Second, abandon the quantity-centric business philosophy. The two oil crises made the founder of the industrial empire realize that in a small country with scarce resources, Samsung can only create a bright future to do a good job in semiconductors.

Introduction

After the Frankfurt conference, Samsung launched a new business movement.

first, advancing towards the high end.

Second, abandon the quantity-centric business philosophy.

Third, focusing on effectiveness and burying formalism.

Two oil crises made the founder of the industrial empire realize that in a small country with scarce resources, Samsung can only create a bright future to do a good job in semiconductor .

"You must start this career before I close my eyes, so that Samsung will be safe and sound."

. Samsung Miracle

On October 25, 2020, Samsung Electronics announced that its president Lee Kun-hee died of illness.

Since he was hospitalized due to a heart attack in 2014, this elderly man in his seventies has touched the heart of the world's semiconductor industry.

Regarding his death, the most authoritative media in the world, such as Reuters , AP, Bloomberg , etc., released the news as soon as possible.

In the history of the global semiconductor industry, few people have such influence that has touched the world. And such influence is based on one miracle after another created by Lee Kun-hee and Samsung in the past few decades.

Samsung's influence is first reflected in its dominance over the global semiconductor industry.

In 2017, Samsung ended its dominance in Intel 25 and became the world's largest semiconductor company; at the same time, it also "turned over" Apple that year and became the world's most profitable company.

In the world, Samsung is still the largest mobile phone manufacturer and the world's largest consumer electronics company. It is the world's NO.1 in nearly 20 products such as TVs, memory, and display panels. What is most amazing about

is that it controls the lifeblood of the global mobile phone industry chain. The three major mobile phones include CPU, memory and OLED panels. Samsung is the world's first in the world and chip foundry is the second in the world.

Take memory as an example, Samsung DRAM has a share of up to 50.2%. As long as you produce a mobile phone, you cannot do without Samsung. Apple is very awesome, but its panels and memory are from Samsung. Huawei and HTC have both suffered great losses due to Samsung's supply cut.

Such "perverted" control power has even caused panic in the industry.

Acer founder Shi Zhenrong and TSMC boss Zhang Zhongmou publicly stated that Samsung is the enemy of Taiwan's IT industry; Hon Hai Chairman Terry Gou claimed that defeating Samsung is his lifelong goal.

In South Korea, Samsung's influence is even more "one-handed" and its revenue accounts for 20% of South Korea's GDP. Some people joke that there are three things that Koreans cannot avoid in their lifetime: death, taxes and Samsung.

In addition, Samsung is also the largest arms dealer in South Korea and one of the three largest shipyards in the world. It can build aircraft and tanks. It is built by it.

's "perverted" control power has even caused panic in the industry.

Acer founder Shi Zhenrong and TSMC boss Chang Chung-mou publicly stated that Samsung is the enemy of Taiwan's IT industry; Hon Hai Chairman Terry Gou claimed that defeating Samsung is his lifelong goal.

In South Korea, Samsung's influence is even more "one-handed" and its revenue accounts for 20% of South Korea's GDP. Some people joke that there are three things that Koreans cannot avoid in their lifetime: death, taxes and Samsung.

In addition, Samsung is also the largest arms dealer in South Korea and one of the three largest shipyards in the world. It can build aircraft and tanks. The Dubai Tower, Taipei 101, and the Kuala Lumpur Twin Towers are all built.

However, who would have thought that such an amazingly controlled company was working for Japanese people 40 years ago, producing cheap "street stall goods" 30 years ago, and being beaten by Sony 20 years ago!

is Lee Kun-hee who led Samsung to achieve this shocking counterattack.

2. Stop betting

Samsung's counterattack is due to its gambler-like investments in semiconductors again and again.

, the largest chaebol in South Korea, started just a small chamber of commerce. It was founded by Lee Byung-chul in 1938. It was the first to trade and sell dried fish and vegetables to China.In the 1960s, he entered the fields of sugar production and fertilizer production. Samsung Electronics was established in 1969 and began to produce black and white TVs.

In the 1960s and 1970s, the global electronics industry developed rapidly. Lee Byung-chul was keenly aware that this high-value-added industry is the hope for South Korea's future. But his idea was to work for Sanyo, Japan.

At that time, semiconductor technology monopoly was in the hands of the United States and Japan, and Lee Byung-chul dared not have too many extravagant expectations. Most of the company, including the president who is close to each other, opposes investment in semiconductors, and even the government is not optimistic about it.

At this time, his youngest son, Lee Kun-hee, who has returned from studying in the United States, stood up and said to his father: "Dad, even if I am the only one, I have to try that!"

So, in the extreme remarks of "semiconductors will destroy Samsung", Lee Kun-hee began his own business. In 1974, he used his own funds to buy a Korean semiconductor company, pointing to the rise of memory (DRAM) technology at that time.

The ambitious Lee Kun-hee soon suffered a lot. He went to Silicon Valley more than 50 times to introduce technology and talents, devoted great efforts, but continued to make losses.

