Determined to counter the lackluster reputation of its electronic products, in the mid-'90s Samsung launched the equivalent of a design "race to the moon" by establishing an in-house "university" and putting its designers through an intensive course in global design processes. Today Samsung is acclaimed for its innovation and style.

Six years ago it was unthinkable that Samsung could pose any threat to leaders in the consumer electronics business. The Korean conglomerate was hardly known for breakthrough products. Its global reputation was based on manufacturing memory chips and selling cheap, knock-off microwaves and TVs through discount retailers.

Fast-forward to 2003. Samsung is setting the industry standard for innovation and cutting-edge design in VCRs, DVD players, TVs, LCD monitors and mobile phones. The sheer pace of new electronic product offerings is staggering: This year Samsung launched 100 new products in the U.S., including 53 new TVs. Over the past five years, Samsung has earned 18 industrial design awards; last year alone it won five from Business Week/IDSA, a total matched only by Apple Computer.

So what changed? The roots of Samsung's transformation began in 1994 when Samsung chairman Kun-Hee Lee set out to reposition the company to sell superior quality branded electronic products at higher price points. To do that, he felt Samsung had to nurture a global design vision that would produce products with greater international appeal. Although the Samsung Electronics unit had a sizable in-house design staff and worked with the world's leading design consultants, the results were inconsistent at best. In search of the reason, Chairman Lee asked a Japanese design consultant to audit the strengths and weaknesses of Samsung's design program. The conclusion was that Samsung already had a staff of world-class designers; the problem was in the process. Chairman Lee, who had lived in Japan and the U.S. during his college years, concurred. In a book, speeches and newspaper articles, he urged Samsung managers, and South Koreans in general, to see the opportunities and profits resulting from good design. Believing that Samsung Electronics' design impetus would have to be developed from within, he sent a 17-person delegation to the Art Center College of Design in Pasadena to discuss the possibility of creating an internal design institute in Seoul. Among those attending from Art Center were Gordon Bruce, a well-known industrial design consultant who was then serving as Art Center's liaison in Japan, and James Miho, a noted graphic designer who was then chairman of the College's Graphic, Packaging and Electronic Media Department.

Following the meeting, an Art Center team paid a return visit to Samsung facilities in Seoul, during which time Bruce was asked to serve as chairman of Product Design and Miho as chairman of New Media for the soon-to-be Innovative Design Lab of Samsung, now known as ids. Bruce recalls that Chairman Lee honored them with an invitation to his home for dinner. "While we were sitting in his livingroom, Chairman Lee asked us to educate his designers and make them more mindful of relevant global and cultural issues." Bruce adds that Chairman Lee sought to raise creativity levels by 3% [i.e., increase sales results by 3%].

Chairman Lee backed up his request by constructing a $10-million, eight-story building in Seoul to house ids. A select group of "students" was chosen from Samsung Electronics' designers to participate in the inaugural program. In the first three years of ids, the students came out of the company's best ranks of 250 industrial, transportation and multimedia designers. In the fourth year, employees in marketing, engineering and other related departments were invited to join. Classes were taught in English, in accordance with Chairman Lee's belief that it is a necessary skill in global business. (Before classes began at 9 am, students had already logged in two hours studying English.) For a full year, the Samsung staffers were paid their normal salaries to study six days a week.

Bruce says that, initially, the plan was to follow Art Center's standard western curriculum, but after moving to Seoul, Bruce and Miho quickly realized that courses based on an American (or even European) program would not meet the real needs of the Korean designers. A key reason, Bruce says, was because the Neo-Confucian Korean culture taught that it was disrespectful to ever question the "master," so the substantive dialogue between student and teacher was absent. Bruce saw changing that attitude as critical to changing the way Samsung employees approach design innovation. Then too, Bruce adds, "I was teaching people with 10 years of experience who had already won design awards. It's not like teaching them how to do marker sketches. That was not going to serve them."

In the end, the ids curriculum was kept flexible but specific. "We didn't teach them how to design, but focused on the foundation of what design is all about," says Bruce. "This addressed a lot of issues."

One of those issues involved drawing upon national heritage as a source of inspiration. "The Koreans want to look like everybody else. They want to take a little bit of Japan, a little bit of America, a little bit of Italy and put it all in one, so that it gives this sense of 'leading edge-ness,' " Bruce says. "We wanted themto see that they need to seek their own soul and use that excellence. What is it about Korea that makes it special? Designers can often develop processes based on abundant design research, ethnographic observation, ergonomics, marketing, engineering, manufacturing, etc., but if they have no understanding about where they stand in the continuum of cultural history, all the processes in the world will not help achieve relevant solutions."

