South Korea’s retail giant Lotte Group needs to undergo innovative changes and portfolio revisions to respond to the post-COVID-19 market changes, the group’s chair said in a call to action, according to company officials Thursday.
Chairperson Shin Dong-bin also sent out a reprimanding signal to executives for failing to defend the group’s previous lead in the retail market.
“The sluggish management indexes amid the COVID-19 crisis last year indicate that we failed to unleash our full potentials in the market,” Shin was quoted as saying via a video conference at the Value Creation Meeting with the group’s affiliate CEOs on Wednesday.
“Those that succeed in the post-crisis era are those that manage to achieve innovation during crisis. This is why we should thoroughly ready ourselves for the second quarter when the pandemic is expected to die down.”
As key values for the nation’s fifth-largest conglomerate, the chief official underlined specific vision, bold investment, and strategy-based action.
“Portfolio adjustment may be considered for companies that fail to innovate themselves,” Shin said, alluding to another round of extensive performance-based reshuffle. “A company that only pursues survival has no future.”
In November, the group carried out an earlier-than-expected executive reshuffle, replacing the chiefs of 13 out of its 35 affiliates, many of them being relatively young figures in their early 50s. It also drastically reduced the range of executive promotions, displaying the emergency faced by the retail-focused group amid the pandemic fallout.
The Lotte chief also sent out what appeared to be a warning message to CEOs and executives, urging them to break free from the authoritative organizational culture and to embrace innovative thinking.
“The reason that some of our business sectors have struggled despite our previous lead in the market is the lack of action, not lack of strategy,” he said.
“In order for investment to lead to actual results, it is crucial that (executives) perform the right actions according to strategies.”
He also stressed the need to take ESG factors -- environment, social, governance – into consideration when setting up visions and strategies.
“In past crises such as the International Monetary Fund bailout (in 1997) and the Lehman Brothers situation (in 2008), Lotte came up with meaningful achievements through bold decision-making,” he said.
Vowing to set a model example himself, Shin pressed the group’s ranking officials to face the incumbent crisis and to make a breakthrough by any means.
By Bae Hyun-jung (firstname.lastname@example.org