In June 1993, a young and ambitious Lee Kun-hee, chairman of Samsung Group, gathered his top executives in a hotel in Frankfurt. The company faced a dire situation where Samsung was lagging behind its Japanese and American counterparts. As a last resort, Lee delivered a radical directive, “Change everything except your wife and children.” This meeting marked the birth of the new Samsung, from a second-rate electronics company to a global tech giant.
Under Lee’s leadership, Samsung evolved into a company synonymous with innovation, quality, and design. As a result, by 2014, Samsung had become the world’s largest smartphone manufacturer, capturing 31% of the global smartphone market.
The “Burn The Phones” Incident
When Lee discovered that Samsung devices weren’t living up to people’s expectations in terms of the quality of the device, he didn’t mince words or hold a meeting. While making a bold statement, Lee ordered $50 million worth of phones and other electronics and burned them in front of his employees in a factory in South Korea. This over-the-top demonstration perfectly showcased Lee’s obsession with quality over quantity. The incident brought about a cultural shift in the company, and the company started producing products that would sometimes be even better in quality compared to their competitors like Sony and Nokia. As a result, by 2005, Samsung surpassed Sony in the global electronics market.
Lessons to Learn: Leaders must be willing to take bold, symbolic actions to shift organisational mindsets. The culture of your company is in your hands.
Building Samsung Semiconductor
There was a time when the global semiconductor industry only had two major players: America and Japan. However, Samsung understood the importance of semiconductors. The company entered the market in 1983. The competition from Japanese technology and America’s dominance proved too much. Still, Lee kept pressing forward, focusing on vertical integration and making massive investments in cutting-edge research. This resulted in Samsung becoming the world’s largest memory chip producer. This decision to enter the semiconductor market proved vital for Samsung as in 2013, 56% of the company’s revenue came from the semiconductor business.
Lessons to Learn: Leaders must anticipate future trends and invest strategically, even in the face of scepticism.
The “Second Foundation” Strategy
After Lee Kun-hee took charge of the company, he declared 1987 as the second foundation year of the company and completely overhauled the operations of Samsung. He identified design, quality, and brand as the critical focus areas. Samsung poured money into this initiative and hired top talent, including world-renowned designers and executives from competitors like Apple. As a result, by 1999, Samsung had rebranded itself as a premium brand. They also launched many innovative products like the thinnest TV at the time, and they also Launched the first phone with a multiplayer. Today, Samsung spends $10 billion to drive innovation and R&D.
Lesson to Learn: A leader should always be ready to start from scratch to drive innovation.
A New Galaxy at Horizon
In 2007, Apple launched its iPhone 1, which brought about a revolution in the global consumer electronics market. Samsung was quick to respond and launched its Galaxy series of smartphones. Lee ensured that Samsung leveraged its vertical integration capabilities to outclass its competitors regarding hardware potency. The Samsung Galaxy S2, launched in 2011, became a global best-seller, and by 2013, Samsung had sold more smartphones than any other company in the world. This was the most revolutionary decision by Lee Kun-hee because, in 2018, Samsung earned around $214 billion in revenue from its smartphone business and by 2020, 40% of Samsung’s sales came from its smartphone division.
Lessons to Learn: Leaders must maintain agility and adapt swiftly to market disruptions using their existing infrastructure.
Crisis Management During the Asian Financial Crisis (1997)
The Asian Financial Crisis in 1997 hit the global electronic market like a wrecking ball, and Samsung wasn’t immune to it. As a result, Lee Kun-hee implemented rigorous cost-cutting measures, sold off non-core businesses and emphasised high profit and Sasmsung’s core competencies. What this means is that while many of its competitors were struggling to make ends meet, Samsung was gaining market share even in times of uncertainty. Its ability to adapt sets it apart from other Korean and Asian brands. Ever since then, Samsung has been the cornerstone of Korean and Asian tech conglomerates.
Lessons to Learn: During crises, leaders must focus on resilience, streamline operations, and double down on core competencies.
The Legacy of Lee Kun-hee
Under Lee Kee-hun, Samsung’s annual revenue grew from less than $10 billion in 1987 to more than $300 billion in 2014. His strategic foresight, obsession with quality, and ability to galvanise cultural change redefined Samsung and the global tech industry. As he often said, “The biggest asset of a company is its people.” By fostering innovation, nurturing talent and demanding nothing but excellence, Lee Kun-hee built an empire that continues to lead today. Lee Kun-hee’s journey serves as a masterclass in strategic leadership, inspiring leaders to think big, act boldly, and lead with vision.