At the end of his life, his father sent his son to help him in the future. The two oil crises made him realize that in a small country with scarce resources, Samsung's future is semiconductors.

"You must start this business before I close my eyes, so that Samsung will be safe and sound."

In 1983, Samsung established its first semiconductor factory in Qixing, Gyeonggi Province, and officially declared war on DRAM memory. However, both the father and son underestimated the fierceness of the battle.

In everyone's impression, electronic products are priced down every year. But memory is very strange. Like chemicals, it is a heavy asset and a strong cycle. The price goes up and down. When it rises, it counts money and is sluggish. When it falls, it even wants to cut it. The advantage is that once you survive the recession period, you will be the boss of the world.

is in this industry, and there is only one strategy: either kills his opponent with money, then he will be killed by his opponent with money.

Intel is the earliest player in this industry. In 1970, it invested DRAM in large-scale applications and swept 80% of the market four years later. Afterwards, the Japanese emerged and defeated Intel.

When Samsung entered this market, the Japanese were already the world overlord. After finally breaking through the technological blockade, I bought 64K DRAM technology from the inconspicuous Micron, which was then inconspicuous, and encountered the first recession in the industry.

In 1984, Samsung just launched 64K DRAM, and the memory price plummeted, from avalanche of $4 per piece to 30 cents per piece. At this time, Samsung's cost was $1.3 per piece. In other words, you lose $1 for every tablet produced. By the end of 1986, the cumulative loss was US$300 million, and all equity capital was in short supply.

In fact, until 1987, the day Lee Byung-chul passed away, he did not see Samsung semiconductor profit.

Due to the market downturn, Intel, the former industry tycoon, was forced to withdraw and switched to CPUs. Japanese manufacturers such as NEC have also reduced their investment scale. Only Samsung doesn't know how to "be for the most part" and is crazy about increasing its investment against the trend like a gambler.

"The more difficult it is, the more you need to increase your investment." The losses that lasted for more than ten years not only failed to shake Lee Kun-hee's belief, but instead aroused his fighting spirit.

In order to overcome the technical difficulties, Samsung hired engineers from Japan and used weekends to teach technology to South Korea. At the same time, we go to American semiconductor companies to recruit experienced Koreans. Inspired by patriotism, these people gave up their careers for many years and returned to South Korea, sacrificing all holidays and joining the battle day and night.

Among this group of people, there is a young man named Chen Daji who refused IBM's repeated attempts to retain him and joined Samsung without hesitation. 's reason is that "I really want to win Japan once" . This young man later became the CEO of Samsung Electronics.

However, it is far from enough to have a passion. In 1983, when Samsung developed 64K DRAM, its key technologies lagged behind Japan for 5 years. By 256K, it was 2 years behind Japan; at 1M, it was still 1 year behind.

During this period, Samsung people were mocked by Japan. But they ignored it and worked hard.

1987, Samsung people who have been struggling for many years finally ushered in a turning point in the industry.That year, the United States initiated an anti-dumping lawsuit against Japanese semiconductor companies, and the two parties reached an export restriction agreement. Affected by this, DRAM prices rebounded, and Samsung took advantage of the situation to rise, not only achieving profitability, but also began to lead Japan in technology.

In 1992, Samsung took the lead in launching the world's first 64M DRAM, and surpassed Japan's NEC that year to become the world's largest DRAM manufacturer. Two years later, it was the first to launch 256M DRAM.

The rise of Samsung has also led to the formation of a memory industry cluster in the entire South Korea. In addition to Samsung, Hyundai (renamed SK Hynix after 2001) has also entered the top three in the world.

Under the pressure of Korean manufacturers, the Japanese government had to integrate the DRAM business of Hitachi, NEC, , Mitsubishi and form a "national team" Erbida in order to seek confrontation. Even so, the Japanese could not escape the fate of defeat. More than ten years later, Samsung did the same thing and completely drove the Japanese out of this industry with suicide investment.

In 2008, the financial crisis broke out and the DRAM price avalanche, falling from US$2.25 to US$0.31. Just when many manufacturers were in amazement, Samsung made a shocking decision: to use all Samsung Electronics' profits in the previous year to expand production capacity and deliberately expand industry losses!

is fast, and DRAM price falls below the material cost, and most players can't stand it.

The first one to fall was the German giant Chimmonda, who went bankrupt in early 2009 due to a broken capital chain.

Japan is even worse. Erbida struggled to hold on for several years and was finally acquired by Micron in 2012. Another giant, , Toshiba 's flash memory business was also acquired by Bain Capital, the United States in 2017. All the Japanese hopes were shattered.

On the night of Erbida's bankruptcy, the Samsung headquarters in Gyeonggi-do, Seoul was brightly lit all night.

