Hi everyone and welcome to our podcast in Good Company. I'm Nikola Tangen, the CEO of the Norwegian Sowing World Fund and your host today. In this podcast, I talk to the leaders of some of the largest companies we're invested in so that you can learn what we own and meet these impressive leaders. Today I'm speaking to Björn Julden, 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 crores or over 500 million dollars. Björn 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. Hello. Hi. Björn, I'm Börjör, I'm a German journalist, but given that we have an international audience, we may want to switch to English or German. Can you speak German? Not too much, but... We're doing it in German. Okay, everything's good.
Björn, great to have you on. Really fantastic. Not so many international Norwegians here, so really great. Now, you guys make like 400 million pair of shoes a year. What are you, what are you wear today? Which ones have you gone on? I have a sambal. sambal. Would you mind just taking it off and we can have a look at it? But only the shoes, I don't take it, all the things off. Shoes are fun, shoes are fun. We start with the shoes. So why do you wear a sambal?
It's excellent now, but sambal is actually the coolest shoe in the marketplace now. It's an old shoe that came out of soccer football. And of the last six months, it's developed into be probably the hottest sweet shoe around the world. So what demand is much bigger than supply. And you know, I'm in all guys, I'm trying to get young. So I dress like the kids do and that's why I'm wearing the summer. Yeah, I'm trying the same, but it doesn't quite work so well for me.
But 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, it's 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 fastest side of it, you know, I'm more mainstream. So I follow what I see the trendset as I 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 white sole, a white last. And with, I would say extra nor a 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. I will and which is very light that actually makes you run faster. And also it depends on what I'm using it for. But I'm very particular when it gets to the footwear I wear for sports. And then I spend quite some time testing till I find out who, 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 boat in football and in handball. For those of you who know what that is. I grew up in a sports home and had only one passion that was sports. So I also played boat handle 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 have 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 then started studying and then connecting to the sports industry. But I think you've said somewhere that you've got a bachelor's, you've 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 a 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, you know, 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. It's been the best lesson that I've taken with me in my professional career. The education only gives you a background to have kind of the knowledge theoretically, but 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 from humour to to other. That's a big thing. How did that shift come about?
Well, first you have to remember that I spent 10 years without in the 90s. So this is like coming home. So it's not as bad as only going from Puma to Adidas. I haven't 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 or 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, you know, their CEO leaving. And they then asking me a couple of times if I could join. I thought I had a long 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-competent door was open. And then I took the step. And mostly a little bit difficult. But the right decision, I think, for everybody.
I think for Puma for Adi and for me. Now, you were only Adidas clothes for the moment. What are you done with all your Puma clothes? Well, it's not only mine. I have three sons who has been in Puma for 10 years. I have a wife and also extended family that has only one 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 the friends.
So now when all the friends of my kids copped 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 kind of 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 quick young woman. Well, it comes from the father.
I mean, it was the dusler, you know, back in the forties 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 are in 49. And since then they were big competitors. And I think the interesting thing is that in this small little door, as you call it, had so an aura, the professional sports industry was actually born.
So if you look back to everything that happened in the 50, 60, 70s, 80s, it was basically how they competing against Puma. And as you said, there were two brothers and very emotional and very, very many stories. Of course, what that did to this small door, many actually funny stories, but also bad stories. And then only later, you know, the Americans with Nike, 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 dustless thing about me, but, you know, it's what you have a big thing to have experience. 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 side of the streets? Or like how split is you even do you eat in the same restaurant? So 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 is different. You know, we have about five and a half thousand people here. I think Puma around 1500. And ironically, many of those have partners working for the older brand. So it's not as tense as it used to be. And, you know, to be very honest with you, I'll rather have Puma be successful than an American company.
So as competitive as we are, I think we are 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. And 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, Adi does 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 of your surname. So what happened during those years? Oh, it's a long story. I think that Adi had everything going for them through the 1718, 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, which was a D2C 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 corporation with Kanye West, the ESA business. And so there were many things that happened at once that, 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 sweet 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, an artist is a little bit different because as you know, I've been here before and I've 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 extreme, depending on the people. And that's why I always say that my biggest role as a leader and coach is actually HR.
