Innovation Case Study: Samsung by FutureThink


More Info

                           Case Studies
                                                                      How Samsung

© 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
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

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

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.

1. LEAD BY EXAMPLE: Get senior management to play an active part in

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
To top