At this point, there are only three major players left in the entire DRAM industry: Samsung, SK Hynix and Micron. Among them, the two Korean giants, Samsung and SK Hynix, have a 75% share, becoming a veritable industry overlord.

entered 2016. Driven by demand for big data, cloud computing, Bitcoin mining and other demands, memory prices soared. Samsung counted money to death, and took advantage of this east wind to knock Intel down in one fell swoop.

The same story was repeated on the LCD panel.

Like memory, LCD display technology was first born in the United States. In 1968, RCA developed the world's first LCD display. But as the overlord of CRT TV, he has no intention of pushing it to applications.

The Japanese were the first to smell business opportunities. In 1972, Sharp bought RCA's technology and used it on small objects such as calculators and clocks. After the 1990s, the emergence of laptops opened the LCD era in human history.

During this period, the liquid crystal technology has produced thin film transistor liquid crystal displays (TFT-LCDs) after countless iterations. Japanese companies represented by Sharp accounted for 90% of them.

Samsung began tracking LCD technology in 1984, and did not establish a panel business unit until 1991, and built the first trial production line that year.

This is another industry that is heavily in assets and has strong cycles. Lee Kun-hee understands that if wants to survive in such an industry, he must have the courage to burn his head and be the first in the industry at all costs.

But at this moment, the situation he faces is no better than DRAM, or even worse. As soon as the project was launched, it caught up with the first recession of the industry. For the next seven years, Samsung suffered continuous losses, from 1991 to 1994, losing $100 million each year.

LCD panels are divided into different generations. The higher the algebra, the larger the size of the substrate produced, and the larger the screen size that can be cut. In order to accumulate technical strength, Samsung took advantage of the industry's recession to go to Japan to recruit unemployed engineers.

1995~1996, the industry fell into recession again. Samsung went against the trend and built the first third-generation line to catch up with Japan's production capacity. Seeing the dawn begins to appear, it hits the Asian financial crisis again.

During this crisis, Samsung was deeply in a debt crisis and had to cut off many projects. Only LCD panels are not only unscathed, but also invest billions of dollars in additional investment. In 1998, Samsung built a 3.5-generation line, leading Japanese companies in all respects.

The Japanese were completely confused in the face of such crazy actions.In Sharp's view, the existing production capacity is already overcapacity, and investing in a higher generation is tantamount to suicide; some Japanese executives in even satirized Samsung, and they will definitely sink like the Titanic.

However, Lee Kun-hee, who was so angry that she was red, ignored it and decided to start production of the fifth generation line in 2001. Afterwards, he had another bet. took the lead in building the fifth generation line, becoming a watershed for South Korea to surpass Japan.

After 2001, Samsung used 40-inch TFT-LCD LCD TVs to completely overturn people's inherent concept of LCD screen size, and home TVs ushered in the LCD era.

In contrast, Sharp was soon defeated because of his conservatism. Despite fighting back afterwards, he never failed to turn over. In 2016, Foxconn spent US$3.5 billion to acquire Sharp, the father of a generation of LCD ended in a sad way.

In 1998, Samsung surpassed Sharp and became the world's largest panel company. Seven years later, with its advantages in LCD technology, it overturned its former idol Sony and became the world's largest TV manufacturer.

Samsung, which reached the top of the industry, did not slacken. It was the first to study the next generation of display technology OLED in the industry, and eventually became the overlord of the generation of OLED.

3. The hidden emperor

invested in memory and suffered losses for 13 consecutive years; invested in LCD panels and suffered losses for 7 consecutive years.

This suicide investment decision is unimaginable in European, American, and even Japanese companies. Under the decentralized power model, it is difficult for all parties to reach an agreement on such a loss of money for their own interests.

But at Samsung, Lee Kun-hee gained an imperial influence by setting up a secretariat between himself and his business department. The powerful authoritarian model of

allows Samsung to have amazing execution ability and be able to invest in semiconductors at all costs; at the same time, it also has amazing decision-making efficiency, and when its opponents are still hesitating and waiting, it has taken the lead.

Compared with many leaders who talked about it, Lee Kun-hee is simply an outlier.

He is introverted and doesn't like to talk. Even if he is close to people around him, he doesn't speak easily. at home, his nickname is "The Wordless Man"; in the company, he listens most of the time every time he holds a president's meeting.

He doesn't sit on duty and has no special activities, so it's hard to see him at Samsung headquarters. He doesn't like to show up in public. He usually stays alone in his private residence in Hannan Cave, and likes to work at night, "he really spends a lot of time wearing pajamas."

Because he speaks less, he has plenty of time to think, so he is closer to the essence of the problem than others. Many times, if others talk for a long time, just one word of his can make the other party feel respectful.

Reuters reporter once described him like this: "Speak softly... but as long as he coughs, South Korea will catch a cold."

Whenever he encounters a difficult problem, he will stay at home, not go out for several days, and remain as silk as wax figures, and even intoxicated for 48 hours in a row, just occasionally getting up and having a hamburger. When he went out, the problem had been solved 70% or 80% of it.

