Bjørn Gulden CEO of Adidas: shoes, leadership, and fast decisions
2023-09-13 00:35:00
The CEO of the largest single investor in the world, Norges Bank Investment Management, interviews leaders of some of the largest companies in the world. You will get to know the leader, their strategy, leadership principles, and much more.<br /><hr><p style='color:grey; font-size:0.75em;'> Hosted on Acast. See <a style='color:grey;' target='_blank' rel='noopener noreferrer' href='https://acast.com/privacy'>acast.com/privacy</a> for more information.</p>
Hi everyone and welcome to our podcast In Good company. I'm Nicola Tangen, the CEO of the Norwegian Southern Wealth Fund, and your host. Today. In this podcast, I talk to the leaders of some of the largest companies we are invested in so that you can learn what we own and meet these impressive leaders. Today, I'm speaking to Bjørn Gulden, CEO of Adidas, the largest sportswear manufacturer in Europe and the second largest in the world. We own over 2 of Adidas, translating into 5 billion kroner, or over 500 million dollars.
Bjørn is a really impressive leader and a serious, no-bullshit CEO. He's also a previous professional footballer. And very, very funny. You don't want to miss this one.
Hi, Bjørn, I should have said this in Norwegian, but given that we have an international audience, we may want to switch to English or German or.
Can you speak German?
Not so much, but.
Then we'll do it in German.
Okay, all good.
So Bjørn, great to have you on. really, really fantastic. Not so many international Norwegian CEOs, so really great. Now you guys make like 400 million pairs of shoes a year. what do you wear today?
Which ones have you got on?
I have samba.
Samba, would you mind just taking it off and we can have a look at it?
But only the shoes. I don't take anything else off, right?
Shoes are fine, we'll start with the shoes.
So why do you wear samba?
It's an accident now. But Samba is actually the coolest shoe in the marketplace now. It's an old shoe that came out of soccer, football, and over the last six months, it's developed to be probably the hottest street shoe around the world. So the demand is much bigger than supply. You know, I'm an old guy, so I'm trying to get young, so I dress like the kids do, and that's why I'm wearing the samba.
Yeah, I'm trying to say it, but it doesn't quite work so well for me. So when you look at a shoe, what do you look at? what makes a good shoe?
Well, that depends on what it's for. I mean, if it's a performance shoe, then I have to wear it and test it, and I'm testing a lot of shoes. And when it gets to the fashion side of it, you know, I'm more mainstream. So I follow what I see the trendsetters are wearing and my trend people give me shoes, I wear what they tell me. But on performance, if it's a running shoe or a soccer shoe.
I test a lot of shoes to see what fits me.
So let's say you do a running shoe. What kind of things do you look at when you run with a running shoe? What are the things you are conscious about?
Well, for me, I mean being an old soccer player with an artificial knee, I need stability and cushioning. So it needs to be a shoe with a wide sole, a wide last and with, I would say extra Nordic cushioning, so I'm looking for a shoe that fits me. And then if I run a 5K and I try to be fast, which I do a couple of times a year, then I run with a shoe that has a carbon plate and which is very light, that actually makes you run faster, you know? So it depends on what I'm using it for.
But I'm very particular when it gets to the footwear I wear for sport, then I spend quite some time testing until I find out what is the best.
Now you have a background as a professional athlete, tell us about that journey.
Well, I'm born with a father that was a national player, both in football and in handball, for those of you who know what that is. So, I grew up in a sports home and had only one passion that was sports. So I also played both handball and football on the Premier League in Norway, also the youth national teams. And then I turned professional and went to Nuremberg when I was 18 and then injured myself badly and had many surgeries. So I had to give up my career when I was 23..
And that's why I had to move my skills from the legs into the head and started studying and then connecting to the sports industry.
But I think you said somewhere that you got a bachelor's, you got a master's, but the best education you have is your team sport. What do you mean by that?
