"What’s behind the innovation success of this electronics giant? Over the years, Samsung has transformed itself into one of the world’s most respected companies with its clear focus on cutting-edge product design and technology. Its success has not been a lucky accident—Samsung has taken deliberate strides to become a sustainable innovator."
Research Cs Case Studies How Samsung Innovates © 2005–08, Future Think LLC. All rights reserved. All other trademarks are the property of their respective companies. futurethink clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.getfuturethink.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. To purchase reprints of this document, please email firstname.lastname@example.org. Samsung How Does Samsung Generate Results from Innovation? The 2006 BusinessWeek “Best Global Brands” report ranks Samsung #20, placing it above its competitor, Sony (#26), and even hot-shots Google (#24), Budweiser (#27), and Ford Motor Company (#30). Over the years, Samsung has transformed itself into one of the world s most respected companies with its clear focus on cutting-edge product design and technology. Its success has not been a lucky accident—Samsung has taken deliberate strides to become a sustainable innovator. What is Samsung s secret? It breeds a thriving climate to foster innovation. To do so, they focus on some simple but critical elements to generate significant results from innovation. Read on to learn more. Samsung 1. LEAD BY EXAMPLE: Get senior management to play an active part in innovation. A company looks to its leaders for cues on how to behave and employees will tend to emulate the behavior they see at the top. At innovative companies, management goes beyond lip service and actually “walks the walk” when it comes to innovation. A slogan, a press release, or a PowerPoint slide isn t a substitute for active leadership. Beginning in 1993, Samsung s former CEO, Kun-Hee Lee, had a personal vision to catapult the company into the top ranks of global brands. He mandated managers to concentrate less on cost savings and more on unique products. They created the “Chief Design Officer” position, doubled their design staff, and increased annual design budgets by 20–30%. To track progress, the current CEO, Jong-Yong Yun, holds quarterly design evaluation meetings to review new products with unit heads. 2. EXPERIMENT: Cultivate a climate of smart risk-taking. Fear of failure discourages innovation and leads only to copycat improvements, a reliance on business as usual, and an organization that focuses solely on the bottom line instead of growing the top line. Innovators encourage rapid experimentation and draw a line between “smart” and “stupid” risks. To succeed, managers need to roll out practical ways of executing a program of experimentation. Samsung has a dedicated center for experimentation called the VIP (Value Innovation Program) Center. The facility, located near Samsung s main manufacturing facility, is open 24 hours a day, has 20 project breakout rooms, 38 bedrooms for employees to spend the night, a gym, a kitchen, and recreational facilities. In 2005, approximately 2,000 employees cycled through the facility. Samsung realizes how failure and risk fuel ambition and learning. “Fai
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