Lee Kun-hee's style comes from his father's teachings on the one hand. In 1979, on the first day of taking office as vice president, his father called him to his side and warned him to know how to listen and be calm and calm like a wooden chicken.

On the other hand, it is also affected by the family environment.

Lee Kun-hee was born in a big family in 1942. Because his parents are busy starting a business, he was sent to his grandmother's house as soon as he was weaned. Since then, I have been living in disarray. He transferred to Japan five times in primary school and was sent to study at the age of 11.

"I grew up alone and haven't even received 1% of family education." Lee Kun-hee recalled more than years later.

Because he is always separated from his family, he has developed an introverted personality and has few friends, so he often thinks alone. He likes to question the appearance of things and to see what is inside.

When he was very young, he was a mechanical maniac, obsessed with its internal structure and had dismantled countless things. This hobby will accompany him throughout his life. He was poisoned by books and especially liked mechanical books. From electronics, aviation to engines, and engineering, his electronic knowledge was no less than that of an ordinary engineer.

Samsung's achievements in semiconductors are closely related to Lee Kun-hee's knowledge reserve.

When developing 4M DRAM in 1987, the industry had two technical routes: stack and trench, each with its pros and cons.

Toshiba chose the groove, while Lee Kun-hee chose the stack based on her intuition. It turns out that the grooves are suitable for 16M, while the stacks are more suitable for 4M, Samsung won a big victory, and Toshiba was caught up by Hitachi.

In addition to loving research, Lee Kun-hee is also a very dedicated person.

While studying in Japan, the dog became his friend because of loneliness. He has many dogs, and he eats ice cream with them every day, sleeps with them, and bathes them.

He raises a dog not just to play with, but to go deeper and ask the bottom line. In order to cultivate purebred Jindao dogs, he went to Jindao to buy more than 30, and spent more than ten years to cultivate and breed, which finally proved that the origin of Jindao dogs is in South Korea.

He also likes watching movies. In Tokyo, he often goes to the video hall alone, watching movies while gnawing sandwiches. He watched 1,300 movies in in three years, which is equivalent to the 10-year movie production in Japan.

By watching movies, he studied Japan very thoroughly. Like raising a dog, he not only looks at the plot when watching movies, but also carefully considers the director's intentions and analyzes how photographers use the camera. He once said that if he was born in someone else's family, he might be a director.

Lee Kun-hee especially likes to study how the best people in various fields reach the peak of their careers. To this end, he watched the video of Tokugawa Ieyasu over 30 times, Toyotomi Hideyoshi over 10 times, and Oda Nobunaga for five or six times.

These three people are heroes of the Warring States Period in Japan. Oda Nobunaga first rose up with an intention to unify Japan, but was later forced to death by his subordinates; his adjutant Toyotomi Hideyoshi inherited his power in the name of avenging his master.

Tokugawa Ieyasu's experience is the most bizarre. He was a hostage for 13 years, endured it for 20 years under Oda Nobunaga, and lived at Toyotomi Hideyoshi's house for 15 years. Finally, after sending the two old men away, they finally unified the world.

People in the world use one question to imply the different personalities of the three.

. Is there any way to make a cuckoo that doesn’t call?

Oda Nobunaga said, kill it; Toyotomi Hideyoshi said, find a way to tease it; Tokugawa Ieyasu said, wait until it called.

Lee Kun-hee prefers the forbearing Tokugawa Ieyasu, and this character is almost a microcosm of him.

When Lee Byung-chul was first considering his successor, he did not like Lee Kun-hee. In his opinion, this youngest son is introverted and is a person who cannot become a great man.

In 1966, Samsung smuggled sugar sauerk and was seized by customs. After the incident, Lee Byung-chul retired in disgrace, and his second son Lee Chang-hee was sentenced to prison for his father. In a hurry, Lee Byung-chul handed over the seal of the eldest son Li Mengxi .

The young Li Mengxi wanted to regroup, but her ability was limited. Samsung quickly fell into chaos due to poor management.

So, Lee Byung-chul turned his attention to Lee Kun-hee. Who knew that after his second son Lee Chang-hee was released from prison, he found that his father began to favor Lee Kun-hee. He was extremely dissatisfied and wrote a letter to the president to expose his father's tax evasion and his transfer of assets overseas.

Coincidentally, the first person to receive Changxi's letter from Blue House was Chun Doohuan, a friend of Mengxi when she was in middle school.

Lee Byung-chul was furious and drove Changxi out of South Korea, not allowing him to come back. Meng Xi was implicated because of her close relationship with Changxi and gradually moved away from the core of power.

After rescuing his eldest and second brothers, Lee Kun-hee was eventually appointed as the heir to Samsung.

1976, Lee Byung-chul was diagnosed with gastric cancer. Before going to Japan for treatment, he held a family meeting and announced: "From the future, Samsung will be led by Kun Heelai." Three years later, Lee Kun Hee was officially promoted to the vice president of Samsung Group .

