Haidilao to Adopt Rotating COO Plan, Streamline Board of Directors
Haidilao, a Chinese hot pot restaurant chain, announced on September 21 that it plans to implement a rotating Chief Operating Officer plan. Regional managers, leaders of functional departments, and directors of committees will all eligible to participate if they meet certain conditions.
The selection and reappointment of each rotating COO shall be determined by the CEO and appointed in accordance with company regulations.
Haidilao claimed that this program will allow relevant personnel to have a more comprehensive understanding of the company’s management policies and processes in different regions, as well as to apply their expertise to daily management.
The announcement also showed that four executive directors of Haidilao, who were appointed in August of last year and are known for their roles in restaurant operations and food safety, had resigned from the board.
After this adjustment, Haidilao’s board will be composed of six executive directors and five independent non-executive directors. The firm believes that a streamlined and strengthened board structure will improve its decision-making efficiency amid improved business performance due to its so-called “Woodpecker Plan.”
The Woodpecker Plan refers to cost-cutting measures announced by Haidilao on November 5, 2021, designed to compensate for a series of negative effects caused by the company’s misjudgment on the development trend of the pandemic and its rapid expansion. At that time, Haidilao said it would gradually close about 300 stores that failed to meet expectations by December 31 of that year.
In March this year, firm founder Zhang Yong’s CEO position was replaced by Yang Lijuan. Previously an excellent waiter, she has worked at the company for 27 years and will be responsible for the Woodpecker Plan.
Haidilao said in its financial report for the first half of this year, restaurant business performance has significantly improved month-on-month since June this year. The company revealed that it plans to start its “Hard Bone” plan, and is considering the possibility of resuming operations at some stores that had been closed under last year’s Woodpecker Plan.
SEE ALSO: Haidilao to Reopen Stores Closed for Cost Reductions
The report revealed that in the first half of this year, Haidilao’s revenue was 16.764 billion yuan ($2.36 billion), down about 16.57% year-on-year, and it recorded a net loss of 267 million yuan, reducing the loss range. Data from China’s National Bureau of Statistics showed that income from catering in the first six months of 2022 was 2,004.0 billion yuan, down 7.7% year on year. In May, more than 80 cities faced Covid-induced lockdowns, with no dining-in services available. Under such a backdrop, Haidilao’s narrowing losses appear particularly difficult.
In fact, Haidilao is also trying to achieve new breakthroughs, moving its products and services online to rebuild an emotional link with consumers. To that end, Haidilao has set up a community operations division to encourage its stores to generate revenue in other ways, such as by hot pot food delivery.
These new moves are also inseparable from a complete industrial chain layout. In recent years, while regarding hot pot operations as its main line, Haidilao split into a number of companies covering various links such as food materials, condiments, human resources, information technology systems, and store decoration, almost covering the entire chain of the hot pot industry.