LG Group to focus on fundamentals, not profits, in 2021
Facing an unpredictable year, LG Group has focused its 2021 business goals on fundamentals like safety and quality control, rather than on large profit margins.
The conglomerate’s affiliates held a round of meetings in November to report business results for 2020. Based on those discussions, LG Group Chair Koo Kwang-mo and about 40 top executives of its subsidiaries recently came up with rough directions for the upcoming year, LG Group said Monday.
A basic assumption underlying the guidelines for 2021 is that the business environment will remain far from favorable, as uncertainties are likely to persist both within and outside the company.
“Among executives, there was a mutual agreement that the gap will widen among companies that proactively respond to the crisis situation and new opportunities despite it, and those that fail to do so,” LG Group said.
The aim for 2021 will not be in quantitative growth, as in company size or profit, but in making qualitative improvements in the way LG does business, it added. These refer to efforts that may not immediately generate net profits but lay the groundwork for LG’s future growth engines, like establishing a firm database of its customers.
Investments in workforce will continue, however, in areas like research and development, product planning and digital transformation.
LG said it would push efforts to expand clients and increase product or service portfolios in several business segments, including large-sized organic light-emitting diode (OLED) panels, petrochemicals, electronics and 5G networks.
The initiative to create digital transformations in the subsidiaries’ workplaces will continue in 2021 as well. Koo, who entered his third year as chairman in June, has ordered sweeping changes of LG’s decision-making process.
In 2021, Koo specifically requested that chief executives focus on instilling fundamental values in subsidiary employees, like quality control and safety. The conglomerate’s petrochemical unit LG Chem experienced two accidents over the past year, including a large-scale gas leak in India that killed a dozen people in May.
“We need each and every one in this organization to take on responsibility as if their family members would use our product or work at our sites,” he said. “And to realize this goal, I need chief executives to act out at the forefront of this movement.”
BY SONG KYOUNG-SON [firstname.lastname@example.org]