Well, playing team sports at any level, but especially at the professional level, is like it mirrors a little bit of life. You play with people that are better than you, worse than you, people you like that you don't like. But you have to try to give the biggest impact that you can on the team, not only for yourself, but the team as a total. And I think that mirrors what you're trying to do in a job.
And that's why, from an education point of view, being an athlete that played in different teams and then also going through the face of being injured. And how you deal with problems, and not only wins but also losses, has been the best lesson that I've taken with me in my professional career. The education only gives you a background to have the knowledge theoretically, but a real life experience is a thousand times better than education.
Now in sports, to go from one club to another is a pretty big thing, and you went from Puma to Adidas now, that's a big thing.
Yeah.
How did that shift come about?
Well, first, you have to remember that I spent 10 years with Adidas in the 90s, so this is like coming home. So it's not as bad as only going from Puma to Adidas. I have been with Adidas before, but this time after having been the CEO for Puma for 10 years. I felt that extending another five years would not be right.
I mean, 15 years on the helmet of Puma, in my opinion, would have been too long. And I think I was in a phase where head and heart was going in different directions on many decisions. And I felt it was time. I had decided to leave and go to a different company and then suddenly Adi showed up with their CEO leaving.
And they then asked me a couple of times if I could join. I thought I had a non-compete, so the answer in the beginning was no, but when we then checked the contract and figured out I didn't really have a non-compete, the door was open. And then I took the step.
Emotionally a little bit difficult, but the right decision, I think for everybody, I think for Puma, for Adi and for me.
You wear only Adidas clothes for the moment. what have you done with all your Puma clothes?
Well, it's not only mine, I have three sons who have been in Puma for 10 years, I have a wife and also extended family that has only worn Puma. So I tell you, there was a lot of product. But what we did is that we gave everything to different organizations and then to our kids, who could give it to their friends.
Now, when all the friends of my kids come to our house, they all wear Puma, which I don't really like, but I'm guilty of it. So I think we gave away, I would say, 90 of the product we had to people who needed it.
Now the story. The rivalry between Puma and Adidas is a pretty fascinating one, right? You're both in a small village. It came from two brothers who competed. Just give us a quickie on that one.
Well, it comes from the father. I mean, it was the dazzler, you know, back in the 40s, who had a shoe factory. And then the two brothers, you know, started working for him. And then, during and after the Second World War, they didn't find together as friends anymore and they separated. So Puma was founded in 48 and Adidas in 49..
And since then, they were big competitors. And I think the interesting thing is that in this small little Dorf, as you call it Hadzogenaurach, the professional sports industry was actually born. So if you look back to everything that happened in the 50s, 60s, 70s, 80s, it was basically Adi competing against Puma. And, as you said, they were two brothers and very emotional and very, very many stories, of course, what that did to this small Dorf.
Many actually funny stories, but also bad stories. And then only later, you know, the Americans with Nike and Reebok and other brands came on. But this is where the sports industry was founded, and I happen to be so lucky that I've been the boss of both. I'm not sure what the Dazzlers think about me, but you know, it's a what should I say, big thing to have experienced.
And I'm actually very proud of that.
So dorf is a German word for village, right? So do you kind of do? The Adidas people and the Puma people go on different sides of the streets? Or like, how split is? Do you eat in the same restaurants? or are you like, how does it split the village?
It used to be very split, so, you know, it was a river that split between Puma and Adi, and it was, as I said, very serious. There's many bad stories about that. Actually, I think today it's different.
You know, we have about five and a half thousand people here, I think Puma around 1,500..
Ironically, many of those have partners working for the other brands, so it's not as tense as it used to be. And, you know, to be very honest with you, I'd rather have Puma be successful than an American company. So as competitive as we are, I think we are a friendly competitor. And when I was at Puma, I was also very close friends with many people at ADI.
So I think the stories are better than reality, to be honest. It's now kind of common sense and we all behave like people should be, with respect. And as I said, many of us are friends.
Yeah, yeah, well, if we look at the reality, Adidas before you took over had some difficult years, and actually, when you took the job, the share price went up by 30. And I think some people call it the golden opportunity after your surname. So what happened during those years?
