A new generation of more international Adidas executives is trying to loosen a hierarchical structure that has held back creativity at the venerable German sports brand as it tries to retaliate against Nike.
But that is a tall order for a company of 52,500 employees still based in the small Bavarian town where it was founded in 1949, now struggling to keep pace with the fast-changing whims of the urban teens who are its target clientele
“The whole organization is run so Germanically and is not fast and agile where everybody is empowered,” said Erich Joachimsthaler, head of strategy consultants Vivendi Partners.
As disappointing performance, particularly in the US market, has hammered the share price of late, long-serving Chief Executive Herbert Hainer, 60, has promoted a raft of younger managers ahead of his own expected retirement in 2017.
Leading the new guard are 47-year-old American Eric Liedtke, global brand chief since March, and Roland Auschel, the 51-year-old German named as sales chief a year ago.
Forced to ditch ambitious targets set for 2015, Liedtke and Auschel are working with Hainer on a new five-year strategy to be presented in March, but they are taking action already.
Adidas and smaller sportswear rival Puma are still based in sleepy Herzogenaurach, Germany, where they were founded by two brothers who fell out with each other after World War Two.
Liedtke has moved several executives to the firm’s US base in trendy Portland, home to Nike, as he seeks to reverse the brand’s decline in the world’s top sportswear market, important not only for sales but also for defining global cool.
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Despite buying US brand Reebok in 2006, the German firm that is strongest in soccer has struggled to break into sports like basketball and American football, recently slipping into third place in the United States behind Nike and fast-growing Under Armour, founded only in 1996.
Its distance from the US market and top-down structure have contributed to missing trends pioneered by Nike like its “FuelBand” fitness device and “Free” barefoot-feel running shoes, as well as being slow to catch on to the “Athleisure” trend that has seen sports leggings becoming the new denim.
Liedtke, a former American football player who joined Adidas in 1994, has therefore revived the role of global creative director, and appointed Paul Gaudio to the post in Portland. Gaudio also plans a creative studio in Brooklyn to be led by three former Nike designers.
America has long been an obsession for the Herzogenaurach sportswear firms. “The American market is about cool things that work. It’s a blend of sports and lifestyle, sports products that also have a street appeal and that is what we also see developing into Europe,” said Bjorn Gulden, a former Adidas executive now trying to revive Puma as CEO.
Liedtke and Auschel have named 12 new direct reports in recent months, including Mark King as new North America head - the first American in the job for a decade. American, British and French executives now far outnumber Germans in their teams.
More products for the U.S. market will be developed in Portland in the future, while Adidas has signed top basketball players and celebrities like Kanye West and Pharrell Williams.
Even when Adidas is ahead with an innovation like the “Boost” cushioned shoes that Liedtke helped develop in his previous role, it has not done enough to follow through with Nike-beating marketing, a failing it is now addressing.
