Lotte Group's Shin stresses unlearning as key to innovation

Lotte is seeking a breakthrough as it faces a hostile business environment after credit downgrades of its affiliates

Hun-Hyoung Ha 1

2023-07-19 11:21:46 hhh@hankyung.com

Corporate strategy

Disregarding existing ways and being open to new opportunities are challenging in South Korea’s large conglomerates, where a strict corporate culture reigns.

But more often than not, unlearning before learning something new is the key to innovation.

Lotte Group Chairman Shin Dong-bin tried to drive this point home on Tuesday — that innovation comes from ditching old ways of doing things.

“Ignoring the rapidly changing business environment and stubbornly sticking to past successes won’t work any more. We must create our own ways of work that align with the current environment, through flexible thinking,” he said at a meeting of group affiliate executives called the Value Creation Meeting. “You cannot survive unless you try something new.”

The chairman urged a group of some 80 Lotte affiliate chief executives and division heads, including Lotte Corp. Vice Chairman Lee Dong-woo, to reassess their management strategies to ensure sustainable growth.

HEALTHCARE AND MOBILITY

He called on Lotte leaders to find new growth engines in the healthcare and mobility sectors.

Lotte Biologics Co. aims to become one of the top 10 biopharmaceutical contract development and manufacturing companies by 2030.

The company said earlier it will build multiple antibody drug plants with a combined production capacity of 360,000 liters by then.

It also plans to expand its investment in a US antibody drug conjugate (ADC) affiliate in Syracuse, New York, which it acquired from Bristol Myers Squibb last year.

Lotte Biologics' pharmaceuticals production plant in Syracuse, New York

Lotte Healthcare Co., which is powering the group’s health and wellness business, plans to open a one-stop healthcare service platform, dubbed Cazzle, in September.

Chairman Shin’s call for innovation comes after the credit ratings of several Lotte affiliates, including Lotte Chemical Corp., the group’s cash cow, were downgraded by a domestic ratings agency amid a worsening business climate last month.

Write to Hun-Hyoung Ha at hhh@hankyung.com
In-Soo Nam edited this article.