In February 1993, 5 years after taking on from his father at South Korea’s Samsung Group, 51-year-old Lee Kun-hee was annoyed that he wasn’t making his mark.
He summoned a group of Samsung Electronics executives to a Best Buy retailer in Los Angeles for a actuality test on the Samsung model. Covered in mud, a Samsung TV set sat on a nook shelf with a price ticket almost $100 cheaper than a rival Sony Corp mannequin.
After a tense nine-hour follow-up assembly, Lee kickstarted a strategic shift at Samsung, to realize market share by high quality, not amount.
Lee, who died aged 78 on Sunday after being hospitalised for a coronary heart assault in 2014, was pushed by a fixed sense of disaster, which he instilled in his management groups to drive change and battle complacency. In the mid-Nineties, Lee personally recalled round $50 million value of poor high quality cell phones and fax machines, and set hearth to them.
This deal with disaster, and his usually abrasive method, helped Lee develop his father Lee Byung-chull’s noodle buying and selling enterprise into a sprawling enterprise empire with property value 424 trillion gained ($375 billion) as of May 2020 in dozens of associates stretching from electronics and insurance coverage to shipbuilding and building.
Samsung Electronics developed from a second-tier TV maker to the world’s greatest expertise agency by income – seeing off Japanese manufacturers Sony, Sharp Corp, and Panasonic Corp in chips, TVs, and shows; ending Nokia Oyj’s handset supremacy; and beating Apple Inc in smartphones.
In a 1997 essay, Lee recalled his frustration at administration inertia. “The external business environment was not good … but there was no sense of anxiety within the organization, and everyone appeared to be eaten up with self-conceit … I needed to tighten them up a bit and repeatedly reminded managers of the need to have the sense of crisis.”
In 2013, Forbes named Lee because the second strongest South Korean, ranked solely behind United Nations Secretary-General Ban Ki-moon.
Four months after the Los Angeles assembly, Lee known as his lieutenants to a Frankfurt lodge convention room, the place he laid out his “New Management” plan, exhorting executives to “change everything except your wife and children.”
Executive conferences proved brutal, usually stretching to 10 hours, with members afraid to even drink water as they didn’t need to should interrupt Lee’s circulation by visiting the washroom.
Lee’s enterprise acumen made him the article of countless fascination and hypothesis in Korea, however he and the empire he built have additionally been vilified by critics and activist shareholders for wielding such financial clout, hierarchical and opaque governance, and doubtful transfers of the household wealth.
In 2008, Lee was accused of managing a political slush fund and of serving to his kids purchase Samsung firm shares on a budget. Prosecutors did not show both cost, however Lee was convicted of tax evasion and embezzlement. He apologized and stepped down, solely to return inside two years following a presidential pardon.
He had since stored a decrease profile and delegated to a military of managers, whereas selling his son, Jay Y. Lee, to vice chairman, a grooming publish for the eventual switch of energy.
As his well being deteriorated, Lee wanted assist in strolling and was inclined to respiratory illnesses following lung most cancers therapy, he was a much less frequent presence at Samsung’s headquarters, spending lengthy winter holidays in Japan or Hawaii.
But his maintain over the group remained undimmed. Whenever he travelled abroad, at the very least 4 of Samsung’s prime executives, together with firm crew and safety, could be on the airport to see him off.
At Samsung’s human assets improvement centre, the tens of 1000’s of staff attending coaching classes pay a silent vigil to a mock-up of the drab Frankfurt lodge convention room, with furnishings specifically imported from Germany. As most of Samsung’s employees are of their 20s and 30s and didn’t expertise Lee’s managerial heyday first-hand, this homage serves to remind them of the necessity to “think crisis”,a number of individuals who have been skilled on the middle stated.
Lee was born in 1942 within the southern Korean village of Uiryeong, the third son of Samsung’s founder. He was despatched to Japan on the age of 11, simply after the Korean conflict ended. His father needed his sons to find out how Japan was rebuilding from the ashes of World War II.
He has admitted to being a loner and located it robust to make mates when he returned residence to a nation riven with anti-Japanese sentiment. He went again to Japan to check economics at Waseda University, after which enterprise administration at George Washington University within the United States.
His early publicity to Japan’s superior expertise led him to ascertain the premise of Samsung Electronics by forming alliances with the likes of Sanyo, and adopting chip making and TV manufacturing applied sciences.
Lee started his Samsung profession in broadcasting, working his manner as much as group chairman by 1987, breaking with the standard Confucian follow of the eldest son taking on the reins. His older brother, Lee Maeng-hee, was initially chosen to guide Samsung in 1967 when his father retired, however his aggressive administration fashion induced friction with the founder’s confidants, in keeping with a number of books about Samsung.
The second son, Lee Chang-hee, severed household ties by telling the presidential workplace that his father had a $1 million slush fund abroad.
Lee senior exiled Chang-hee to the United States and returned as chairman himself. In 1976, recognized with most cancers, he handed the enterprise all the way down to Kun-hee. Chang-hee died in 1991.
Kun-hee’s hunched posture, resulting from a site visitors accident, delicate voice, spherical eyes and infrequently bemused expression have been atypical for such a highly effective character. Married to Hong Ra-hee, who runs a Samsung affiliated artwork gallery known as the Leeum – a mixture of Lee and museum – Lee had a son and three daughters.
His youngest daughter died in New York in 2005, which Samsung stated at a automotive accident however media studies stated was a suicide.
Lee had been a member of the International Olympic Committee between 1996 and 2017.