Challenges for Jay Y. LeeOct. 27, 2016 could be another turning point for the founding family of Samsung Group. Jay Y. Lee became a registered member on the board of Samsung Electronics to take full responsibility over management affairs in the country’s top company two and a half years after his father was hospitalized. The heir can no longer hide behind the Samsung name. He now has to attend the shareholders’ meeting and must answer to each shareholder as well as the board.
Every move will be watched. It is why members of the family-run corporate dynasties do not want to register themselves on boards. But the younger Lee made the right choice to officially represent the Samsung empire. He has a lot to do as the new head of the country’s largest conglomerate. He must first address the crisis with Galaxy Note7. The ad hoc shareholders’ meeting was a good place. He could have made a sincere apology to the public and persuaded the investors with new and reliable corporate vision. But he did not show up to the meeting.
The recall and discontinuation of the Galaxy Note7 may not be a big affair. The flop happened because the smartphone maker strived to stay at the top. iPhone awed consumers with the experience with its unique software culture, while Note7 had been a phenomenon as a hardware device. Although short-lived, Note7 had shown consumers what Samsung was capable of doing. He must assure shareholders that the company has a solid future.
It is not easy to change the business and governance structure. Lee must decide if the company would pursue a new field or go on with its strong areas of chip- and smartphone-making. Whatever it does, it would have to incorporate the Internet of Things and sphere of the fourth industrial revolution. In the era of the fourth industrial revolution, traditional company could disappear and make way for an enterprise with entirely new concept.
Lee must decide if the next step is to ascend to chairmanship or leave management affairs to a chief executive to run Samsung Electronics.
Samsung Group has long dominated the Korean economy. A stumble by the conglomerate that accounts for 20 percent of the country’s exports with sales of 300 trillion won ($262.1 billion) can shake the entire economy. It is why the public closely watches the new heir to the corporate empire with both expectations and concerns. I would like to pose three questions to the vice chairman.
First, can Samsung maintain its lead over China? Before the elder Lee fell ill, he confidently said he was not afraid of China. When asked why, he said there was no “genuine entrepreneur” in China. In other words, he had been confident that there had not been a better entrepreneur than him in China. That was five years ago. He may not be able to confidently say so now. The younger Lee must be able to answer the same question on his father’s behalf.
Second, I want to ask him his strategy for the future. His father shared his fortune with his employees. He generously rewarded his people in the research and development, management and secretariat. Some became billionaires as a result. He was not the typical chaebol owner. The best talents, therefore, chose Samsung and worked for the company day and night. The younger Lee must do more. He must share the fruits with his nation and the global community. It is what the new age demands.
Third, he must cut out an iconic identity for himself. His father has done that. He demanded his employees change everything except their family. He said one talent can earn bread for millions. He delivered a strong message to his employees.
The new leader must concentrate on vision and message. If he can do better than his father, he can make history again for Samsung. His father succeeded a 14 trillion won company and built it to a conglomerate worth more than 300 trillion won. If the younger Lee can do more, he would make history for the Korean and international community.
JoongAng Ilbo, Oct. 27, Page 34
*The author is an editorial writer of the JoongAng Ilbo.