Oh, it's a long story. I think that Adi had everything going for them, you know, through the 17, 18, 19, and then I think, you know, Covid and a lot of things that changed the world didn't really fit, I would say the strategy, and I think Adi was slow in reacting to these changes. You know, China going down Covid, the Russian War.
And the whole, what should I say D to C? Going straight to the consumer on a very aggressive sales plan, and also I would say aggressive profit plan didn't really fit the landscape. Then you lost, you know, the cooperation with Kanye West, the Yeezy business. So there were many things that happened at once that then took the company in a difficult path and I think they lost focus. My job is to bring back the old ADI DNA, which is, you know, to be the best sports brand, you know. To mirror performance with street culture. And be very, very focused on product marketing and the consumer.
And that's what we're trying. And as you know, on Powerpoint, everything is easy. But, you know, we deal with people and it will take a little bit of time. But I think we already now see that we're on the right track and I'm extremely optimistic about our midterm.
So let's advise to people who take over a company like that what's the first thing you do when you get a new job?
I think, I mean, by me and Adi, it's a little bit different. Because, as you know, I've been here before and I followed the industry my whole life and I'm a sports romantic. So, you know, I think I knew the company from the outside very well, and then, of course, the industry. But I think, in general, you know, most businesses are people business. So when you look at all the numbers, which you of course, have to do. You also then need to look at the people and find out very quickly who the key people are that you can trust and then form your team.
And then, you know, together with the team, start to attack the issues. I think that everything which is consumer oriented is extremely dependent on the people. And that's why I always say that my biggest role as a leader and coach is actually HR. I mean to work with the people, that's the most important.
Björn What's the key to build a strong sports brand?
Oh, I mean, first of all, you need to make sure you have the right product on the performance side, so you have the right, you know, technologies and the product so people can actually perform. Right now, as you can see, you know, we have the right product. Coming out of the Women's World Cup, which we won with Spain, that's why I'm wearing the women's shirt for Spain, that's good.
If you have running shoes, you need to make sure that you have the best technology there and so forth. And then, of course, you need to have athletes and teams and federation who gives you the exposure. And then to make money, you need to translate that into lifestyle. You know, the lifestyle market and the street market is much bigger than the sports markets, you need to combine both.
And there you need to connect to what we call street culture, you know, connect to whatever the what should I say? Young people around the world thinks is relevant. Both from a direction on the product, but also working with influencers and entertainers and people that are relevant for that consumer group. So it's like it mirrors a lot of what is relevant for people around the world. If you know what I mean, it's like you need to be visible, you need to have a message, that is what should I say, important and relevant.
And then you need to be very close to consumer demand and changes in demand. So I always say that everything we do in sports and culture is relevant all over the world. So we need to be on the what should I say, the things that are happening around the world to be part of it. And that's why this industry is so interesting.
How do you pick these ambassadors and athletes?
Well, mostly by, of course, following the advice of the people in the markets and be very close to what is going on. In sports. It's of course to try to pick the athletes, female or male, that are the best, but also have a personality. And when it gets to influencers in general, it is to find out who has an impact in the different markets. That might be very local. I mean, it might be, what should I say, a pop brand in Korea, or it might be a designer in Sweden.
And there are many, many, what should I say, variables. But the key of them is to listen to your people and listen to your consumer. You cannot decide what is relevant for the consumer. You need to pick up trends and then commercialize it, so you need to be very, very close to the markets.
But sometimes the disadvantage of going with the big names is that sometimes they become very dominant. And you kind of had this issue with Kanye West, so what happened there?
Well, this is before my time. I think Kanye West is one of the most creative people in the world, and, you know, both in music and what I would call street culture. So he is extremely creative and has, together with Adi, you know, created Yeezy Line, which was very successful. And then as creative people, you know, he did some statements, which wasn't that good.
And that caused Adi to break the contract and withdraw the product. Very unfortunate because I don't think he meant what he said and I don't think he's a bad person. It just came across that way and that meant we lost that business, you know, one of the most successful collabs in the history.
