The Twins of Innovation and Tradition | A Story of Samsung

The innovators of today are the traditionalists of tomorrow.

If you were ever to take a walk down memory lane, at the numerous World Heritage Sites that are preserved all over the globe, you must understand that it is not a no-longer relevant past that you’re looking at; but a past that was revolutionary for its time.

The innovators of yesteryear fought long and hard to create change in an unyielding world. In the wake of their success, a new status quo emerged. The principles and pragmatic ideals that underpinned their success stories were lost and it appears that all that remains is a structure and an order that their successors were asked to maintain, preserve and perhaps even protect.

To be an innovator is not simply about disrupting the status quo, but to apply discernment regarding the aspects of tradition that no longer work and that need to be re-birthed with time, effort and hard work.

In each generation and each age, innovators are born. Sometimes the impetus to change comes from within, and sometimes the opportunities emerge through an external crisis or series of crises. In either case, to stick to the status quo is to be on a ship that is destined to sink either slowly or suddenly–but surely.

Innovation is not always something that comes from the bottom in an attempt to dismantle the leadership structure that disallows growth. Sometimes, innovation comes from the top–catapulted forward by a courageous leader who knows that if the people under his or her care ignore the tides which are well on their way, they do so at their own peril.

Sometimes, it is far safer to take a risk than it is to maintain what was there before you arrived on the shore. Nevertheless, innovators have to be mindful of the chaos that can be left in the wake of revolutionary changes. If all we are left with is a vacuum, we will not be able to create that brave new world that awaits us.

For the past few years, I have been studying the stories of the leaders who come from ‘traditional’ cultures. Their innovation journey is not one of blatant and rampant destruction of the status quo, but instead one of gradual and methodical change that takes into account the long-term benefits of transforming a society that could easily stagnate. They are not leaders who care about the popular vote; for if they did, they would not have left their mark.

Rather, they are the leaders who were perhaps chosen, to lead a people into new territories and terrains—so that they may thrive in an unyielding world where change is the only ever constant.

A Story of Samsung

Back in the days of analog, Samsung lagged behind Japanese electronics companies, but Chairman Lee dreamt of Samsung outdoing them in the digital age through aggressive and preemptive investments.

In the analog era, cumulative knowledge and experience took priority over innovation. As a result, latecomers on the scene faced significant difficulties catching up. In the digital era, however, new types of competencies were required. The rules of the new game: creativity, speedy adaptation and the technological convergence of previously unrelated fields.

In 1996, Lee Kun-Hee, the chairman of Samsung Group, became exasperated by the company’s lack of innovation. He concluded that in order to become a global company, Samsung needed expertise in design. Samsung aggressively invested in digital technologies, changing its strategy and management system. Due to the company’s early entry into the digital electronics market, Samsung’s prior disadvantage as a latecomer during the analog era disappeared.

Samsung–a South Korean multinational conglomerate headquartered in Seoul–is the country’s largest chaebol business conglomerate. First founded in 1938 as a trading company, the group diversified into areas that include: food processing, textiles, insurance, securities and retail. Over the following three decades, Samsung entered the electronics industry in the late 1960s and the construction and shipbuilding industries in the 1970s: the two sectors that would drive its subsequent growth.

East Asian companies are known to be driven by deep-rooted efficiency-focused management practices. Post WWII, there was a trend in Asia towards emulating the Japanese-style corporate culture and shifting to an innovation-focused culture was not a trite matter–neither on the engineering front nor the cultural front.

To put down the twin pillars of innovation and tradition while maintaining productivity and competitiveness is no easy task–regardless of the cultural context that a firm is operating in. Engineers and designers don’t often see eye-to-eye, not even in cultures that espouse innovative ideals.

Leaders of large organisations are–for the most part–far more invested in the status quo than they are in ideas that may not translate into profit. The more traditional a corporation or culture is, the more risk-adverse it grows with time; and learning to make room for experimentation and failure is not something that those with a track-record of success are accustomed to dealing with.

