'No. 1 Samsung that has changed the world'

“Not a single product with defect should be allowed. Throw them all,” Samsung Group chairman Lee Kun-hee said at a hotel in Baden-Baden, Germany in June 1993 while having teatime with executives.

Upon watching on the company’s in-house TV network, he got furious as he saw a factory employee carve the defective lid of a washing machine with knife before assembling. When his chief of staff said, “We understand what you mean, but production workers have many difficulties,” Chairman Lee expressed anger and shouted, “How come you don’t understand what I mean!” Lee reportedly put down his teaspoon so hard that the sound of breaking plate was heard.

Chairman Lee Kun-hee made declaration of his iconic “new management” principle, which urges “Let’s change everything except your wife and children.” Travelling from Los Angeles to Tokyo and to Frankfurt for 68 days in 1993, he established a sense of discipline in more than 1,800 executives and employees. What he emphasized repeatedly was quality management and the No. 1 principle. Even when no one predicted the Asian financial crisis would occur four years later, Samsung overcame the crisis by banking on “new management” to emerge as one of the strongest companies in the world.

In an industry wherein technology evolves rapidly, a top manager as the owner who can make prompt and bold decisions is better than a hired CEO who tends to focus on short-term earnings. This is evidenced by the successful takeover of Toshiba’s memory chip business by a South Korea-U.S.-Japan consortium including SK Hynix. While contenders constantly changed among competing bidders including Toshiba’s renegotiations with U.S. and Taiwanese companies, the takeover bid was a do-or-die deal that would have been impossible to strike were it not for SK Chairman Chey Tae-won’s bold decision. His all-out bet as suggested by his belief in “where there's a will, there's a way” has finally borne fruit.

Forbes has singled out Samsung as the first among the top five Asian companies that have changed the world over the past 100 years. Samsung came before Toyota and Sony of Japan and Alibaba of China. The semiconductor and automobile industries, which are the pillars of the Korean economy, would not have emerged without the entrepreneurship of the owners who constantly challenge, their long-term vision, and bold investment decisions. However competent staffs are, the final decision has to be made by the owner. It would be a loss to the entire nation if the owner is held in custody at a critical moment when he is supposed to be at work.