Very sad. But again, you know, when you work with third parties, that could happen, and you know it's part of the game. That can happen with an athlete, it can happen with an entertainer.
So it's part of the business.
Yeah, we are seeing it in many industries, we are seeing it in the spirits business, with tequila, vodka and so on as well.
No comparison.
I don't drink tequila, I don't know.
What are the technological trends that you are seeing, which you are excited about in your industry?
Well, the product side is, of course, on the running side. It's been lighter materials, and it's been this famous carbon plate that you put in the midsole that actually triggers you to run forward. So the shoe itself has some energy. That's why, you know, both on spike shoes and running shoes, you see that times are improving because of technology, lighter materials.
And then you will see and are starting to see a lot of sustainable materials, you know, materials that doesn't come out of oil or anything that damage the planet. So a lot of innovation on that side, and then when it gets to innovation in general, you know, when it gets around us, then, of course, the whole digital space, you know, e-com from a channel, you know, which 15 years ago didn't exist, has been huge. And also, you know, digital tools like artificial intelligence and all kinds of simulation tools that we can use to help us run and improve the business.
But in the core of it, it's everything that has to do with materials and the product itself that is mostly important for us, to be honest.
How do you use AI?
Oh, it takes over a lot of functionalities where we used to have a lot of people. I mean, writing product text, for example, making sure we optimize pages, that we optimize marketing tools. And that is also starting to, what should I say?
Be taking decision-making when it gets to product launches volumes. But you can't use only artificial intelligence when you do that, you also need to use a little bit your human intelligence, so it's a combination. It's a tool that can make yourself much more efficient and take subjectivity out of many decisions.
And it can also do a lot of, I would say, repetitive tasks in a better way and save both time and, of course, cost.
Now, in sports, but also in business, speed is a mindset, and you say that speed is becoming more and more important. Why is that important?
Well, first of all, because things change very quickly. As I said, over the last three years. We've had a pandemic which none of us have experienced and none of us learned in school or in life how to deal with. So I think speed and flexibility was enormously important. Then. Then you had the freight crisis, in the sense that both supply chains got 10 times more expensive and certain producing markets shut down.
So your whole supply chain was changing, and then you had markets that were shut down because of Covid or other reasons. So the speed to have an organization that sees what's going on and then can react is more crucial than ever. And I always say that when the reality surpasses your plan, your plan is not relevant anymore. So it's extremely important with speed and having both people and processes that can take decisions based on facts and also a certain degree of intuition.
And how do you get the speed up in an organization?
People.
And how do you do that?
Of course, there are many different opinions about this, but I believe in a more decentralized organization because I think markets move in different phases. The differences between China and the Western world, for example, on consumer taste and things has become much bigger, the differences between U.S and Europe has become bigger. So you need to make sure that you work in a matrix that is more locally focused than the old what should I say, hierarchical central organization.
And then give people the tools and the feeling that they can make decisions. And ironically, with all the tools you have, people get even more important in a situation like that. So I look at the organization as an organic thing that changes all the time. That is multi-dimensional and will always be in a matrix, and in this industry, you need social, intelligent people that are able to move in a matrix. And can, actually, what should I say, make decisions or help in decisions without having a one-dimensional hierarchy? If you are a person that needs only one reporting line and very, very clear-defined roles that you have in this industry, I think consumer product in general is not where you should be.
But Björn isn't this slightly at odds with German corporate culture? I'm not joking, but you talk about speed and agility. When I think about German corporate culture, I think about Ordnung, hierarchy, process, systems.
Yeah, but you have to remember, here I'm sitting in Germany, but I have 120 nationalities on campus and I'm trading in 160 different countries. And I say that the office here in Germany, the office we have in L.A. and Portland in the U.S. and in Shanghai. The sum of those four offices is headquarters, so I don't look upon this as being only one headquarter. And since the headquarter officially sits in Germany, we are a German company. We are a global company that happened to have roots in Germany, but we're not a German company.