During his time as the "Crown Lord", Lee Kun-hee did a big thing - investing in semiconductors.

htmlFor more than 0 years, my father has dominated everything about him. From the bottom of his heart, he hoped to defeat his father and make a big career in a certain industry just as his father gave birth to the Samsung empire in the ruins of the post-war period.

After a long-term investigation, he set his sights on semiconductors. The reason is that South Korea is a small country with scarce resources and should develop cutting-edge industries with high added value. Most importantly, that is the field you are obsessed with and good at.

Although he was confident, he still did his homework before taking the risk.During the argumentation process, he did not miss any details. Even Koreans love cleanliness and semiconductors need a spotless working environment.

is obsessed, so I am devoted, so I find the root of the problem and explore the inner essence of things. More than a few years later, someone asked him, what is business? He replied that business is something that others cannot see.

Interestingly, his obsession with semiconductors made him lose some opportunities while rewriting history. In the early 1990s, the great director Spielberg planned to build a Dream Factory and recruit partners around the world. Celebrities from all walks of life flocked to him, and Lee Kun-hee became a charming candidate because of her love for movies.

Spielberg held a private banquet and invited Lee Kun-hee to discuss the plan together. Lee Kun-hee brought the other party $500 million check and raised the price to $900 million during the conversation, but the other party's face became increasingly ugly. The negotiations eventually broke down.

Afterwards, Spielberg complained: "This guy has been talking about semiconductors throughout the dinner and talked about it more than 20 times! Can such a person understand the film industry?"

4. Everything except his wife and children will change!

In November 1987, Lee Byung-chul passed away, and 45-year-old Lee Kun-hee succeeded to Samsung president. The following spring, at the 50th anniversary meeting of the group, he announced with great enthusiasm that would build Samsung into a world-class enterprise.

However, his ambitions were quickly wiped out. After his father worked hard for 50 years, he left him with not only a huge business empire, but also an impregnable concept and system.

At that time, Samsung at that time, driven by the "Han River Miracle", did not worry about sales of products and no one cared about quality. Everyone was intoxicated by the complacency that South Korea had the highest level.

Lee Kun-hee warned people as early as the "Crown Prince's Assistance" period that if Samsung continues like this, it will definitely be over. But at that time, no one listened to him, and everyone thought that this was a worry.

After succeeding as president, Lee Kun-hee repeatedly warned his subordinates that if he was not sure where he was behind others, Samsung would likely collapse. The president was worried, but his subordinates were extremely puzzled: I said that he went bankrupt every year, isn’t it okay until now?

What’s more serious is that at this time, the entire organization of Samsung was left by his father. The former veterans were unwilling to suffer damage to their own interests and tried every means to obstruct the change.

In fact, since becoming the successor, Lee Kun-hee's road to "ascending the throne" has been extremely uneven, and she was full of various conspiracies and slander.

In 1982, after a car accident, rumors about him were flying all over the sky and never stopped. Some people say that he was hit into a vegetative person; some people say that he had an affair with an elevator girl, and was with a female star in a car accident, and had countless illegitimate children. Under the heavy pressure of

, Lee Kun-hee fell into confusion. Later, he simply refused to go to work in the company and hid alone in his "cave", allowing the rumors to become more and more intense.

However, silence does not mean weakness, but is accumulating strength and ready to seal the throat with one sword at any time.

In the fall of 1990, he kept calling senior executives in the secretariat, criticizing them as the Gestapo and the KGB, and suggesting that they are stubborn bastions that hinder change.

At the end of this year, after the three-year mourning period ended, Lee Kun-hee unexpectedly took out his first sword. He transferred Su Binghai, the senior leader of the secretary's office, replaced him with his high school alumnus Lee Soobin, and reorganized the secretary's office.

Through this "cleaning", Lee Kun-hee truly grasped the real power.

Next, the he wants to do is to cut off the deep-rooted concept of "number first" and give Samsung a revolutionary reconstruction. How to promote this reconstruction process? Lee Kun-hee fell into deep thought, and he spent every day in anxiety.

This anxiety reached its peak in 1992. From summer to winter, he had been insomnia and had no more than 4 hours of sleep every day. He usually ate barbecue and was able to eat one meal a day. After half a year, I lost more than ten kilograms.

After being silent for a long time, Lee Kun-hee took out his second sword with his own thoughts.

Since early 1993, he has been constantly inspecting the US, Japan and Germany markets.

In Los Angeles, he witnessed Samsung's products with his own eyes. Because of their poor quality, they were abandoned in remote corners of the big shopping mall, covered with dust. Then he saw a similar scene at Tokyo Akihabara Market.

Although he was prepared in his heart, the scene in front of him still shocked Lee Kun-hee. What surprised him even more was that all this was just the beginning.

htmlOn June 5, Lee Kun-hee plans to fly to Frankfurt. The night before, he called several Japanese consultants to the room, wanting to hear their opinions. A man named Futian submitted a report to him.