Creativity is a slow, arduous and torturous process. In large corporations, the process of creativity is further exacerbated by long-standing procedures, processes and protocols. Even if the merits of an innovative idea is applauded, it must still get the seal of approval by a variety of stakeholders that include: engineers, programmers, user-experience experts, team leaders, managers and even suppliers.

Large corporations tend to attract personnel who look for financial and employment stability. The natural inclination is thus is to steer the organisation to remain in safe waters through tiny incremental–and quite often meaningless–changes; rather than risk the potentially gut-wrenching territory of innovation. Once a business is established, leaders are far more likely to grow protective over what has been built; as opposed to venture forth into new territories.

If failure is not an option, then innovation simply cannot happen.

But the leaders at Samsung took a risk. A risk that ended up paying off in a big way. Firstly, Samsung introduced ‘Outsiders’ into a homogenous workforce. East Asian nations are, for the most part, linguistically and ethnically homogenous. By doing away with certain Confucian traditions–for instance, reverence for elders–Samsung introduced merit-based pay promotion that put young people in positions of authority. By allowing those who were unfamiliar with the company’s culture into the business, they were laying down the foundation to be a global—as opposed to a local or even regional—powerhouse.

Was it, by any means, an easy journey? It never is.

While some erroneously assert that the Japanese hierarchical labor model suited the Korean context, I disagree with this view entirely. Nations that have succeeded in the postcolonial era have done so without completely dismantling the structures of their predecessors. When Samsung was founded, South Korea was a Japanese colony and Samsung’s first chairman was educated in Japan. But in the wake of freedom, preexisting structures no longer carried the same weight they once did. The relationships and structures that existed within and between the countries of East Asia were undergoing a long and overdue metamorphosis.

But being a global brand is not just about succeeding in your home or regional market, but learning to navigate new territories and terrains. To compete–and succeed–outside its home base, Samsung needed to engage with the world. Hanging onto the status quo would have not only impeded their growth, but also led to stagnation on the home front.

Even with strong support from the C-suite, a company’s designers can continue to face challenges. Historical cultural norms aside, engineers and designers quite simply have different objectives, even when they are working towards the same collective goal. It is never easy to pluck out roots that run deep into the ground. It takes a great deal of discernment to weed out only what needs to be cleared and not to upend the whole tree at once.

In the case of Samsung, results were carefully measured and if resistance was too strong, the company delayed adoption, modified the practice, or—as was the case with stock options—abandoned it entirely.

Over two decades have passed since Lee’s fateful decision in 1996. Samsung currently competes with the world’s best companies across diverse product groups. Its competitors include: Apple, HP, Sony and Dell amongst others. The paradox when it comes to Samsung success is that it remains a highly diversified and vertically integrated company; allowing it an edge over its competition that is largely highly-focused and specialised.

Management scholars have noted that the Japanese management style is incompatible with the American one and that attempting to reconcile the two is counterintuitive and will lead to negative results. But perhaps this stems from a reluctance on the part of Western institutions to make room for the validity and viability of Eastern traditions.

Samsung has managed to successfully combine the American and Japanese corporate structures while retaining its own Korean way of doing business. The company’s own distinctive corporate culture is also a key factor—which has allowed the conglomerate to create a global brand that is now also a household name.

Innovation and Tradition

Perhaps it is not so much that the innovators of today who will be the traditionalists of tomorrow; but rather the traditionalists of today who will be the innovators of tomorrow.

We do not need to throw our traditions away in the name of innovation, but instead, we can choose to employ discernment regarding the traditions that must go and the ones that must continue on. To do that, requires a deep understanding of our forebears as well as an openness to a new modality and way of life that did not exist previously.

Tradition is about honouring the past. Innovation is about creating the future. There is no reason why we can’t do both. As long as we remain sensible, we will be ready to venture forth when that tide emerges on the horizon and beckons us to heed its call.