In starting upon that path to self-discovery, Samsung designers would first need to look beyond Korea. "To understand who you are, you need to get out of your environment," Bruce stresses. "I think it was Einstein who said, 'I don't know who discovered water, but it wasn't a fish.'"

Bruce and Miho created a global design workshop where ids students traveled extensively, experiencing history in museums and observing daily life in places like New York City, Florence, Athens, Beijing, Mexico City and Washington D.C. That exposure helped Samsung designers strengthen their understanding of consumer behavior around the world, while nurturing an appreciation for what was uniquely Korean.

Course offerings also included fundamentals like ergonomics and mechanical engineering. "A shortcoming of the Samsung designers was that they viewed their craft in terms of form, not content," says Bruce. "They had limited communication with the company's engineers who, because of that, had final say in executing an idea." A recent change is that design teams now collaborate closely with Samsung market researchers, engineers and manufacturing experts. Samsung's Creating New Business group constantly runs focus groups and conducts user research to ascertain consumer taste as far out as five years in the future.

"Because of design's unique characteristics, designers should be able to respect each other's opinions and share their ideas without any hierarchic restrictions," says Kook Hyun Chung, vice president of Samsung Corporate Design Center. "In the beginning of the program, designers cared a lot about their positions (like assistant designer, designer, senior designer or principal designer) and were unable to discuss their ideas with those in other positions. However, as they went through the ids program, they opened their minds to others and changed their attitudes."

Today Samsung Electronics has 380 designers, almost double the size of its staff five years ago. What's more, compared to Samsung's former strategy of using an unrelated collection of design offices and consultants, it has achieved greater control by selecting fewer, more appropriate consultants. The company now has four design centers outside Seoul in San Francisco, London, Tokyo and Los Angeles, with another center opening in China soon.

A keystone in Chairman Lee's declared "design revolution," the ids program has been part of a larger strategy aimed at addressing a changing marketplace. "In the 21st century, companies became unable to differentiate their products only by technologies or quality of a product, and design was considered as one of the most important factors to succeed," says Samsung's Chung.

That was the message when Samsung launched its first branding campaign in April 2001. While competitors emphasized features and functionality, Samsung's fashion-forward TV commercials showed off the company's cool sense of style. The spots showed MP3 players and cell phones launching users into a psychedelic landscape of good times, a place "where design awakens all your senses." The pitch worked: Brand awareness and preference in the U.S.-which had been one of Samsung's weakest markets-increased from 56% to 74% over the life of the year-long campaign.

In its overhaul of marketing, Samsung Electronics wins praise for instilling a sense of common purpose and strategy. The company consolidated its global roster of ad agencies from 55 different entities to one-FCB Worldwide, New York. Internally, Samsung installed a new collaborative system that weaves strategy initiatives around the globe through different consumer touchpoints ending at retail point of sale. Samsung's executive vice president of global marketing operations, Eric Kim, is credited with bringing American flair to a country not known for marketing glitz. Born in Korea, Kim grew up in the U.S. before returning to Korea in 1999 to take the top marketing job.

Earlier this year, Interbrand declared Samsung as the world's "fastest growing brand" for the second year in a row, ranking it as the 25th largest brand, up from 42nd place in 2001. "Samsung has successfully made brand building the key focus of its marketing strategy, including product development, selection of distribution channels and channel marketing as well as external and internal communications," underscores Jan Lindemann, Interbrand's global marketing director.

The new emphasis on branding also extends to products themselves. Previously, for instance, Samsung would manufacture appliances for the label of other companies; today 75% of its products are sold with the Samsung logo. In addition to product design and marketing changes, Samsung has shifted its distribution channels from budget alternatives to higher-end retailers like Best Buy and Circuit City.

In recognizing that speed to market is critical in attaining the competitive lead, Samsung Electronics has stripped layers of bureaucracy needed to win approval for new products, budgets and marketing plans, accelerating its ability to respond to new opportunities. Samsung says it now takes an average of five months to go from concept to product rollout, compared to 14 months six years ago.

As a result, Samsung stands out from competitors by its quick response to both technological improvements and fickle consumer tastes.

"Intellectual assets will determine a company's value in the 21st century. The age when companies simply sell products is over," says Chung. "In the new era, enterprises have to sell their corporate philosophy and culture. An enterprise's most vital assets lie in its design and other creative capacities...Let us focus our strength in developing unique designs that reflect the Samsung philosophy and soul."