Chairman Shin Dong-bin's Right Hand, Vice Chairman Hwang Kak-gyu Resigns... Why Lotte?
Successor is Lee Dong-woo, CEO of Hi-Mart
Holding Company Organization Also Reduced by Half
[Asia Economy Reporter Lim Hye-seon] The first 'summer personnel reshuffle' announced by Lotte Group on the 13th was severe. Hwang Gak-gyu, Vice Chairman of Lotte Group and a '40-year Lotte man' (66), took responsibility for the deteriorating performance of the affiliates and retired from the front lines of management. The group's brain organization, Lotte Holdings, was reduced by half. The top management of the holding company was also replaced. This was a decision by Shin Dong-bin, Chairman of Lotte Group (66), to instill a sense of crisis throughout the group that if changes are not made, it will be left behind.
On the 14th, a senior official within Lotte Group said, "This personnel reshuffle shows Chairman Shin Dong-bin's determination to change the very DNA of Lotte Group," adding, "By completely replacing the top management and putting young talents at the forefront, the meaning of this reshuffle is to strengthen the role of the holding company in discovering future growth engines and to swiftly execute Chairman Shin's management vision."
Since switching to an 'emergency management system' at the end of October last year, Chairman Shin has replaced 22 affiliate CEOs. He emphasized that to survive, one must become a 'game changer' who changes the market framework themselves. At the first executive meeting (VCM) earlier this year, he sent a strong 'warning' to the executives with a stern voice, saying, "I will not tolerate a mediocre culture."
At the emergency management meeting in March attended by executives of Lotte Holdings and group BU heads, he urged, "We need to review our business strategies." In May, he stressed, "We are at a historic turning point due to COVID-19," and warned, "We must not have a complacent mindset of just getting through this crisis." Despite Chairman Shin's relentless calls for change, Lotte Group could not escape poor performance. The group's two main pillars, distribution and chemicals, posted their worst results in the first half of this year following last year.
He demanded a 'group improvement plan' from the holding company's management. Although Chairman Shin expected 'change' and 'innovation,' the results fell short of expectations. Ultimately, Chairman Shin took decisive action. The group explained the personnel changes by saying, "Young and new leaders were needed to respond quickly to the rapidly changing management environment."
Chairman Shin appointed Lee Dong-woo, CEO of Lotte Himart (60), as the successor to Vice Chairman Hwang. Lee is known within the group for his strong execution skills, organizational control, and loyalty to Lotte. He was highly evaluated for being the only affiliate to improve profitability despite the COVID-19 pandemic.
The holding company reorganized the Management Strategy Office into the Management Innovation Office and downsized it. Lee Hoon-ki, Executive Director and CEO of Lotte Rental, was appointed as head of the Management Innovation Office. The current head of the Management Strategy Office, President Yoon Jong-min, will move to become the head of the Lotte Human Resources Development Institute.
Some affiliate CEOs were also changed. Kim Hyun-soo (64), CEO of Lotte Property & Development, will move to become CEO of Lotte Rental. Ryu Je-don (60), secretary to the CEO of Lotte Holdings, has been appointed as the new CEO of Lotte Property & Development. Jeon Young-min (53), head of the Lotte Human Resources Development Institute, will take on the role of CEO of Lotte Accelerator. Hwang Young-geun (53), head of the sales division, was appointed as the new CEO of Lotte Himart.
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