So I think that would be the answer.
Do you make fast decisions?
Very.
Is that good?
Yes, it's not bad.
Are you too fast sometimes?
Yeah, I am.
So what's the advantages and disadvantages of being fast versus process-oriented?
I think the advantage is if you have a leader that is on par with what's going on and you have your people around you. You together can make fast decisions. Of course, the problem in the beginning is that if you have a leader like me, who gets very much involved in the beginning. You could make people uncertain because you're pulling a lot of a decision to yourself and that's always a balance and when you make decisions, you're not always right. But I always say to people, I'd rather have you make a decision and be wrong than not making a decision and only wait. I don't need people who wait.
So I think that making decisions based on the facts that are there.
And certain intuition is better than asking for another meeting. I hate ending a meeting with another meeting. I don't like that.
Yeah, no, I agree. When I met you in person, one of the things that really struck me and which I really liked with you is the absence of bullshit.
Very truth-seeking, very honest, very transparent. Why are these things important?
I think that a has to do with personality, but I think also experience. I've been in this industry so long and I've done many mistakes. And I think I have certain confidence that I'm not afraid. Being honest has to do with also having a certain confidence. I don't need to act or play something. I am the way I am and that's why I'm never tired of my job, because I can be myself.
I think that's a huge advantage that you don't have to act to be something you're not. Most people I know that get into burnouts and having problems are people that think they have to act in a different way than their personality. I've been very conscious all the time that I am the way I am, with the strengths and the weaknesses. And try to make people understand that they can deal with me. It doesn't matter if you are the lowest in the hierarchy or the highest, I treat everybody the same and they can treat me as a colleague.
The only time when hierarchy counts is when we disagree and I have to decide. The less decisions I take, the better it is, because then it means that someone else has taken the decision that I agree with.
Do you think this learning from mistakes and seeking the truth? Is there a link to sports and to performance culture? Yes.
If I can find an ex-athlete, male or female, that also has the education or is interested in the topic, then I'd love to hire them. Athletes I used to pressure, I used to compete and that is very important also, at least in our industry. I love to work with ex-athletes.
I had never thought about what you said about burnouts. And it's maybe people who are pretending, Would you mind just elaborating a tiny bit here?
No, I think that to act like you are something that you are not. Meaning that you go to work and you have to be a different person because you think you need to be. That costs a lot of energy. I think many people are led into different cultures by believing they have to be different than what they are, and that's why they get into burnouts. I think if you can act the way, you are of course serious and also with the knowledge, but you don't need to play a different person. I think you save a lot of energy and life is easier.
In our jobs, at least in mine, it's not really a job, it's a lifestyle. I am CEO of Adidas 24x7 and I live that role. As long as I feel I can be that with my personality, I will do it and be that person. If I feel that I don't fit anymore, then I will quit. Because I think, as a leader, when you've done it for a while, changing your way of doing business, I don't think it works. I think your credibility in the organization, when they feel that they can treat you for who you are, makes things much easier.
I heard something about you sharing your personal telephone number with all the employees in the beginning. Yeah, is that right, correct? So how many people did you give it to?
60,000?
How many calls did you get?
I mean, calls and text messages, and WhatsApp many.
My point is that they should have access to leadership, if they have something which is important, they should be feeling comfortable. Going direct I get, I would say, a couple of hundred direct messages every week that I try to respond to in one shape or form. Or I take the topic that they raise and then address it in a town hall. I try to, yeah, I mean, you see from the things that you get directly to yourself what is important for people. And I try to bake that into the messages that I give back.
I also do town halls for all the 60,000 every month where we go through the previous month. When it gets to performance, we talk about what the issues are. And at the same time, then take some of those topics that comes up through the direct contact and bring them up. So it's a way of having people understand they can go straight to the boss without having to be afraid of someone else seeing it. I mean, you know how people are.
I love it, I love it, I love it. Now. When are you in the flow? when do you thrive the most?
