THE DESIGN POWERHOUSE

Samsung’s amazing transformation

BY Jayashantha Jayawardhana

Prior to 1996, Samsung – the multinational industry and consumer electronics giant we know it to be today – used to be only a major manufacturer of inexpensive imitative electronics for other companies.

Unsurprisingly for Samsung’s leadership at the time, speed, scale and reliability mattered above all as it served the requirements dictated to them by the original equipment manufacturers (OEMs). Accordingly, it used to engineer products to fit the prescribed price and performance requirements.

At the end of the process, its designers would skin the product to make it look nice. The handful of designers employed by the company were scattered in engineering and new product units, and individual designers followed the methods they preferred or were accustomed to.

In a company that prioritised efficiency and engineering rigour above design, its designers had little influence.

Then things changed…

The legendary South Korean industrialist Lee Kun-hee – son of the founder of the Samsung Group Lee Byung-chul – who took the helm as chairman in 1987 became frustrated by the company’s lack of innovation.

Believing that design will be the ultimate battleground for global competition in the 21st century, he resolved to build a design focussed culture that would catalyse world-class innovation.

The first spark that ignited this massive transformation was a report by a consultant on Samsung’s innovation deficiencies, which prompted Lee to envision the company’s future as a design powerhouse.

Back in 1993, he had embarked on an initiative to incorporate Western practices on strategy, HR, merit pay and design into the conglomerate but was dissatisfied with the progress. However, this dissatisfaction catalysed Lee’s resolve to transform Samsung into the design powerhouse it rose to.

Even though Samsung could have hired first-rate design expertise, a number of senior managers persuaded Lee to nurture internal designers who would focus on the company’s long-term interests rather than their own projects. In hindsight, Samsung’s decision to inculcate and nurture in-house design expertise was as momentous as Lee’s unwavering strategic resolve.

Samsung brought in top academics from a well-known art college and developed three training programmes as part of its investment in cultivating company-wide design capabilities.

One programme trained in-house designers, taking them away from their jobs for as long as two years. The other two were college and graduate level school and an internship programmes. Lee made these programmes a personal priority.

Developing in-house expertise helped mould a group of designers who would take a holistic view.

Coauthors of the article ‘How Samsung Became a Design Powerhouse’ in the Harvard Business Review (HBR), Youngjin Yoo and Kyungmook Kim quote Samsung’s former vice president of design strategy Yongil An as saying: “When we had our own place in the organisation, we started caring about the future of the company.”

The designers also developed a capacity for strategic thinking and a tenacity that enabled them to withstand resistance in the long run. It seems improbable that any group of external designers, no matter how competent they were, would have been able to accomplish what they did – even with backing from the chairman.

These committed and resourceful designers (amounting to more than 1,600 at the time the HBR article was authored) found that they could deploy the same tools they use in pursuing innovation – i.e. empathy, visualisation and experimentation – in the marketplace to manage conflicts and overcome internal resistance.

The company’s innovation process now begins with research conducted by multidisciplinary teams of designers, engineers, marketers, ethnographers, musicians and writers who search for users’ unmet needs, and identify cultural, technological and economic trends.

Samsung has built an impressive record in design and landed more awards than any other company in recent years. The bold designs of its televisions often go completely against conventional norms.

With its Galaxy Note series, Samsung introduced a new category of smartphone – the phablet, which has been widely imitated by competitors. Design is now so much a part of the organisation’s corporate DNA that its future lies largely in the hands of its designers.

Although the company is a design powerhouse today, it hasn’t been a smooth ride since the earliest days of its design revolution and still involves managing very real tensions. Occasionally, designers and engineers lock horns; and at times, suppliers are adamant that they can’t supply components to the given specifications.

Nevertheless, Samsung is much better off now as a design powerhouse than it was in the past.