Establishing the "Crown Prince" early and passing on to the most capable rather than to one's direct descendant is a tradition of Samsung. Originally, Lee Byung-chull, the first generation leader, did not pass on the family business to his eldest son but instead handed it over to his youngest son, Lee Kun-hee, who was considered the most decisive and had a style most similar to his own. Now, Lee Kun-hee, the second generation leader, has surpassed seventy years old, and Samsung once again faces the challenge of generational succession. As Lee Kun-hee's only son, the third generation Lee Jae-yong has entered the succession process. But will he successfully take over and continue Samsung's ever-changing survival strategy?
Lee Guangdou
"Death, taxes, and Samsung!" Koreans call these the three unavoidable things in life, vividly reflecting Samsung Group's influence in Korea. As a symbol of Korean brands, Samsung holds an extremely important position. The chairman of Samsung Group, Lee Kun-hee, is even known as the "Emperor of the Korean Economy."
Samsung was founded in 1936 and can be called a century-old store in Korea. One of the reasons it has developed rapidly across centuries and remained prosperous is due to its successful generational succession. The enterprise established by father Lee Byung-chull flourished under the hands of son Lee Kun-hee.
Samsung is a highly centralized company. In Samsung, when Lee Kun-hee speaks, no one dares to say the word "no." Although he possesses the dignity of an "emperor," what Lee Kun-hee excels at most is listening. On the first day Lee Kun-hee assumed the position of vice president of Samsung, his father Lee Byung-chull personally wrote the two characters "listen" for him.
In the 21st century, Samsung's rapid development benefited greatly from this highly centralized system and Lee Kun-hee's quality of being a good listener. When competitors were still repeatedly discussing which technology to develop, Lee Kun-hee made a decisive decision after listening to the opinions of multiple engineers.
Now, Lee Kun-hee has surpassed seventy years old, and Samsung once again faces the challenge of generational succession. After the new leader takes over, will Samsung continue its rapid development and replace Apple as the new dominant force in the mobile phone industry? Can the Lee family of Samsung escape the curse of "wealth does not exceed three generations?"
Succession Tradition: Passing on to the Most Capable Rather Than Direct Descendants
Lee Byung-chull did not pass on the family enterprise to his eldest son but instead gave it to his favorite youngest son. As the saying goes: "Three years old determines the future, seven years old determines the character." From a very young age, Lee Kun-hee was considered the most decisive among the three sons, with a manner of behavior resembling his father.
Lee Kun-hee was born in 1942 as Lee Byung-chull's seventh child, with two older brothers and four elder sisters. When he was born, Lee Byung-chull and his wife devoted all their energy to the development of Samsung and had no time to take care of him. He was sent to live with his grandmother in the countryside when he was just a few months old, so during his early childhood, Lee Kun-hee always regarded his grandmother as his mother.
To cultivate Lee Kun-hee, when he was only 12 years old, Lee Byung-chull sent him to Japan to study so that he could learn knowledge from developed countries. His lonely experiences during childhood shaped his mature personality and forged his unique way of thinking and perspective. Later, Lee Kun-hee was sent by his father to Waseda University in Japan and Washington University in the United States for further studies. Growing up alone in a foreign land made Lee Kun-hee determined and reflective.
Succession Relationship Studies: Inheritance of Networks
The inheritance of a company is not just the inheritance of wealth but also the inheritance of networks. Lee Kun-hee's grandfather joined the Christian Youth Association when he was young and became close friends with Syngman Rhee, who later became the founding president of South Korea. After the Korean War, the Lee family continued their relationship with the "Blue House," and Lee Byung-chull still frequently met with Syngman Rhee.
In addition, the greatest assistance Lee Byung-chull provided to Lee Kun-hee in terms of networking was finding him a capable spouse.
In 1966, shortly after Lee Kun-hee graduated from the University of Washington, his father arranged a marriage for him. An unusual airport blind date turned into a beautiful story. At the time, Hong Yeon-ki, the president of Korea's largest newspaper, the JoongAng Ilbo, and his talented daughter Hong Ra-hee, who was studying art at Seoul National University, visited Tokyo. Lee Byung-chull asked Lee Kun-hee to personally meet them at Haneda Airport. People arriving in unfamiliar places often develop a sense of favor towards those who pick them up, and with Lee Kun-hee's thorough and thoughtful reception, the two young people quickly fell in love and got married the following year.