And 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 products on the performance side. So, you have the right, you know, technologies and the products that people can actually perform. Right now, as you can see, you know, we had the right product coming out of the women's workup, 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, sports markets. You need to combine both.
And there, you need to connect to the 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 the month. So, it's 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 how do you pick these ambassadors and athletes?
Mostly by of course following the advice of the people in the markets and be very close to what is going on in sports is of course to try to pick their athletes, female or male that are the best but also have a personality. When it gets to influences in general, it is to find out who has an impact in the different markets that might be very local. And then you need to 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. Sometimes the disadvantage of going with the with the big names is that sometimes they become very dominant and you kind of had this issue with with Kanye West. So, 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 will call sweet culture. So he is extremely creative and has to get rid of the you know, created a easy line, which was very successful.
And then as creative people, you know, he did some statements, which wasn't that good and that course started to break the contract and we draw 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 collapse in the in the history, very sad.
But again, you know, when you work with third parties that could happen and you know, it's it's part of part of the game that can happen with an athlete, it can happen with entertainer. So, it's part of the business. Yeah, we're seeing it in many industries. We're seeing in didn't they spirits business with tequila, vodka and so on as well. No, no, I don't know. What are the technological trends that you're seeing, which you are excited about in your industry?
Well, the product side is it is of course on the running side is being lighter materials and it's being 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.
So, you see that you see lighter materials and then you will see and I started to see a lot of sustainable materials, you know, materials that doesn't come out of oil or anything that damaged 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.
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 core of it, it's everything that has to do with materials and the product itself that 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 then it's also starting to, what should I say, be taking decision making product when it gets to product loans, volumes. You can't use only artificial intelligence when you do that. You also need to use a little bit your human intelligence. 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 speed is a mindset. And you say that speed is becoming more and more important. Why is that important?
Well, first of all, because it changes very quickly. As I said, over the last three years, we've had a pandemic, which, you know, none of us have experienced and none of us learned in school or in life how to deal with. I think speed and flexibility was enormously important. Then you had the fried craze 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 was changing. And then you had markets that were shut down because of COVID or all the reasons. So you know, speed to have an organization that see 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 certain degree of intuition.
And how do you get the speed up in an organization? People. And how do you do that? Of course, it's it's I this is a many different opinions about it, but I believe in a more decentralized organization because I think markets move in different faces.
The differences between China and the West and world, for example, on consumer taste and and things has become much bigger. The differences between us and Europe has become bigger. So you need to make sure that you work in a matrix that is more locally focused on the old which has a 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, and yet even more important in a in a in a situation like that.
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 intelligence people that that are able to move in a matrix and can actually make decisions or 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 that this industry and I think consumer product in general is not where you should be. But it's slightly at odds with with German corporate culture because I'm not joking, but I mean speed you talk about speed and agility when I talk when I think about German corporate culture, I think about old known hierarchy process systems.
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 an LA and Portland in the US and in Shanghai, the sum of those four offices is headquarters.
So I don't look upon this as being only one headquarters and since the headquarters official 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. Are you two fast sometimes? Yes. So what's the advantages and disadvantages of being fast versus the process?
I think the advantages if you have a leader that is on par with what's going on and you have, you know, your people around you, you together can make fast decision. 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 then you make decisions, you know, always write, right?
I always say to people, are rather have you make a decision and be wrong, they're not making a decision only wait. I don't need people to wait. So I think that making decisions based on the facts that are there and certain intuition is better than, you know, 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, is the absence of a bullshit, you know, very truth seeking, very honest, very transparent. Why, why, why things important? I think that A has to do with personality, but I think also experience, you know, I've been in this industry so long and I've done many mistakes and, you know, I think I have certain confidence that I'm not afraid.
Being honest has to do with also having a certain confidence, you know, I don't need to act or play something I'm not, I am the way I am. That's why I'm never tired of my job because I can be myself and I think that's a huge advantage that you don't have to act, you know, to be something, you know. Most people I know that gets into, you know, 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, you know, people understand that they can deal with me. It doesn't matter if you are the lowest on the hierarchy or the highest, I treat everybody the same and they can treat me as a colleague. The only time is when hierarchy counts is when we disagree, then I have to decide.
And the less decisions I take, the better it is because then it means that someone else have taken the decision that I agree with. Do you think this learning from mistakes and seeking the truth is to link to sports and to performance culture?