The next day on the plane, Lee Kun-hee opened the report and was furious after reading it.

It turned out that Futian denounced Samsung's shortcomings in the report, saying that over the years, he has been excluded from the company and has repeatedly proposed proposals and improvement plans, but has been rejected by his superiors. When I wrote this report, I was ready to resign.

On the same day, Lee Kun-hee encountered something even more annoying.

Before boarding the plane, he received a videotape from the secretary's room, which was shocking: In the production workshop, the upper cover switch of a washing machine was a little larger and could not be installed, so Samsung's employees simply cut off the extra parts and barely installed them.

Lee Kun-hee became popular at first sight. He immediately called the deputy director of the secretary:

"From now on, record my words! I emphasized the quality management for so many years, and the result is like this? Let the presidents gather in Frankfurt. From now on, I will go on the fight in person!"

Samsung executives who were scolded, including the president Yin Zhonglong and more than 200 people, hurriedly took a plane to Frankfurt.

June 7, Frankfurt, Kempinski Hotel.

Everyone held their breath and was very nervous. Lee Kun-hee looked around and slowly began his speech.

"The day before yesterday, that is, on the 5th... Is this what I am talking about quality management?... The defective products are cancer cells that erode the company, and it is a business crime. Everyone is committing crimes!" When he said excited, Lee Kun-hee's lips trembled slightly.

"From now on, Samsung will decisively give up its quantity-based business and take the quality-based route." Speaking of this, he paused for a moment, and then shouted a shocking sentence: "Everything will change except for your wife and children!"

A few days later, Lee Kun-hee called the president's group to his room, wanting to know their views. Secretary-General Li Zhubin said carefully: "President, we cannot give up on quantity yet. Quality and quantity are two sides of a coin."

This was also the idea of many people at that time. When Lee Kun-hee heard this, her face turned green. He stood up angrily, threw the teaspoon in his hand to the ground, and brushed his sleeves away, leaving behind the presidents with a look of panic.

Afterwards, Lee Kun-hee reorganized her secretariat again, and Lee Soo-bin stepped down in disgrace.

From Los Angeles, Tokyo to Frankfurt, in more than three months, Lee Kun-hee summoned thousands of employees abroad and delivered more than 1,000 hours of speeches. The longest presidential meeting lasted more than 16 hours, and all senior executives were baptized.

After the Frankfurt conference, Samsung launched a new business movement.

first, advancing towards the high end.

For this reason, Samsung withdrew from large supermarkets such as Walmart and transferred to professional stores such as Best Buy to sell; implemented a brand strategy, reclaimed the advertising rights of its subsidiary, and was uniformly handed over to the advertising giant Meige (FCB); spent huge sums of money to join the top 10 Olympics plans.

Second, abandon the quantity-centric business philosophy.

launched a quality campaign, sorted out the idea of quality first into materials, and organized employees to study every day. At the same time, a stop mechanism is implemented on the production line. Once unqualified products are found, the machine will be shut down immediately for maintenance.

Lee Kun-hee himself had a long talk with thousands of executives. In addition, he recalled 150,000 problematic mobile phones, destroyed 50 billion won defective products in public, and told the person in charge: You will never be ruthless if you produce such inferior products!

Third, focusing on effectiveness and burying formalism.

carries out personnel reforms, breaking hereditary, kinship and geographical relationships, vigorously promote young people, and reusing skilled people.

implements the 7.4 system, and start work at 7:00 in the morning and get off work at 4:00 in the afternoon.In this way, after get off work, you can not only exercise and meet friends, but also have time to go to the library to learn to recharge.

Through this movement, Lee Kun-hee made Samsung revolutionary changes. It changed the second-rate awareness of Samsung people and made quality management a consensus among everyone in the company.

Facts have proved that this change came too timely and critically.

Four years later, a financial crisis swept across Asia and a large number of Korean companies declared bankruptcy. Samsung successfully survived the crisis due to its early transformation and when the storm came, it decisively cut off unprofitable businesses such as satellites and trucks.

5. Talent first-class

is a semiconductor, and it mainly focuses on two things.

One is money. Semiconductors are money-burning games. Building a factory can cost billions of dollars. The price of an ASML lithography machine alone is as high as $100 million, and it may not be sold to you. For example, it will be banned from selling it in China for a long time.

The other one is talent. In the high-tech industry, talents are the lifeblood of enterprises.

In the past one or two years, mainland semiconductor companies have been "poaching" in the entire East Asia, causing panic among Japan and South Korea. South Koreans say: Don't be afraid of China boycotting "THAAD", but you are afraid of China poaching people.

Koreans should of course be afraid, because the rise of Samsung is largely the result of talent strategy.

Samsung's desire for talent began in the era of Lee Byung-chul. The founder of this empire proposed the belief in talent first-ism very early. He claimed that 80% of his life was spent educating and selecting talents.