This marriage not only provided Lee Kun-hee with a capable spouse but also established a strong alliance between the Lee family of Samsung and Korea's cultural media sector. One of the important starting points in Lee Kun-hee's career was serving as a director of the JoongAng Ilbo.
Succession Principle: Establishing the Crown Prince Early
As early as 1969, when Lee Kun-hee was only 27 years old, Lee Byung-chull had already written a will naming Lee Kun-hee as the successor to Samsung Group.
In 1967, Samsung Group was involved in the "saccharin smuggling scandal," forcing Lee Byung-chull to resign. In February of the following year, after resuming his position as president, Lee Byung-chull decided to cut off "Central Media" and "Samsung Manufacturing" to ease the group's difficulties. However, Lee Kun-hee strongly opposed this move, reasoning simply that "Samsung can only expand rapidly while maintaining its group advantages. Any weakening measure will negatively impact it, especially in these turbulent times!" It turned out that Lee Kun-hee's stance was far-sighted, and this incident prompted Lee Byung-chull to firmly decide to hand over the reins of Samsung to Lee Kun-hee.
In 1976, Lee Byung-chull was diagnosed with stomach cancer. Although he had already written a will regarding the successor issue, the ever-cautious Lee Byung-chull was still afraid that if the surgery failed, Samsung might fall into internal strife. Therefore, the day before the operation, he gathered the family members and formally announced his last wishes: "From now on, Samsung will be entrusted to Kun-hee."
Survival Doctrine: Change or Perish
Lee Kun-hee lived up to his father's expectations. In 1979, he served as vice chairman of Samsung and quietly observed and learned from Lee Byung-chull for eight years. In 1987, after Lee Byung-chull's death, Lee Kun-hee took over fully as the chairman. Despite being a genuine "rich second generation," Lee Kun-hee was extremely entrepreneurial. In 1988, during Samsung Group's 50th anniversary celebration, Lee Kun-hee announced the beginning of Samsung's "second entrepreneurship," aiming to become a world-class enterprise.
To get closer to the goal of becoming a top-tier global enterprise, he changed Samsung's traditional logo to the more international English name "Samsung." He shouted out the slogan "Everything must change except your wife and children" to those managers who stuck to old rules and were unwilling to change. To stimulate the vitality of "second entrepreneurship," he changed Samsung's long-standing "9-to-5" work schedule to "7-to-4." He believed this was the most energetic time for employees, allowing for more results and giving employees larger chunks of free time for learning.
At the subsequent Samsung Los Angeles meeting, a manager blamed all the responsibility for declining performance on his subordinates in his report. Upon hearing this, Lee Kun-hee became furious and directly expelled him: "How can someone like this occupy a high position at Samsung? I hate people who shirk responsibility the most."
Eternal Dilemma: New Generational Succession
As a family business, Samsung's equity structure is complex, and Lee Kun-hee's son, daughter, nephews, and nieces all have inheritance rights to Samsung. Although Lee Jae-yong is Lee Kun-hee's only son, his succession process has not been smooth.
In February 2012, just as the dust of Samsung's succession dispute had yet to settle, news broke that Lee Kun-hee's brother was contesting their father's inheritance in court, casting a shadow over Lee Jae-yong's succession.
Born in 1968, Lee Jae-yong, as Lee Kun-hee's only son, was born with a "golden spoon." Lee Jae-yong's educational experience is very similar to Lee Kun-hee's; he was sent to Japan and the United States to study at a very young age. In 2000, after completing his overseas education and returning to Korea, he founded 14 internet companies within three months, ready to make a big splash. Unfortunately, just one year later, the venture capital bubble burst, and internet companies quickly declined. Finally, several companies under the Samsung umbrella had to purchase the shares of the internet companies held by Lee Jae-yong to recover his dual losses in both economy and reputation.
In December 2012, after experiencing the patent war with Apple, Samsung announced the appointment of Lee Jae-yong as the group's vice chairman, resolving the previous disputes over whether the family heir or professional managers would take over. Lee Jae-yong officially secured the "Crown Prince" position.
Even now, some critics believe that Lee Jae-yong has grown up under the protection of Lee Kun-hee and lacks the leadership qualities, business vision, and entrepreneurial spirit of Lee Kun-hee. Starting a business is hard, but continuing it is even harder. How the "third-generation rich" Lee Jae-yong will perform in the future remains unknown. Whether he can lead Samsung to continue creating miracles still needs time to verify.
(The author is the founder of Hua Sheng Zhi Ye · Li Guangdou Brand Marketing Institution)