Gold Medals and Pop Icons

Volume 17 Letter 2

Ever tried to impress someone by being someone you’re not? It’s exhausting trying to swim against the tide that’s your own personality and if your experience is anything like mine it probably didn’t work out too well. The same can happen to a business; in pursuit of more profits businesses can stray from their core identity, forgetting who they are, why they are successful and who are their real customers. Adidas, the athletic apparel and footwear maker, is a good case in point.

Adidas was started in the 1920’s by Adi (Adolph) Dassler and his brother Rudolph. After a family feud, Rudi would go on to start Puma but I digress. Adi was focused on improving athletic performance through better footwear and famously convinced Jesse Owens to wear a pair of his newly designed spiked track shoes in the 1936 Berlin Olympics. Adi Dassler continued to stay focused on competitive sports always inviting top athletes to the Adidas design facility near Nuremberg to create better footwear.

Until the 1980 Olympics Adidas dominated the athletic shoe market winning the majority of Olympic medals, World Cup Football matches and countless other athletic events. However, after Adi’s death in 1978 Adidas started to lose its way. In the 1980’s, when track shoes were suddenly cool and a fashion statement, the company, smelling the money, followed the trend. Adidas shifted their focus from athletes and improving athletic performance to pop culture. Sports stars were replaced with pop culture icons and Madonna and other rock stars became the Adidas poster children. Athletes started to drift away and companies like Nike and Reebok moved in and filled the void. Eventually Adidas would sell to businessman Bernard Tapie who owned the Marseille football club and then later to Robert Louis-Dreyfus. After filing for bankruptcy and totally adrift, Adidas was sold to Salomon – yes the ski company!

René Jäggi, a former Duracell marketing expert was tasked with turning Adidas around. He and his new team were looking for inspiration when they visited the Adidas museum in Nuremberg. Looking at all the pictures of high performing athletes from the past it struck them how far Adidas had strayed from its roots. So impressed by the exhibits in the Adidas museum that at that moment the turnaround team decided to develop an Adidas Performance product line and re-align Adidas with their traditional core strengths. Today the Adidas Performance line brings in 75% of group profits and Adidas is considered a serious performance apparel and athletic shoe maker again. What can we learn from Adidas and their long detour from high performance to pop culture and back again?

  1. Be Yourself: Pop culture was not Adidas core! It’s hard to be someone you’re not even for a big company like Adidas
  2. Choose New Markets Carefully: When choosing new markets make sure they align with your sustainable competitive advantage. Selling Pop culture from a Performance based DNA was not a good fit for Adidas.
  3. Recover from Mistakes: Even after 20 years of wandering Adidas was still able to re-claim its position as a high performance athletic brand.

As you get settled into 2017 ask yourself a few questions:

  • What are your core strengths?
  • What makes your company or brand unique?
  • Are we chasing business that we can serve with our unique skills or services? Is it a good fit or are we just chasing any business?

As the Adidas tag line says “Impossible is Nothing”. Stay focused on your core strengths and on who you are – then Impossible is Nothing. December 14, 2016 Strategy and Business by Paul Leinwand

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