Shin Dong-bin: "If We Are Only Focused on Survival, There Is No Future... CEOs Must Change First"

Chairman Shin Dong-bin Declares at First Executive Meeting, "I Will Lead the Change"
CEO Must Change First for Organizational Culture Innovation
Calls for Strong Execution Based on Consensus
Encouragement: We Definitely Have the 'Crisis Overcoming DNA'...

On the 13th, Shin Dong-bin, Chairman of Lotte, participated in the '2021 First Half Lotte VCM (Value Creation Meeting)' held via video conference.

[Asia Economy Reporter Lim Hye-seon] "What are the fundamental competitiveness and core values of each company?"

On the 13th, Shin Dong-bin, Chairman of Lotte, asked this question to 130 executives including Lotte Holdings and BU heads and CEOs at this year's first executive meeting. Chairman Shin firmly stated, "We must be able to present the company's vision for 5 or 10 years from now to our employees," and added, "I will lead the change at Lotte myself." He continued, "Nike has gained strong brand power by conveying respect for athletes to its customers," emphasizing, "Each company must have a clear future vision and differentiated value to enable innovative growth amid crises." He pointed out that companies whose goal is survival rather than growth have no future. He also instructed bold portfolio adjustments for companies that have failed to innovate.

He also called for continuous investment and enhanced execution to achieve the vision. Chairman Shin said, "Please establish the vision from a future perspective and frequently reassess whether it aligns with the rapidly changing market environment," adding, "Investment to respond to digital innovation is essential, and differentiated corporate value must be created through brand strengthening."

Regarding last year's management performance, Chairman Shin said, "Management indicators were worse than ever," and mentioned, "Just as companies that innovate during crises grow significantly after the crisis, we must thoroughly prepare for the stabilization of the pandemic after the second quarter of this year."

On the reason why some business sectors underperformed despite being the first in the industry to start, he diagnosed, "It was an execution issue, not a strategy issue." He said, "For investments to bear fruit, execution aligned with strategy is essential," and added, "When CEOs establish visions and strategies that customers, employees, and society can empathize with, strong execution power will be demonstrated and goals can be achieved."

There was also discussion about organizational culture suitable for the new management environment. Lotte Group has recently carried out many organizational restructurings and personnel changes over the past two years to renew corporate culture. Chairman Shin emphasized, "Some companies still have authoritarian cultures," and said, "To build a flexible and horizontal organizational culture, CEOs must change first."

He also mentioned ESG (Environmental, Social, and Governance) management, which is directly linked to corporate value. Chairman Shin said, "ESG factors must be considered when establishing vision and strategy," and urged, "Instead of approaching it as merely responding to regulations, actively think about what kind of society we want to create and what social values we can provide."

On this day, Chairman Shin Dong-bin did not hold back encouragement. He said, "Even during the IMF and Lehman crises, Lotte achieved meaningful results through bold decisions," and added, "We definitely have the 'DNA to overcome crises.'" He urged, "Abandon past successes and promote business innovation starting with CEOs showing changed attitudes."

Meanwhile, the ‘2021 First Half VCM (Value Creation Meeting, formerly the executive meeting)’ was held for about four hours via a non-face-to-face video conference to prevent COVID-19. This VCM was conducted under the theme ‘Preparation for a Leap (Rethink-Restart).’ It reflected a sense of urgency that discussions on ways to make a leap forward must be conducted deeply from multiple perspectives. There was also a desperate recognition that improvements based solely on the current methods have limits in the scope of innovation. The focus was also on coldly reviewing past performance and devising balanced strategies for the short and long term. The meeting covered major topics such as this year’s economic outlook and management environment analysis, group response strategies, business portfolio advancement plans, and redefinition of CEO roles.