Internal Revolutions – insights from the adidas Group board on the value of changing mindsets

Is your company stuck in a rut?  Has the creative spark died and the comfort of doing what you always did set in? Is growth average but not outstanding? Looking for ways to change the mindset of leadership teams and start an internal revolution?  These insights from the adidas Group executive board might help!

You’re trying nothing less but to change the mindset of a whole company — and empirically, that takes time.

RA: Definitely, and it will not be an easy process. We are about to change our routines, culture and thinking, and that’s of course a massive change for the entire organisation. But at the end of the day everybody is convinced that if we bring brand desire to new levels, consumers will really be going after our products like never before. And the rest will follow.
EL: To win consumers’ hearts, everybody in the organisation has to move in the same direction. So for each of our major sports categories, we grouped everybody under a General Manager who takes over full responsibility for his or her category. In a second step, we defined a seamless handover from headquarters to the nine markets, with clear specifications and open feedback channels, making sure we get unfiltered consumer feedback on what we do and deliver. We want to create an organisation which constantly keeps searching for the new and thereby achieves rising market shares and world-class profitability.

“To empower our teams to move fast, we lowered escalation levels within the organisation and created clear roles and responsibilities for everyone. We want a bias for action, where our teams are encouraged to make the right decisions on their own.”

But trying out uncharted territory inevitably means failing from time to time.

EL: Definitely, but we move forward with our eyes wide open. That’s all part of stimulating the team atmosphere. For the first time, we brought end-to-end teams together which work on common tasks. Where in the past there had too often been an ‘us’ and ‘them’ thinking within the organisation, today it’s ‘us’ versus the competition that is clearly outside of the adidas Group.

We tell our people that if they fail, they should fail fast. And if they do, they should fail cheap, get up quickly and try again.

Roland, in what way has the new brand leadership approach influenced the work of a Global Sales team?

RA: We clearly understand that planning and creating goes hand in hand with the execution side of our business. So, from the very beginning, we involved our market teams in our reorganisation process. The same goes for Eric and me, we now work much more closely together, on a day-to-day basis.

“As a result, we’re driving a faster decision process than ever before. And although not every decision can be right, being proactive and acting agile is definitely better than just sitting and waiting to see what happens.”

EL: A perfect example of our new approach can be seen in the way we range our products today. In the past, we often developed and tried a lot of products to see what sticks. Those that didn’t, just disappeared. And of the products the consumer liked we tried to produce a lot more and to get them into the market as quickly as possible. Now we take a much more determined approach by building ‘hero product concepts’, so-called franchises. Developed with very clear consumer insights and tailored to the needs of these consumers – products like UltraBOOST or Tubular, for example.
… although it has to be admitted that Tubular was not a runaway success in the beginning.

Don’t give up too early. Making a product successful is hard work and needs time.

RA: Exactly, but this is a good example of how differently we act today. In the past, if a product like Tubular hadn’t been successful within the first four to six weeks, we would have dropped it and moved to the next. Today, we recognise that we probably oversold it, maybe put it into the wrong distribution or with the wrong price point. But we’re committed to Tubular, because it’s a collected memory from our past which we want to develop over the next couple of years. So we took it out of distribution, relaunched it and started again. And what happened? During the record winter blizzard in New York at the beginning of the year, people were lining up in front of stores for three blocks to get their pair of the latest Tubular version!

EL: That’s what a good franchise is about: You launch it, incubate it, iterate it, incubate it, reiterate it and finally commercialise it. We have a very different market approach today and completely different conversations with key accounts and consumers. And that makes our future look very bright.

“And although we don’t celebrate failure, we do celebrate the fact that we don’t give up. We’re not hitting everything perfectly – nobody does – but we move forward and take chances.”

Do you have experience of undertaking an internal revolution and creating the new in your business?  We’d love to hear from you!