Samsung chief uses global e-mail to shake things up

As he has done in the past, Samsung Chairman Lee Kun-hee once again has aroused a sense of “crisis” at Korea’s top conglomerate, this time in an e-mail message to his employees yesterday celebrating the 20th anniversary of his “new management” declaration.

“Today, we are again faced with a new wave of great change,” he said in the e-mail, “Barriers no longer exist between individuals, organizations or companies. We live in an era that encourages active competition and collaboration. An era where a single idea can change the world. As we move forward, we must resist complacency and thoughts of being good enough, as these will prevent us from becoming better. Samsung’s New Management must start anew to reach loftier goals and ideals.”

It was the first time the 71-year-old chairman sent an e-mail to Samsung’s 357,000 employees around the world. The message was transmitted in Korean, English, Chinese and Japanese.

On June 7, 1993, Lee, in front of Samsung executives on a business trip to Frankfurt, famously ordered them to “change everything except wife and children” - the so-called “Frankfurt declaration” that is widely credited with creating the momentum that propelled Samsung to its current status.

In his message, Lee recalled that “20 years ago, we faced a grim reality full of risks and challenges.” In 1993, his seventh year at the helm of the group after succeeding his father, Lee spotted Samsung Electronics TVs with dust on them in a corner at a BestBuy store in Los Angeles. That awakened him to the reality that although Samsung was in a battle for the No. 1 spot with LG Electronics in the domestic market, its global position was deplorably bad.

So he summoned executives to Frankfurt, telling them: “Unless we change in this globalization era, you will remain a second or 2.5 player perpetually.”

In the e-mail, Lee also said Samsung fostered competitiveness by boldly abolishing the old thoughts, system and convention, and it converted quantity-centered thoughts and behavior into a quality-centered one.

Samsung’s sales revenue, which stood at 32.6 billion won ($29.2 million) in 1993, increased nearly eightfold to 41 trillion won last year, and the operating profit grew by 60 times over the same period to 30 trillion won.

The chairman, this time, has added “products, services, dignity and value” to quality. “We must create an environment of ingenuity, where autonomy and creativity abound, in an organization that is not afraid to fail and is ready to tackle new challenges. Let us be open-minded and bring together our creative abilities.”

By Seo Ji-eun [spring@joongang.co.kr]