The Li family and his son have very different personalities. Lee Byung-chul is very sharp and good at expressing himself; he has the rigor of being as clean as a virgin and will never allow any mistakes. Even if he gets on the plane for one second, he will be furious at the secretary.

Lee Kun-hee is the opposite, taciturn and rarely reveals his sincerity; he is generous and allows his subordinates to make mistakes, and never asks about details, only caring about general direction and strategic issues.

But the two have a coincidence in terms of talent issues.

After Lee Kun-hee took power, she attached more importance to talents than her father. In 2002, he said in front of many presidents: "In the past, hundreds of thousands of people supported a monarch; today one day can support 200,000 people."

He also took Bill Gates as an example, showing that as long as there are three Bill Gates in South Korea, the entire country can be upgraded to a higher level. And my task is to find three such geniuses.

Although he is introverted, Lee Kun-hee has a unique skill in identifying people.

Back then, my father fired a cadre. As a high school student, Lee Kun-hee believes that this person is a talent and suggests that his father invite him back. As a result, this person later made a huge contribution to Samsung.

His classmates saw that he interfered with the adult affairs and sarcastically said a few words, but he said: "I do the most serious way to study people's homework." 's words were chilling from the mouth of an introverted child.

Lee Kun-hee likes talents with characteristics. Although they are not necessarily all-rounders, they must have unmatched talents in a certain field, and at the same time they must have the fanaticism of "from carriage dream to car".

Samsung's quality has been rapidly improved through the launch of a new business campaign, but Lee Kun-hee quickly realized that design is the only weapon to go global.

For this reason, he launched a massive design revolution.

The two geniuses Lee Kun-hee invited from the United States. One is American industrial design master Gordon Bruce, and the other is IBM prodigy Tom Hardy, the design leader of ThinkPad.

Before the two came, Samsung's designers were a group of "farmers wearing suits and ties". They were conservative and thought about how to defeat Japan all day long.

To change their mental patterns, Bruce tells them to forget their enemies and focus on design. At the same time, they are required to study overseas three times a year. During their trip abroad, they are not allowed to speak Korean or use chopsticks.

Tom Hardy uses his own experience to broaden his horizons and inspire his ideas for designers, and suggests that Samsung quote Korean traditional culture to express its design philosophy.

Under the guidance of the two masters, Samsung's design level has made great progress. Since 1998, Samsung has frequently won the Industrial Design Award of the United States (IDEA), becoming the company with the most awards.

In order to attract talents, Lee Kun-hee broke the rules and offered them a higher salary than the CEO. He personally went to places where talents gathered in Japan, the United States, Europe and other places to recruit talents, and poached people from the world's top 500 companies.

Today, Samsung has built a three-level R&D system with Samsung Comprehensive Technology Academy (SAIT) as its core, and it also implements a regional expert system, sending outstanding talents to study overseas every year.

In Lee Kun-hee's view, "No matter how expensive this talent is, you must recruit Samsung as long as you need it." and his subordinates also know that any talent the president likes must be won no matter how much the price it costs.

In 2001, Samsung targeted a semiconductor expert. It was originally scheduled to sign the contract on September 12, but the 9/11 incident occurred the morning before, and all flights across the United States were grounded. As things were about to fail, Li Xianfeng, the head of the Personnel Department, drove to the other party's home for 13 hours in a row despite his fatigue.

You can spend all your money to poach people, but you can't keep the talent, and Lee Kun-hee will get angry. Once, a Samsung president was poached by Hyundai. Lee Kun-hee refused to give in and kept finding the president. It was only after he took the person back that he was done.

Samsung's most classic poaching was to poach Liang Mengsong from TSMC.

TSMC is the world's largest chip foundry, while Liang Mengsong is the veteran of TSMC and the person in charge of FinFET process. His contribution is considered second only to the company's vice president Jiang Shangyi.

In 2009, Liang Mengsong suddenly resigned from TSMC and signed a non-compete agreement with the company before leaving. After

, Liang Mengsong went to South Korea to teach in a place called Sung Kyoto Kwan University. There, he only taught one course, and the weekly teaching time was no more than 3 hours, and there were only 10 students.

What is little known to the outside world is that this Sungkyunkwan University was invested by Samsung. TSMC was kept in the dark until one time, Liang Mengsong accidentally let out a word in an email and wrote a letter to his instructor to celebrate his birthday in Samsung's email.

According to the facts disclosed later, Liang Mengsong's students at Sungkyunkwan University are all senior technical personnel of Samsung.

has always attributed Samsung's rise in chip foundry to Liang Mengsong's "rebellion". But this statement is obviously exaggerated. In fact, Samsung started making chips as early as 2004, and later worked as a foundry for Apple, and its strength should not be underestimated.

Samsung not only poached Liang Mengsong, but also made the idea of TSMC founder Zhang Zhongmou.

According to Chang Zhongmou himself, when Lee Kun-hee went to Taiwan to inspect business in 1989, he gave him an olive branch, but he refused. What Lee Kun-hee didn't know is that Chang Chung-mou established TSMC two years ago.

