Book Review # 3: “Samsung Rising: Inside the secretive company conquering tech”
It’s the story of the rise of this very interesting and rather intriguing conglomerate over the last few decades, especially the cash cow Samsung Electronics.
Before reading the book, I had no clue about the fact that Samsung is more profitable than Netflix (let’s include it in FAANGs?) and manufactures roughly 1 out of every 3 mobiles in the world. In fact, it ships more smartphones than Apple while at the same time, also pocketing about $100 for every iPhone sold, according to one estimate. Reminds me of ‘Heads I win, Tails you lose’. :)
How come a company known in early 1990s for supplying hardware (displays, memory chips etc.) of rather dubious quality, went on to beat a giant like Sony among others and also give Apple a good run for its money over the next 2 decades? The answer lies in a combo of visionary leadership, having audacious ambition and spending millions on doing R & D at breakneck speed as well as high profile marketing campaigns in North America (tie-ups with telecom carriers and Jay-Z; famous Ellen DeGeneres selfie during Oscars ceremony 2014). Sure, it did end up biting more than what it can chew at times, but more on that later.
One of the key takeaways of the book is the importance company culture can play in growth or decline of a company. Samsung (being from South Korea where organizations are relatively more hierarchical) has had a hard time fighting parts of its legacy in order to challenge its competitors in the Silicon Valley. e.g. In mid-1990s, it realized that the quality of its electronic parts manufactured, was far from satisfactory. The then Chairman, knowing well that it’s not going to be easy to inculcate obsession with good quality, asked employees to “change everything except your wife and children”. To drive home the point, employees were gathered in the middle of a square and their own built goods worth millions of dollars — most of them faulty and defective — were burnt in a large bonfire. Despite the message being hammered loud and clear repeatedly from the top guy himself, it took years to turn it around.
The book mentions a hilarious episode when a renowned design expert, while training Samsung employees, gave the example of a banana as a metaphor for good design: simple, beneficial, eco-friendly etc., in order to encourage employees to start thinking out of the box. One of the people attending the session, interrupted him to ask: “Do you want us to design a smartphone in the shape of a banana?” Another incident is about a fascinating conversation between the old patriarch of Samsung and a rather young and rebellious Steve Jobs, exploring a possible partnership, almost 20 years before the two companies spent obscene amounts of money filing lawsuits against each other. You have to read the book yourself to know more about it and get that thrill. It’s worth it.
If the story so far sounds too good to be true, as if the company decided to become a paragon of virtues, competed fairly on a level playing field and despite repeated slips, eventually outsmarted others purely on better product, well not always. Full credit to the author of the book here, in ensuring that the not-so-pleasant aspects of the company and its phenomenal rise, also get highlighted.
To begin with, Samsung is much more than just a profitable company in South Korea. It’s a symbol of the national pride and is often referred to as the “Republic of Samsung”. So far so good. But given its impact on country’s tax revenues and solvency of banks, it is considered too-large-to-be-allowed-to-fail and the company seems to have taken undue advantage of this fact in the past. It’s a family owned company and on more than one occasion, Chairman of the day has been convicted for offences as serious as tax-evasion, perjury and destruction of evidence, yet managing to get away because of the sentences being either commuted or pardoned by none other than the country’s President. Samsung has a reputation in that part of the world, to be a secretive corporation having extreme reverence for the owners’ family. Succession plan in the last few years has only lead to shady mergers between different group companies. Any attempt by active shareholders to oppose or even question such dubious deals, has been dismissed by Samsung as a “jewish conspiracy” alluding to origins of the fund manager Paul Singer (Elliott Management).
Samsung has had more than its share of failures too. The book describes in detail, its failed foray into becoming a software giant planning to come up with an alternative to Android. Another example is that of Samsung getting a lot of bad press due to many reported incidents of Galaxy Note 7 devices catching fire in 2016. Among other reasons this was widely regarded as a result of often brutal and unrealistic deadlines set by the company to beat Apple in terms of launching the product first. More importantly, where Samsung really let many of its admirers down is the way it handled the crisis instead. After being in denial mode for so long, it subsequently tried to attribute the goof up to two different battery making units alleged to be faulty. One of the commentators at the time cheekily described this official explanation to be “as plausible as two different meteors falling (only) on your house (and that too) at the same time”.
To summarize, this is a very well researched book on one of the most successful and profitable electronic hardware manufacturing giants on the planet. Despite covering the company for many years, the author has managed to retain quite a balanced perspective of the fascinating journey of Samsung: from being a mere parts manufacturer for Motorola/Apple/Sony to eventually beating most of them at their own game, battling against great odds including deep entrenched culture, setting super hard targets and then slogging to achieve them, winning more often than not, while also paying a hefty price for occasionally cutting corners along the way.
Grab this book here. I have a feeling you are going to like it.
Happy Reading.. !
