How Adidas Aligned its People Strategy with its Business Strategy
Doing strategy: How adidas is creating the new
Explore how adidas has aligned its people strategy with its business strategy and the interesting results that have come from it, with this article from Nicholas Ind, author of the new book Branding Inside Out.
When developing strategies, organisations look both forward and back. They draw on the capabilities that define the past and they look towards a shifting future to uncover opportunities. Yet as Leinward, Mainardi and Kleiner observe in their book Strategy that Works, there is a large gap between planning a strategy and executing it[1]. Managers rarely have skills in both of these areas and the rapidity of change can undermine even the most clearly conceived strategies. As Mike Tyson once prosaically noted, ‘everyone has a plan ‘till they get punched in the mouth.’
The additional challenge that confronts companies is having the right people to deliver a strategy. We have been here before. More than twenty years ago, during the emerging dot.com boom, McKinsey coined the term ‘the war for talent.’ As companies tried to build their Internet offers, so they had to find those rare (and mostly young) individuals who could make it happen. This time round, however, the challenge is more strategic. It is not simply about building a channel to market, but rather, transforming strategic intent into reality. For example, when sportswear brand adidas launched its new strategy, Creating the New in 2015, based on the three pillars of speed, key cities and open source, it also realised that it had to attract and retain the creative talent that would enable the company to execute it. adidas, put a specific focus on recruiting what it called ‘creators’ and nurturing partnerships with creative individuals. Steve Fogarty, who leads the Global Talent Futures Team at adidas, notes, ‘We were taking a stand as an organisation, to put creativity at the top. Our consumers and our talent are creators. Creators don’t want to be dictated to, but express themselves to the world through their uniqueness and creativity.’
adidas needs to recruit 4,000 – 6,000 creators a year, as well as keep and nurture the creativity of the people it already has. To this end, it has a clear statement about its brand and provides employees and partners with the space and support to make real contributions. However, what makes the process work so well, is that adidas has aligned its people strategy with its business strategy and worked to build a culture that gives emphasis to the central role of creativity. This is something that Fathima Saleem and Oriol Iglesias emphasise when they note that successful internal branding is a company-wide effort, which requires a supportive culture that integrates ‘brand ideologies, leadership, human resource management, internal brand communications, and internal brand communities, to enable employees to consistently co-create brand value with multiple stakeholders.’
Has it worked? For adidas, the results are interesting. The company now gets 800,000 applications a year. As Fogarty argues, ‘We have seen our engagement levels go up across our social channels and we’ve seen the performance of our organisation’s talent continue to rise.’ That, in turn, has fed through to a succession of innovative product ranges including NMD and Yeezy, as well as the revitalisation of Stan Smiths and Superstars (the best-selling shoes in the world in 2015 and 2016). In 2016, adidas’s global revenue grew by 18% and net income by 21%, while in its key North American territory, sales grew by 31% in the first quarter of 2017. The performance is a testament to both thinking and ‘doing strategy’.
[1] In a study of 700 senior executives they note only 8 per cent said top leaders excelled at strategy and execution.
About the author: Nicholas Ind is an associate professor at Kristiania University College, Oslo, and a partner in Equilibrium Consulting. He is a member of the editorial board of the Journal of Brand Management and a founding member of the Medinge Group, an international branding think tank. Nicholas is the author of eleven books including Beyond Branding, Living the Brand and Brand Together (all published by Kogan Page). He also co-edited Brands with a Conscience.
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