Chief Executive Officer Yoon Seok-hwan of CJ CheilJedang emphasized a sweeping overhaul, saying the company must become completely different through "disruptive change and innovation that cuts to the bone."
That day, Yoon stated accordingly in a message to all employees titled "There is no acceptable tomorrow for us," calling it "a desperate crisis standing at the edge of a cliff." Yoon said, "After four years of stalled growth, we ended up receiving a devastating report card of a net loss last year," adding, "This is not a one-off setback but a 'warning for survival' to all of us and to the organization."
Yoon added, "We cannot ride out this surge with small changes," and said, "We will push fundamental innovation, including optimizing our business structure, fundamentally improving our financial structure, and rebuilding our organizational culture."
On optimizing the business structure, Yoon said, "Under the pretext of expanding our business portfolio, we have carried businesses that show no profitability," and added, "We will make firm decisions on businesses with no future in sight and concentrate our capabilities where there is a chance of winning." The company plans to invest aggressively in businesses such as Global Strategic Products (GSP) to expand new K-food territories overseas and in areas with strong cash-generation.
To improve the financial structure, Yoon emphasized, "We will remove every factor that hampers cash flow." He added, "We will review from zero base the routinely executed budgets, 'because others do it' style marketing expense, and ineffective R&D investments." In particular, following a strategy of selection and concentration, the company plans to secure investment resources for growth businesses by strongly liquidating noncore assets.
Yoon also raised his voice on innovating organizational culture. He said, "Rather than becoming a 'good CEO' who boosts employee satisfaction, I will become a 'winning CEO' who saves the company," emphasizing, "We will uproot the lax culture, focus solely on survival and fundamentals, and establish a performance-driven organizational culture that speaks through results and accountability."
Yoon said, "I am convinced that if we do not change now, there will be no choice left," while adding, "If today's discomfort can guarantee survival in the future, I will not hesitate."
The reason Yoon expressed such strong self-reflection and determination just over four months into his tenure is not simply poor performance. According to CJ CheilJedang, it stems from a sense of urgency that there is no future unless the company completely rebuilds everything from the ground up, including its business model, organizational operations, and ways of working.
CJ CheilJedang disclosed the previous day that, excluding CJ Logistics, last year's sales were 17.7549 trillion won, down 0.6% from a year earlier, and operating profit was 861.2 billion won, down 15.2%.
Including Logistics on a consolidation basis, CJ CheilJedang's sales last year increased 0.4% to 27.3426 trillion won, while operating profit fell 15% to 1.2336 trillion won. Net loss turned to a deficit of 417 billion won.