When do you feel? Gee, I'm so lucky, I'm so lucky.
24-7.
You know, to be honest, being the CEO in this company and in this industry is amazing. I just landed from Sydney yesterday, having won with Spain the Women's World Cup, and I'm after this called flying to Budapest to see Carson. Although he's in Puma, winning the 400-meter hurdle. And that's part of my job, right? And being in the middle of sports, street, culture, fashion. Working with, as I said, 120 nationalities on headquarters, 50 men, 50 women. I don't think there's a better job, to be honest. So I don't know if that's calling the flow, but I'm very happy where I am.
Well, I would slightly disagree with you. I actually think I have a better job, but hey.
But it's true, when you have fun, it's not a job, right?
No, but you know, we are privileged because we've gotten there, because we have done many things that we thought were fun. I don't think you get to the top, either in sports or business if you do things you don't like. I always say that an athlete who is world-class has to do 10,000 to 12,000, 14,000 hours of practice. And you can't do that if you don't think it's fun. And the criticism on athletes because they only do it for money and all that, that's not true. Because to get to get the money, you have to love it. And I think it's the same in work.
I mean, you smile and laugh a lot because you like what you do. But you've also done a lot of things to get there that you like. Because if not, you wouldn't be there. And I have all my career done things that I enjoyed.
And I really believe that if you don't like your job, you should do something else. Because life is too short to kind of work against your joy. If you know what I mean.
You also like skiing.
Yep.
You just had an accident.
Oh, a couple of months ago I crashed and broke my shoulder, correct?
So what is your attitude to risk?
Oh, that's a good one. Personal risk high.
Business risk I would say average, in the sense that I would not gamble with a business that I don't own. If you know what I mean, I act as a CEO of a public company, I act on behalf of the shareholders. So I try to put myself in the role that I'm actually dealing with your money, and that's why my risk profile is less on my job than it is private.
What do you read?
Very little. I have to be honest with you that I'm not calm enough to sit and read a book.
And I'd much rather be with people, traveling, being at different events and getting, what should I say? My lesson and education by being with people, than reading text. Of course, when I studied, you know, I had to read.
But lately, I read articles and of course, I follow media very closely on the industry and sports, and I would say the world in general. But I currently do not read books because I can't sit quiet for long enough time.
I really appreciate you, you've been sitting so long already.
No, but now we're speaking, so it's a dialogue. But reading a book is like, I tend to get on my phone or watch a little bit what's happening somewhere else, so I'm not calm enough.
What do you watch? Do you watch anything else than sports?
News, sports and news, nothing else. But I have to tell you a book because it's maybe old-fashioned, but the book that there's two things. First of all. In school, the most important thing I learned is accounting. Because I think when you know accounting and you do understand how to read a balance sheet. Or you know if something is expense or capex, what is cash flow and what is P&L? When you do understand those things, no one can bullshit you. So the most important thing, advice I say to my kids, even if they're interested in marketing, understand accounting, because it's the base for everything.
If you don't understand accounting, it's difficult later to understand why things are the way they are. So that's advice number one. Advice number two is that I'm so old-fashioned that the best book I read was Philip Kotler. The basic principle of marketing the four piece because they are as relevant as they were then. And the four piece is always, when I think about it, the most relevant things when I look at a business issue.
We call it different things, but I think he boiled it down in the four piece very well.
I think it's interesting because we always ask people, what is your advice to young people and learning accounting? It's the first time I heard that one.
I know, but it's because when you understand a balance sheet and you understand a P&L, every decision you're then making, you understand the consequence of those. So it's like, it's difficult to bullshit someone that understands the accounting principles. And there's many times that marketing or salespeople are getting manipulated by finance people because only the finance people knows the consequences. And people are always surprised by me that I'm very quick when it gets to the accounting side of it because I learned that very, very properly.
Well, Björn, it's been tremendous to have you on. You are doing great things with Adidas. We very much look forward to tracking your progress and big thanks for being on the podcast with us.
Take care.
You too.
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