Core talent refers to people who can move their industry to the global top three or top five.
- "We may slip into a crisis at any time if we are complacent about today's good performance. We need to prepare ourselves for five to ten years ahead."
- [T]he majority of Samsung executives that the authors have interviewed over the last 10 years point to synergy resulting from interaffiliate cooperation as the key factor that differentiates Samsung from its competitors.
- Samsung recognizes that synergy -- created through the convergence of its major products and business lines -- is its main core competency.
- When it was difficult to purchase or license advanced technologies, Samsung was willing to offer domestic and foreign engineers generous employment terms to develop these technologies internally.
- Samsung has a firm purchasing guideline saying that more than 30 percent of parts and materials must come from external suppliers so that the company's affiliates can stay attuned to industry trends.
- There is a saying at Samsung that "managing is education and learning," reflecting the depths of Samsung's commitment to learning from its competitors.