(Samsung Special) Human-centered Principle as Core Philosophy

“Do not hire those you doubt.”
 
These words are likely to be the best summary of Ho-Am Byung-chull Lee’s idea on talents. Ho-Am put the first priority on people in management, which has been passed down to DNA in Korea’s conglomerate Samsung group for the past 72 years.

Lee clarified his idea on human-oriented management in the autobiography that is written for the purpose of telling his life story and conveying his philosophy to the next generation.

“If you use someone you doubt, you cannot make the most of his strengths. At the same time, he will not be able to fuldemonstrate his abilities. Once employ, leave the job onto his hands,” Ho-Am said in his book.
 
◆ “Trust draws more than one’s capability.”

Ho-Am was a well-known CEO for not signing on documents asking for his approval during the initial stage of business. Instead, Lee gave frontline managers authority to sign based on their judgment even on financial issues with importance.
 
Such trust comes from complete faith in people. He highlighted the importance about limitless confidence in assigning several responsibilities to talents, saying that perfect trust makes people surpass their capability.

His faith in human being originated from the experience with employees whom Ho-Am hired for a brewery factory in his early days. The factory turned out to be a foundation for his comeback as a businessman who became literally penniless after Korean War. He got nothing because Lee was only an owner before the war who used to be least involved with the management. It was his employees who raised funds of 300 million won for his comeback. The money was used to build the base for Samsung, one of the world’s best companies.

Ho-Am is also noted as a manager with love for his people. For instance, Lee has re-hired former employees in Tongyang Broadcasting Corporation (TBC) which he founded, but later Korean Broadcasting System (KBS) took controls in 1980 when then dictatorial president Doo-hwan Chun shut down the press and merged media companies. It clearly represents that Lee did not want to see his people suffering in other organization. Lee with reputation of being so cruel in terms of business showed a great affection to staff he cared.
 
◆ Stick to Talents First Principle
 
However, he did not show any generosity in using the best-fit talents for his companies.

For instance, Ho-Am transferred control over most companies to a third son Kun-hee  – former chairman of Sumsung Group-, which was quite rare in Korean culture with preference in primogeniture where the first-born son inherited the entirely of a parent’s wealth.

Ho-Am thought that it would be more difficult to keep his enterprise than to start a new business. That is why he decided to pick out Kun-hee over his first son Mang-hee under the 10-year apprenticeship. 
 
“I do not see Samsung as my personal belonging. Samsung is for Korean society. Therefore, its prosperity directly connects to rise and fall of the country. I sincerely wish that my choice for successor will only be a lead to new growth engine for the company,” he said, showing his agony in making up the mind for the next leader of Samsung. 

His foresight was precious in that Kun-hee accelerated more developments than ones under the leadership of Ho-Am. In particular, Kun-hee made a successful story in returning to profit semiconductor business which had continued to be in the red when Ho-Am started the business for the sake of national future in spite of the objection. Samsung electronics currently plays a critical role in Korean economy by ranking 1st place in memory chip production and 2nd place in semiconductor making.

◆ Priority to Human Resources
 
Ho-Am did not stop putting efforts to select and foster talents and upgrade their abilities.

In 1957, Ho-Am initiated Korea’s first open recruitment process in order to take advantages of hiring more top talents than any other companies. In addition, he implemented the employee ownership plan so that individuals in the organization share more dividends as the company earns more profits. The system contributed to imprinting into employees’ mind the idea that development of organization leads to personal improvement. Ho-Am also carried out a variety of plans for welfare of employees.
 
Instead of building a labor union, he proposed the alternative which includes a consultative group for enhancing the cooperation between workers and managers because Ho-Am had a strong belief that a company can never grow further in the culture where two major parts are in conflict. Jack Welch, Former Chairman of General Electronics and a.k.a. a legendary CEO, has recognized high value of his management style without labor union. 

His will passed onto the current culture in Samsung. Samsung was able to make the most of its culture for building mutual trust and cooperation while other local companies wasted time and energy on dealing with confrontation and conflict between labor and management, which were resulted in weakening their competitiveness.

Ho-Am gave full supports to employees seeking opportunities for self-development. For example, Samsung HR Development Center was built in 1982 for the purpose of training employees with high talents so that they will not lag behind the trend in the market. At present, E-learning system is available not only to train nominees for high-ranking positions but also to provide education for overall employees. 

Ho-Am left words for managers of next generation as follows; A company is managed by people and people are what will make or break the company and the company produces such talents. 

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