Yeah, I mean, if I can find an ex-adlet, a male or female that also has, you know, the, what should I say, the, the, the, the, the, what you call it, the education or, or, or it's interesting, the topic, then I, I love to hire them because athletes has, I used to pressure, I used to compete. And that is things that is very, very important also in, at least in our industry. So I love to work with the ex-adlets.
I hadn't ever thought about what you said about the burnout and it's maybe people who are pretending, what would you mind just elaborating it on the better? No, I think that, you know, 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, to be that cost a lot of energy.
And 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 burnout. I think if you can act the way you are, of course, serious and also with the knowledge, but, but you don't need to play a different person. I think you, you save a lot of energy and, and life is easier. In our jobs, at least in mine, it's like, it's not really a job, it's a lifestyle. I mean, I, I am, you know, CEO of Adidas 24-7.
And, and I live that role, you know, and, and as long as I feel I can be that with my personality, I will, I will, I will do it and, and be that person. If I feel that I don't fit anymore or, or then, then I will quit because I think as a leader, when you don't it for a while, changing your, your way of doing business, I don't think it works. And 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. Yeah. So how many people did you give it to? 60,000. How many calls do you get? I mean, calls and text messages and what's up? Many. But, but I, but I think this, I mean, my point is that they should have access to leadership.
And if they have something which is important, they should be feeling comfortable going direct. So I get, I would say, you know, couple of hundred direct messages every week that I tried to respond to in one shape or form. I take the topic that they raise and then addresses it in a town hall. And 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 to the direct contact and bring them up. So it's a way of having people understand they can go straight to the to the boss without having to be afraid of someone else seeing it or, I mean, you know how people are.
I love it. I love it. I love it. Now, when do you, when are you in the flow? When do you thrive the most? When do you feel, gee, I'm so lucky. 24, 7. It's like. To be honest, being the CEO in this company and in this industry is amazing. I just landed from Sydney yesterday having one with Spain, the women's workup. And I'm after this cold 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, you know, being in the middle of sports, street culture, fashion, working with, as I said, 120 nationalities on headquarter, 50% men, 50% women. I don't think there's a better job to be honest. So I don't know if that's called in the flow, but I'm very happy where I am. Well, I mean, slightly, I actually think I have a better job, but hey, but it's true. When you have found it's not a job, right? It's just, yeah.
But, you know, we are privileged because we got in there because we have done anything that that we thought were fun. I don't think you get to the top either in sports or business. You do things you don't like. I always say that an athlete who our world class has to do 10 to 12, 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. I think it's the same in work. You know, it's like, I mean, you smile a lot because you like what you do, but you also don't a lot of things to get there that you like because if not, you wouldn't be there.
And I, you know, I have all my career don't think that I enjoy it. 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. You know what I mean, you also like skiing. Yeah, you just had an accident a couple of months ago, sky, and 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. I tried 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 in this 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'm much rather be with people traveling, being at different events, and getting what should I say my lesson and education by being with people and reading text.
Of course, when I studied, you know, I had to read and but lately I read articles and of course I follow media very closely on the industry and sports and I would say the Berlin Journal, but I currently do not read books because I can't sit quite for long enough time. I really appreciate you being sitting so long already.
No, but now we're speaking. So it's a dialogue, but reading a book is like I tend them 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? You watch anything else in sports news, sports and news, nothing else.
Why the? But I have to tell you a book because it's 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 something is expensive,
you know, that's the most important thing is that there are topics and what is cash flow and what is PNL. 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 interest 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 there
and what it was the most two is that I'm so old fashioned that the best book I read was, you know, Philip Kotler, the basic principle of marketing, the four piece because they are as relevant as they were then. And the four pieces 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 PNL every decision you're making, you understand the consequences of those, you know, so it's like it's difficult to bullshit someone that understands the accounting principles.
You know, there's many times that marketing or salespeople are getting manipulated by finance people because, you know, only the finance people knows the consequences, you know, and people are oversupprised by me that I'm very quick when it gets to the accounting side of it because I learned that very, very properly.
Well, it's been tremendous to have you on. You are doing great things without it us. We very much look forward to tracking your progress and big thanks for being on the broadcast with us. Take care. You too.