6. The hidden worries of the empire

Today’s Samsung tightens the lifeline of the global mobile phone industry chain and is at its peak. However, like many empires that were once prosperous, Samsung also has many hidden worries, like a thorn on its back.

Since its establishment, Samsung has nothing to do with politics.

was first supported by the Seung-man Lee regime in World War II and the Korean War. In the early 1960s, Park Chung-hee came to power through a military coup, offering conditions to Lee Byung-chul and others: either join his development plan or stay in prison.

From then on, Samsung was tied to the "politics" chariot. From Park Chung-hee to Chun Doo-hwan, and even after Kim Yongsan came to power and South Korea became democratized, Samsung has always had a close relationship with politics.

In the South Korean government, there are many senior officials, prosecutors and judges recommended by Samsung. And in every critical historical period, Samsung has received strong support from the government.

html Entering the panel industry in the 1990s, the South Korean government provided Samsung with $6 billion in low-interest loans; in the first decade of the 21st century, Samsung received another $8.7 billion in tax exemptions, which was enough to build four semiconductor factories at that time.

However, political and business relations are a double-edged sword, and if you are not careful, you will hurt yourself.

In the military coup in 1961, Lee Byung-chul was convicted of illegally accumulating money and was forced to donate all his property.

A few years later, Park Chung-hee encouraged Lee Byung-chul to smuggle sugar in order to raise the election funds. After the incident was exposed, Lee Byung-chul took the blame himself, and he was so angry that he said to his son hatefully: "Never trust people who engage in politics."

Because he got too close to the government, Lee Kun-hee and his son were both prosecuted. He himself was sentenced to jail twice.

In South Korea, there is a lot of controversy over Samsung. Despite its huge physique and the government and the people do not want it to fall, the overly close relationship between government and business has always been a time bomb hanging over Samsung's head.

What makes Lee Kun-hee even more troubled is that since the era of his father Lee Byung-chul, he has been plaguing Samsung's heirs.

In the 1960s and 1970s, the three Li brothers fought fiercely around the position of "Crown Prince", and the process was thrilling. In the end, Lee Kun-hee won, while his eldest and second brothers, one of them lost their father's trust, and the other was expelled from South Korea by his father, and finally died in a foreign land.

In Lee Kun-hee's era, although he had only one son, , Lee Jae-yong, , he had many worries. Over the years, Lee Kun-hee has gained control of Samsung through a series of controversial means.

But it is precisely because of these methods that he is deeply in jail.

In 2008, Lee Kun-hee was sued by the court for suspected illegal means of transferring equity to her son and sentenced to three years in prison. A year ago, he was forced to resign from his position as president because of this incident.

Father was sentenced to jail and his son took over, and this seemed to be natural. But without Lee Kun-hee's Samsung, she only lasted for one year and six months, and was passive because of the refrigerator explosion.

Later, not only Lee Kun-hee couldn't sit still, but even the South Korean government and the people stood up. The political and business leaders demanded the release of the people, and President Lee Myung-bak went on a stubborn donkey and pardoned Lee Kun-hee in the name of the Pyeongchang Winter Olympics.

But Samsung's disaster did not end there. In 2017, Lee Jae-yong was sentenced to five years in prison for suspected bribery of Choi Soon-sil. Samsung's power transfer was once aborted.

Although Lee Jae-yong has regained his freedom after being imprisoned for a year, he is still deeply involved in fraud and stock price manipulation cases and faces second imprisonment at any time.

It can be said that since was hospitalized due to myocardial infarction in 2014, the successor problem has made Lee Kun-hee anxious.

But there are so many more bad things.

Although Samsung has amazing control in the semiconductor industry, like China, it relies on imports from the United States and Japan, and lacks core technology.

In addition, it also faces strong pursuit from Chinese competitors such as Huawei, Uniscope , BOE , SMIC .

7. The end of an era

Lee Kun-hee, who created the three-star miracle, has now passed away with many hidden worries amid the doubts of the Korean people. However, in the past few decades, the miracles he created have been enough to be recorded in the history of world business.

The Associated Press lamented in the press release:

"Lee Kun-hee inherited control of his father and in his nearly 30 years of leadership career, he has built Samsung Electronics into a global brand... Samsung helped South Korea become the fourth largest economy in Asia, and its businesses include shipbuilding, life insurance, hotels, etc. Samsung Electronics alone account for 20% of the market value of the South Korean stock market."

Lee Kun-hee has created an era, and his departure also means the end of an era. And has left far more than a powerful Samsung, and it is also a precious legacy to global business managers.

As Samsung Electronics said in its statement:

"President Li is a truly visionary person. He transformed Samsung from a local company to a world-leading innovator... His legacy will last forever."

This legacy is also precious to Chinese companies that are struggling to climb the semiconductor industry.

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Author: Zhang Jingbo

Source: Huashang Taoluo

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