"Break Away from Moderation"... Lotte's Shin Dong-bin Calls for a 'Game Changer'

2020 Lotte First Half VCM Held on 15th
Chairman Shin Dong-bin Criticizes Poor Performance in Distribution and Chemicals
"A 'Winning Culture' Shared by All Employees Is Needed"
Calls for Change from Old Methods... "Discard Prejudices"

Shin Dong-bin, Chairman of Lotte Group

[Asia Economy Reporter Minyoung Cha] “To achieve change, it is essential to establish a flexible organizational culture where communication among employees is free and to instill a strong will for change in the staff, but there still seem to be shortcomings.”

At the first executive meeting of the year discussing Lotte Group’s one-year business plan, Chairman Shin Dong-bin directly criticized the executives. He delivered harsh words regarding the poor performance last year across the group’s affiliates, including the core distribution and chemical sectors. He also emphasized that for fundamental organizational change amid the crisis in the distribution industry, a 'winning culture' must be firmly established among employees.

On the 15th, Lotte held the 2020 Lotte First Half Executive Meeting (VCM/Value Creation Meeting) at Lotte World Tower in Jamsil, Seoul. About 100 people attended, including Chairman Shin Dong-bin, affiliate presidents, Business Unit (BU) heads, and holding company executives.

At the final session of the VCM, standing before the CEOs, Chairman Shin said, “I don’t think I will be sharing pleasant stories today,” urging reflection on Lotte’s recent management performance and calling for a strong will for change. He expressed concern not only over the poor results of the group’s two main pillars?the distribution and chemical sectors?but also the slowdown in growth in other sectors.

Chairman Shin emphasized, “In this era of change, past success methods are no longer valid,” and urged, “Let us discard existing success stories, crisis management cases, and habitual work practices, and become ‘game changers’ who create new market frameworks ourselves.”

He pointed out, “The current economic situation is completely different from the foreign exchange crisis and global financial crisis we overcame in the past,” adding, “With low growth becoming the new normal, failure to properly respond to change could threaten not just sustainable growth but the survival of companies.”

He continued, “Global economic slowdown, power struggles between countries, and geopolitical risks are expected to persist, while paradigm shifts are occurring across all business sectors due to aging, low birth rates, polarization, and worsening environmental issues,” emphasizing, “To survive, we must not be frogs in a well. We ourselves must break existing molds and become ‘game changers’ who change the rules of the market.”

To this end, he said, “We must not cling to past success methods or be complacent with the current state.” Chairman Shin expressed doubt about whether the group still holds competitive strength today despite having grown to be number one in many business areas, stressing, “We must not fall into mediocrity.”

Regarding the large-scale executive reshuffle conducted at the end of last year, he said, “It was to quickly respond to change and prepare for the future by placing young leaders at the forefront,” urging the CEOs gathered to respond swiftly.

Additionally, Chairman Shin asked for a thorough analysis of profitability and future growth potential across all business sectors, and for resource allocation and investment based on this analysis. He also requested a rapid review of strategies if any parts are outdated, while encouraging bold investment for the future. He concluded his remarks to the CEOs by saying, “Do not shrink back despite the difficult environment, but actively challenge for the future.”

Meanwhile, since 2018, Lotte’s first half VCM has been a gathering of all affiliates to share the group’s new year goals and mid-to-long-term growth strategies, while the second half VCM is held by business groups to present current issues and mid-term strategies and explore future growth plans. At this 2020 first half VCM, the economic outlook for 2020, a review of 2019 group performance, and mid-term plans were shared. In addition, a talk concert was held where key executives from major affiliates driving Lotte’s DT (Digital Transformation) gathered to discuss the current status and future challenges of Lotte’s DT initiatives.

This content was produced with the assistance of AI translation services.