A Brief Overview of Adidas’s Journey
Adidas is one of the leading manufacturers of sportswear in the world today – being the largest manufacturer in Europe and second-largest in other regions of the world. However, this rise to success hasn’t always been easy, especially with competitors like Nike around. In 2017, Adidas overtook Nike’s Jordan’s – a feat previously thought to be unachievable. It was the same year when the US sales for Adidas sneakers went up too 11.3%, almost double the amount from the previous year. High-performing sports shoes from Adidas have now become a benchmark for sports fashion. This series of success sealed Adidas’s fate as a leading global brand in sportswear. So what did the company do differently that year? What new strategies did they implement to reach their target? And most importantly, how did they outperform their competitors?
The Secret behind Adidas’s Comeback
Right from its inception, the brand has always channelled innovation through its products. However, driving innovation is no mean feat – it requires constant work. Unlike popular opinion, innovation need not always be inspiration struck. Rather, it can be strategised and Adidas did that quite well.
In 2006, right after buying out Reebok, Adidas had to restrategize their approach to business. They were short of resource and were facing declining brand value at a time when they needed it the most to emerge as a global leader in innovation. Instead of compromising on their values and goals, Adidas started out by incorporating Design Thinking elements to optimise on available resource and deliver innovation.
The brand started changing their corporate culture to focus more on the collective human experience. Executives in the company started observing how their employees worked and learned new insights from their collective experiences which would bring radical changes to their product and marketing strategy. What they lacked in resources was made up by utilising the existing ones in creative new ways. They created more open workspaces to encourage free work styles and better interpersonal and interdivisional communication. This small yet significant change in the company culture led to efficient and effective communication which ultimately led to faster results.
Adidas also set up the “Learning Campus” to address knowledge gap and improve internal learning and knowledge sharing. The learning campus trained employees to become more aware of the company values, efficient at their jobs and contribute towards the company goals in a better way. The learning exercises also involved iterative experiments to discover new ways of doing things where even the failed attempts were shared and celebated to encourage creative outputs.
This new strategy was able to successfully drive more employee engagement and keep them motivated towards a collective company goal. The collective company consciousness was effective in reaching the targeted production numbers even with limited resources. This new strategy of “Create the New” was successful financially too as the sales increased by 18% with operating profits at 7.7% – a visible increase from the previous years business numbers. This success of Adidas resulted in a 67% increase in its market share prices.
Almost like a representative of this new change and success, the Adidas Superstar sneaker appealed to the customers with its retro trend and created a stir in the fashion world. Consumers didn’t mind paying the big bucks to become a part of this new fashion era. The company even revamped its marketing strategy to reach out to non-athlete representatives and social influencers as they resonated more with the young consumer base.
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How did Adidas Use Design Thinking to Drive Innovation?
As a strategy Design Thinking is based on four main concepts:
- Ambiguity: Design thinking aims at resolving the wicked or an ill-defined problem and it starts by accepting the obscurity of the problem.
- Creative: The crux of design Thinking is innovation – the ability to think like a creator rather than an executor and to create solutions that are predictive.
- Curiosity: A curiosity towards understanding the requirement is important to keep ideating along those lines.
- Iterative: Realizing that a non-linear repetitive process will work best to eliminate failures and reach towards an effective solution.
At the Adidas headquarters, design thinking is the power fuelling constant innovation.
Changing a corporate culture is not easy and takes a lot of time. Adidas did it nonetheless and it was made possible due to the company’s design thinking strategies. Design thinking always attempts to celebrate the human element in any kind of experience by innovating solutions accordingly. When Adidas connected with its employees and flattened the hierarchical structure of communication in the company, it was truly able to optimise its resources and emerge as a team committed to its goals.
Today, if you were to visit the company headquarters, you would find people working across departments, often blurring the lines between domains and areas of expertise. This exposure and free access to all the business elements not only nurtures ownership but also drives innovation.
Adidas identified the need to put people first, whether they were their consumers or their employees, and it definitely proved to be a successful strategy. To learn more about how design thinking helps you craft human-centric solutions, follow our design thinking category.