At the recent ABA National Conference for Community Bankers, Mark King, the President of Adidas North America, talked about his philosophy to make good companies great. Mark has an impressive track record. Starting as a sales rep for TaylorMade he worked his way up to President in 1999. During his 14 years at the helm, TaylorMade became the leading and most profitable golf company in the world, with sales increasing from $300 million to $1.7 billion. Elevated to the President of Adidas North America, TaylorMade’s owner, Mark is in process of doing the same thing with Adidas as he picks up awards such as “2016 Sports Business of The Year,” “Most Relevant Brand,” “Executive of the Year,” and “Most Influential Person in Sports Business.” In this article, we delve into the six rules that Mark has used at his companies to achieve outstanding performance that can apply directly to banks.
While anyone can hit a golf ball, the key to success is making sure you have the right process, so your club is consistently on the right path while making sure you efficiently transfer energy from the core of your body to the head of the club. It’s a two-dimensional challenge, and the trick is to coordinate both so they can be consistently reproducible. Similarly, in business, you need to set your teams on the right path through culture and then infuse them with enough “energy” to break out of the “normal” into the “extraordinary.” Below are six of Mark King’s ideas on how to achieve this energy:
1) The Right Path – Let the aspirational mission drive culture. Every company or group needs not just a set of goals, but an aspirational mission. An aspirational mission creates the “How” and motivates people beyond the paycheck. Mark could have set a goal of selling more shoes to have Adidas grow 20% over the last three years. However, that would not have provided the truly inspirational spark. Instead, the Adidas team set the goal of wanting “to be the face of U.S. sports.” Instead of 20% per annum growth over the last three years, Adidas achieved more than 80% in a flat industry. Mark did the same thing at TaylorMade as he focused the Company on being “The best performance golf brand in the world.” During that time, TaylorMade went from being in the shadow of Callaway to be 2.5 times larger. None of this would have happened if Mark focused the Company on just trying to be better. He wanted everyone to strive to be the best.
“Growth,” as Mark likes to put it, needs to be ingrained in a company’s culture. An aspirational goal moves everyone’s thinking from one of incremental improvement to growth by leaps.
2) The mindset of innovation – A faster product cycle. To achieve bounding growth, likely a new business model is needed. Mark knew that one of the hallmarks of a leading company was the consistent creation of new products. As a result, Mark started down a path of “Relentless Innovation" where he went from a three to five-year product development cycle to one year. By creating a process that allows for a minimum of a new product per year, the Company always had something to look forward to, something to work hard on and a focal point to create new energy. Employees loved it, the media ate it up, and the consumer soon noticed that Adidas was leading the way.
3) Let creativity fill the gaps. One of Mark’s most profound insights was around the role of creativity in a company’s growth. Mark points out that it is often not money that limits execution, but ideas. Ideas are more valuable and thus need to be cultivated. Having millions of dollars to launch a product may be a hindrance as you might outsource the problem to someone else that doesn’t know the customer as well. Alternatively, when you don’t have money, creativity can fill the gap between limited resources and execution.
4) Support curiosity to drive creativity. To infuse creativity into your culture, start with stoking the fires of curiosity. Getting employees to ask “why” will be the basis of change. At its core, this means not being enamored by what you do every day as you need a culture that constantly looks for ways to do things better whether it is coming out with new products or restructuring your current processes to make it more efficient. Every piece of new technology that comes out has the potential to improve your business. Employees of the company need to be constantly thinking how this technology can improve what the Company is already doing?
5) The power of distributed leadership. Traditionally, the leaders of corporate America praised diligence, loyalty, and experience. That works well when you are in a stable market and need to produce goods or services. If senior leadership knows how to do everything, then a top-down, hierarchical structure works great. Strategy and planning can be accurate as they can be based on history. Orders are given by the top, and middle management is charged with execution. However, what happens if management doesn’t know everything?
Who in senior management has experience with artificial intelligence, Instagram, mobile account opening or digital loan processing? One major issue is that management is the most removed from the customer and are the least likely to get direct product feedback or see how your bank might be disrupted by a competitor. In this age of rapidly changing technology, speed and creativity are the new fuel, and good ideas can come from anywhere in the organization. Having a traditional command and control structure creates too many layers of friction for new ideas to make it to market.
To deal with disruption and rapid change, a new leadership model is needed – one where creativity and controlled risk taking are valued over time on the job. This often means your bank’s newer employees, the ones that are on the front lines are the most valuable. These line employees need to be given the tools and education so that they can help manage change and take a more active leadership role. Employees throughout the organization need to be empowered to take the initiative because new ideas are not going to make the light of day if everyone is sitting around waiting to be told what to do.
6) Know the connection with your customer. Mark makes this clear to everyone in the organization - "It is everyone always." Every employee needs to be crystal clear on how they connect to the customer as it is easy for many positions to forget. The reason your bank exists is for the customer, and everyone in the organization needs to be consistently reminded of that from board members to the new hire in IT. An employee that can’t get access to the Company’s network on a weekend will ultimately have some impact on the customer. The customer experience is a top priority, and the whole organization needs to be structured to ensure the company is delivering the best experience as possible.
Mark King has built a career on managing change with these six principals. Global markets, new technology, and faster communication make it an exciting time to be a business leader. No product or process is untouchable, and it is the customer that is allowing us, and rewarding us for being more creative.
Along with the rest of the economy, banks are ripe for change and innovation. Having large, seemingly unattainable goals, distributed leadership, staying connected to your customer, creating a faster new product cycle and having support for both curiosity and creativity could be the change your bank needs to better manage change in the future.
Submitted by Chris Nichols on March 05, 2018