[THE INVESTOR] Apart from its smartphones, there is something that tech giant Samsung Electronics is well known for: human resources practices to groom employees into “royal” and high performing, managers.
Many say that the firm’s HR policies and practices were what made Samsung one of the largest conglomerates in Korea.
After participating in courses of an on-the-job training program, for example, new Samsung employees often transform into the so-called “Samsung Man,” which carries a connotative meaning that they are special and superior.
Lee Jae-il, head of Samsung’s in-house startup accelerator Creativity & Innovation Center.
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The tech juggernaut also effectively utilizes a carrot-and-stick approach, rewarding high-achievers with large bonuses while punishing poor performers.
In the fast-changing business landscape, however, the company is now trying to seek breakthroughs both within and outside the company as it plans to nurture 500 startups over the next five years -- 200 in-house and 300 outside startups.
“Managing its employees effectively was what used to represent Samsung’s identity, but creativity is now the engine behind its growth,” Lee Jae-il, head of Samsung’s in-house startup accelerator Creativity & Innovation Center, told reporters who visited Seoul National University on Oct. 17. Samsung jointly runs a startup incubator project with the Seoul-based university.
Lee said that the C-Lab startup program, launched in 2012 to nurture in-house ventures, is positively changing the thinking of Samsung executives and employees.
“In the past, five out of 10 Samsung employees said the company fosters creativity, but now nearly eight out of 10 say so,” he said.
The tech giant spun off 34 companies this year, and two companies -- EVAR, which produces an autonomous robot that automatically charges electric cars, and GoBreath, a lung recovery solution startup -- are scheduled to graduate from the company’s startup program this month. The number of spin-offs will reach 40 by the end of this year, according to Samsung.
For the past six years, 917 Samsung employees took part in 228 projects run through the C-Lab program. Among the projects, 180 have been completed and 36 have been spun off, creating 170 new jobs.
It will select around 100 fledgling companies a year for the next five years and give financial support of up to 100 million won (US$88,200). Those selected for the startup program can use working spaces at Samsung’s offices in Seoul or startup incubation centers in Daegu City and North Gyeonggsang Province. Samsung also runs consulting programs to help entrepreneurs find business partners, establish retail channels and deal with legal issues.
Relumino, which rolls out visual aid applications and glasses for people with low vision, and Ignis, maker of portable thermal cameras for firefighters, are two of the C-Lab graduates that have come into the limelight recently for their innovative products.
The company said it wants startups from more diverse segments, including artificial intelligence, fintech and health care, to join its startup program.
For some C-Lab participants, the support program means a new opportunity.
“I hope that participation in Samsung’s startup support program can lead to a joint project to give help to children with developmental disorders in less developed countries,” said Choi Ye-jin, CEO of Dobrain, a new C-Lab member startup which develops affordable educational applications for children with developmental disorders.
By Kim Young-won (firstname.lastname@example.org)