LG and Lotte Conduct Year-End Regular Personnel Changes, Marking the Start of the Business World’s HR Season
Massive Influx of Young Talent to Revitalize Organizations, Bold Organizational Restructuring
Underperforming Personnel to Be Let Go, Harsh Changes Expected
[Asia Economy Reporters Hye-seon Lim, Chang-hwan Lee, Dong-woo Lee] The year-end executive reshuffles in the business world have officially begun, led by LG Group and Lotte Group. Major groups have injected vitality into their organizations by appointing a large number of young executives to overcome internal and external management crises.
With the ongoing impact of the novel coronavirus disease (COVID-19) expected to continue next year, increasing management uncertainties, there is a strong will to overcome these challenges by infusing dynamic young talent. Conversely, organizations and personnel who have not delivered results are being decisively restructured, signaling a harsh shake-up.
LG Appoints Record Number of Executives Under 45
According to the business community on the 27th, the key phrase for the executive reshuffles at LG and Lotte, which conducted regular executive appointments the day before, is summarized as a "bold generational change." LG Chairman Koo Kwang-mo, who emphasized stability by retaining CEOs of major affiliates, clearly expressed his intention for generational change through the appointment of new executives.
In the 2021 executive appointments, Chairman Koo appointed 24 new executives aged 45 or younger. This is three more than the 21 appointed last year, marking the highest number ever. The number of new executives born in the 1980s also remained at three, the same as last year's record high. This reflects Chairman Koo's management strategy to actively infuse young talent while maintaining experienced top management to strengthen crisis management capabilities and firmly establish the foundation for sustainable growth.
In fact, LG has been significantly promoting young executives since Chairman Koo took office in 2018. This is interpreted as a reflection of Chairman Koo's "pragmatic" management philosophy, which boldly selects competitive young talents, provides opportunities, and drives business with strong momentum, breaking away from inertia.
Chairman Koo recently emphasized in business report meetings with affiliate CEOs that "qualitative changes and qualitative growth that customers can actually feel are important," and repeatedly urged the selection and nurturing of talents with execution power and expertise to lead future growth and change.
Chairman Koo's pragmatism is also evident in the expansion of female talent. This year, LG Group promoted a record 15 female executives, including 4 to executive director and 11 newly appointed executives. The number of female executives has been increasing annually, with 6 in 2018 and 11 last year. It is evaluated that opportunities are significantly extended to female talents while selecting personnel based on merit.
Lotte Chairman Shin Dong-bin Replaces Heads of 13 Affiliates
Lotte Group's generational change was even bolder. Through this reshuffle, Chairman Shin Dong-bin replaced the heads of 13 companies. Adding the 22 heads replaced in last year's executive appointments, a total of 35 heads have been replaced over two years. All six heads of the Lotte Holdings' control tower offices were also replaced. Among the 13 newly appointed heads, six are in their 50s. Young managers who can quickly grasp market demands and actively discover new growth engines were placed at the forefront. This reflects Chairman Shin's determination to overcome the crisis.
Additionally, unlike competitors this year, Lotte appointed heads in their 50s to food affiliates that had underperformed. Lee Young-gu, CEO of Lotte Chilsung Beverage, was appointed head of the Food Business Unit, overseeing the group's food business. Young talents in their 50s were also appointed to key food affiliates such as Lotte Chilsung Beverage, Lotte Foods, and Lotte GRS.
To respond to the rapidly changing corporate environment, Lotte Group also revised its executive rank system. Previously, it took an average of 13 years for a new executive to be promoted to president. After the reorganization, the minimum promotion period was reduced to 8 years.
A business insider said, "Instead of the late Honorary Chairman Shin Kyuk-ho's management philosophy of 'not cutting employees even if salaries are reduced,' a 'thorough performance-based system' has been instilled in the organization," adding, "The Lotte that used to boast about not adjusting manpower even during the foreign exchange crisis no longer exists."
Attention on Samsung, Hyundai Motor, and SK Group Executive Appointments
The business community's attention now turns to the executive appointments of Samsung, SK, and Hyundai Motor starting next month. Samsung usually holds regular appointments in early December. However, this year, due to judicial risks such as the retrial of the state manipulation scandal and trials over illegal succession of management rights, the timing and scope of appointments are difficult to predict.
Considering Samsung's ongoing judicial risks next year, the business community highly expects the current system to be "maintained." Similar to LG, it is anticipated that major CEOs will be retained while many capable working-level executives will be promoted. The promotion of Samsung Electronics Vice Chairman Lee Jae-yong to chairman is also a point of interest.
SK Group's appointments of presidents and executives are scheduled for early December. Following last month's "CEO seminar," executive evaluations are underway, and it is expected that Chairman Chey Tae-won's emphasis on "Environmental, Social, and Governance (ESG) management" will be reflected in the appointments. The scale of changes is expected to be small. It is analyzed that top management of key affiliates such as SK Innovation, SK Hynix, and SK Telecom are likely to be retained.
Hyundai Motor Group, which conducts appointments throughout the year instead of year-end regular appointments, is expected to hold promotions for executives below the executive director level around Christmas. This is the first year-end appointment under Chairman Chung Eui-sun, who took office last month, drawing significant attention.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
