Meet the new CEO of Adidas, by Sven Afhüppe and Grischa Bower-Rabinowitsch.
Adidas shares rocketed 9 percent after the sportswear maker appointed Kasper Rorsted as its new CEO. He spoke with Handelsblatt shortly after the announcement.
If Adidas gave its newly-named CEO Kaspar Rorsted a signing bonus, he was worth it. On news of Rorsted’s appointment, the sportswear maker’s market cap rose by €1.7 billion. His current employer, Dusseldorfbased consumer-goods conglomerate Henkel, was less amused. The company’s shares tanked after the announcement, knocking nearly €800 million off Henkel’s market capitalization.
Investors hope that Adidas — which has lost market share to rival Nike in recent years — will get a better sense of direction under Rorsted, who comes with an impressive track record as CEO of Henkel, whose share price has tripled during his tenure. In his first interview since the news of his appointment, he talks to Handelsblatt about his switch to Adidas, the global outlook for consumer brands, and the lessons he’s learned as a CEO.
Handelsblatt: Mr. Rorsted, a lot of people are worried about the global economy slowing down, especially China. Are the profits of German companies like yours too dependent on China? Rorsted: Absolutely not. Less than 10 percent of [Henkel’s] turnover comes from China. And anyway, I’m optimistic. China is changing from a purely industrial society to one based on both industry and services and that’s a good thing. I expect in three or four years, we’ll have substantially higher Chinese turnover than we do now. We are not changing our long term investment plans in China. And not in Russia either, by the way.
What about Europe?
Europe will continue to have difficulties. Europe has been in crisis more or less the whole time since 2008. A lot of problems are just not being solved. Structural reforms have not been tackled. Greece is still a long way from sustainable reform. And unfortunately, there are also the problems in Russia and Ukraine. It comes down to this: In Europe, for various reasons, we have been unable to solve a number of fundamental problems. And now, we have the refugees on top of that. In itself, it wouldn’t be such a problem. It is the accumulation of problems which is making things difficult.
After eight years as CEO of Henkel, you’re leaving for the top job at Adidas. Any special reason for the timing?
[At Henkel] we are about to start a new strategy cycle, and that would mean staying for another five years to implement the strategy. And I also think a CEO shouldn’t run any company for too long. So for me, it was just the right time.
From suds to sneakers: Kaspar Rorsted leaves Henkel for Adidas.
Sport is my great passion, that’s always been clear. Adidas is a fantastic brand, with a lot of connections to my own life. My first handball shoes when I was a kid were Adidas. The model was called Mexicana. To be successful as a manager, you should either come in with a passion for the company or you should develop one.
What are your plans for Adidas?
The CEO there is still Herbert Hainer. Once I start at Adidas in October, I’ll be happy to answer all your questions.
Adidas is a public company, at Henkel the main owner is a family. Does family ownership make it easier or harder for a CEO?
From my point of view, it is enormously helpful, because we know that we can’t be taken over. And in terms of decision making, it is very useful to have the majority of shareholders sitting there at the table, so you can know what they think.
You arrived at this German family company from a more American-style corporate culture. How was the clash of cultures?
Every shareholder has limits to their patience. It’s the same for the family. They will lose patience if the company doesn’t do well long-term. They have a long-term view and I brought my focus on performance. The combination didn’t hurt the company.
Does German industry have the strength and passion to succeed in the digital economy?
Yes, absolutely. Germany is well on its way, especially in engineering, though we’re worse at selling ourselves because we’re a nation of engineers. But it won’t happen overnight. Digitalization of industrial processes and equipment will take a long time and a lot of investment.
Europeans always see a threat where Americans see an opportunity. We’re already regulating without even knowing why.
Does SiliconValley have a permanent edge over Europe?
The Americans have a basic competitive advantage because of Silicon Valley. Berlin has made huge progress — there is no other European capital which has as good a position as Berlin, not even London. But we have to make sure that we’re all networked in Silicon Valley. Thankfully, a lot of German companies are on the ground in America.
Why is Europe at such a disadvantage?
The Americans have a much more liberal outlook when it comes to innovation. Take Uber, for example. In America, it’s leaping from success to success. Here in Europe, we’re trying to ban it. We always see a threat where Americans see an opportunity and a business. We’re already regulating without knowing why we’re even regulating, where a business might develop.
What are you most proud of as you leave Henkel for Adidas?
We’ve put together a really good team. For example, our supervisory board could immediately name a successor. One of my key goals [when I became CEO at Henkel] was to make the management team more competitive and more international. And we’ve done that.
So hiring policy is the key factor for you?
Absolutely. It has to be on the agenda from Day 1. It is one of the most important tasks facing the CEO and the chairman of the board. Those two have to make sure you aren’t forced to make off-the-cuff decisions. It is a long-term, strategic task. I hope I’m the last outside manager to have ever joined Henkel‘s management board.
Adidas has lost ground to rival Nike as well as newer upstarts like Baltimore-based Under Armour.
Sven Afhüppe is Handelsblatt’s editor in chief. Grischa Brower-Rabinowitsch is the paper’s company and markets editor.