The chief executive officer (CEO) must predict changes in the management environment five and ten years ahead and plan what to do now and three years later.
Shin Dong-bin, chairman of Lotte, made this request to the heads of subsidiaries during the Lotte second half of the year Value Creation Meeting (VCM) held from the 16th to the 17th at the Lotte Human Resources Development Center in Osan, Gyeonggi Province. He emphasized the need for strategy development based on future predictions and securing rapid execution in line with the rapidly changing times.
Approximately 80 executives from Lotte Group’s major subsidiaries, including Chairman Shin Dong-bin and his son Shin Yu-yeol, head of future growth, attended this VCM, which took place from around 10 a.m. the previous day until around 3 p.m. that day. They conducted a 'marathon meeting' while all lodging and meals were arranged internally over the two-day period. Observers noted that this reflected Chairman Shin's serious awareness of the crisis surrounding the Lotte Group.
The recent VCM was reportedly conducted in a consistently serious and heavy atmosphere. It began by reviewing the first-half performance and sharing operational policies for the second half of the year. External lectures under the theme 'the power to move brands and consumers' were presented, along with presentations focused on strengthening fundamental competitiveness by the heads of various business units such as food, distribution, and chemicals.
Afterward, the Lotte Future Strategy Research Institute presented innovative solutions for sustainable growth, while Lotte Ventures discussed innovations through open innovation with startups. Participants then held discussions on the topic of the 'group’s medium to long-term growth strategies.' They shared insights on the directions of changes in related industries by business unit and the impacts on the company, and aimed to deeply discuss new directions that could shift the industry paradigm away from existing successful methods.
Chairman Shin objectively evaluated the group's performance for the first half of the year and emphasized the recovery of fundamental competitiveness in core businesses as a prerequisite for improving key management indicators. He urged all CEOs to approach their work with a sense of heavy responsibility.
Chairman Shin also mentioned the importance of management from the 'PEST' perspective. This is a tool that analyzes the external environment of corporations based on political, economic, social, and technological factors. It is used to assess the impact of macroenvironmental factors on business.
Chairman Shin stated, 'A fatal mistake in corporate management is ignoring problems while knowing there is one or failing to recognize a problem as a problem,' adding, 'CEOs must predict changes in the management environment five and ten years ahead and plan what to do now and three years later.' He also requested the preparation of talents and technologies necessary for implementing strategies.
Chairman Shin presented the following management policies for the second half of the year to subsidiary CEOs: ▲Enhancing brand value ▲Accelerating strategic initiatives by business unit ▲Improving productivity. He stated, 'Brands are the foundation of our business competitiveness and an important value accumulated over a long period.'
Additionally, Chairman Shin requested that the currently pursued strategies by business unit be executed with speed. The chemical business is to focus on rapid improvement in business structures, while the food division emphasizes strengthening the brand of key products. He asked for thoughts on how to meet diverse customer demands in the distribution sector.
Chairman Shin emphasized that to increase productivity, employees' job expertise must be strengthened and a performance-based personnel system should be established. Previously, Lotte Group announced plans to expand a 'job-based HR (human resources)' system that compensates individuals differently based on their assigned tasks and expertise to the entire group.
He also urged the active use of artificial intelligence (AI) to foster a challenging organizational culture and improve work efficiency.
Chairman Shin emphasized that the management environment is constantly changing and offers both risks and opportunities, urging proactive management of change. He also stated, 'Not even attempting is equivalent to failure.'
Finally, Chairman Shin reiterated the importance of recovering fundamental competitiveness, concluding the VCM for the second half of the year with a plea for everyone to join him in stepping forward for the group's future.