Could HR Have Saved Them? Exploring the Samsung Galaxy Note 7 Disaster

My forthcoming book, Unleashing Capacity: The Hidden Human Resources (2016) addresses a great many tools to help HR managers understand the innate importance of running HR like a business. As a strategic partner to the C-suite, we should act as the canary in the coal mine, warning of market conditions that can jeopardize the longevity of the company, possibly crippling it from any number of angles.

It’s why I want to raise the question of any possible HR guidance that may or may not have been given (and/or widely accepted and/or ignored) when it comes to the widespread Samsung Galaxy Note 7 issue. The company faces long-term reputation damage and sure hits to their bottom line. But could HR have saved them?

A recently article/think piece in Fast Company sheds great light on one certain fact: the issue is most definitely one of leadership. The issue from the consumer side is quite simple and not the least bit angering: The Samsung Galaxy Note 7 was rushed to market ahead of the release of the iPhone 7 this September, and all of a sudden 35 customers reported cases of the batteries exploding. Not just catching fire, but causing explosions of the small bomb variety. Customers pants were catching fire on airplanes, cars and homes were severely damaged or destroyed, some customers received physical injuries.

The company then, instead of issuing a recall, offered an “exchange program” through which customers could return the device and receive a new one, ostensibly with a new, better, non-explosive battery. But when those phones started exploding and catching fire as well, the company has to halt production on the phones and offer full refunds for the devices. The reputation of the company is damaged, and customer loyalty is soon to be challenged, with many customers expected to defect to Apple.

When you stop to think about HR’s role in this, I would hope that moving forward it would be greatly increased. The Galaxy Note 7 accounts for 10% of the brand’s total sales, and if consumer confidence is shaken in this device after no clear answers about the safety of the battery, entire product lines could suffer drops in sales. Profitability could be greatly harmed. And this is where HR can take the reins and increase their presence in leadership.

One of the tools we have at our disposal is looking at the profitability impact of HR’s decisions. We can see the effects on the bottom line when speaking about strategic deployment of resources, the training and development of our leadership, and how our talent acquisition strategies impact the bottom line. We are most certainly within our bounds to make strong suggestions on how to move forward, from possibly placing someone else in charge of the rebranding efforts to recommending a redeployment of resources from the production of the faulty device to other projects or products.

There is no time to waste: they must keep an eye to the future while working to mend the present, but their capacity is at stake, and they must move quickly to reassure consumers and to rebuild trust, or worldwide sales could plummet. HR has much skin in the game, and I hope they act quickly.

As the owners of the business of HR, when our main client — the company we support — is in trouble, it’s our job to figure out how to use our skills and resources to stop the bleeding and restore homeostasis to the living, breathing tissue that is our corporation. But after that’s handled, we must stand in front, leading the organization into the next evolution of the corporation. It’s where I hope HR gets deeply involved at Samsung, and where tools such as my Capacity Framework can be deployed to ensure everyone is linked around the new corporate mission.

With decades of HR experience, it’s my belief that if HR could have saved them and wasn’t able, it’s critical they listen now. The very future of the company and all its constituents hangs in the balance.

 

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