Samsung’s executives seem paranoid… and that’s a good thing

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Samsung Paranoia Analysis

Samsung Galaxy S 4 Event

The big Businessweek profile on Samsung (005930) makes for some fascinating reading, and not just because it details Samsung’s gleeful willingness to try anything and everything when it comes to smartphone form factors. The other part that really stands out from the piece is this: Samsung executives are extremely paranoid. And in case you’re wondering, I mean that as a compliment.

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Anyone who’s paid attention to the mobile world over the past five years understands that it is a remarkably unstable industry where market leaders are born and killed seemingly overnight. If you want some perspective on this, consider two-and-a-half years ago Symbian was still the most widely used mobile operating system in the world and that one-and-a-half years ago HTC (2498) was the No. 1 individual smartphone vendor in the United States. In such a whiplash boom-and-bust market, it’s wise to never feel too comfortable or to think that you’ve firmly established yourself as a dominant player.

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All of which brings us back to Samsung. It would be very easy to think of the company as yet another flash in the mobile pan that has risen out of nowhere and will just as quickly fall back into obscurity. But this sort of thinking misses two things: First, Samsung has always been a player in the mobile industry and the economies of scale it gets from its own manufacturing capabilities are an enormous long-term advantage that no other vendor can match. And second, the company’s executives seem frightened to death of failing and are doing everything in their power to keep themselves on their toes.

From the Businessweek piece, we learn that Samsung Chairman Lee Kun Hee forbids people in the company to bask in their own success and instructs them to always watch out for smaller competitors.

“Our major businesses can disappear in 10 years,” he apparently told his employees in 2010, despite having just gone through what one employee tells Businessweek was a “banner year.” Samsung mobile marketing chief DJ Lee also informs Businessweek that the chairman often tells employees that the company is in ”perpetual crisis” and that it is both “in danger” and “in jeopardy.”

This type of self-inflicted panic may not make for the world’s most enjoyable work environment, but it’s also a trait that highly successful companies possess, including most notably Apple (AAPL)  and Google (GOOG). After all, history teaches off that you’re better off being the CEO who’s constantly on edge about your competitors than being the CEO who breezily dismisses the significance of the iPhone and Android.


This article was originally published on BGR.com

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