Change in an organization in Adidas

Change in an organization in Adidas

Change in an organization essentially means a modification of the way things get done (Fossum, 2002). For a company to succeed, there has to be a culture based firmly on a shared set of beliefs right from the top. These beliefs inform strategies, decisions, and even the kind of employees that are recruited at the firm. Organizational change is dangerous, but if implemented successfully, it sets the company on a path to a successful future.

We will focus our attention on Adidas. One of the largest sportswear and shoe manufacturers in the world. When the company hired a new CEO in 2016, they were doing well. He saw the company’s strategy to be working but also an opportunity to make it more holistic by focusing on building customer loyalty. Three key drivers of change chosen were:

• Globalization – Before, the company had a marketing strategy for different countries designed to take advantage of the specific region. However, the world is more interconnected than ever. Trends originating from one area quickly impact the world, fueled by social media.
• Increase corporate profits – The goal of every company is to create profit for its shareholders. One of the highest costs for Adidas was returns. Sometimes manufacturing 1,000,000 pairs of shoes and having to sit with about 700,000 as inventory looked counter-productive. By cutting down on operational and manufacturing costs, there lay an opportunity to increase profits for the shareholders.
• Changing lifestyles – Another opportunity to deliver fitness products to its customer base and do their part in conserving the environment by partnering with different companies in the environmental sector. People are also paying close attention to global warming and how various organizations plan on improving their customers’ well-being, going green, and general ecological conservation measures.

Action Research Model

Diagnosis is the first step in this process was to identify the problem at hand. The task at hand was how to make Adidas customers loyal to the brand.

Action planning is the process of engaging with the clients to find out alternative paths of action from the key drivers of change.

Taking action is the step where you come up with solutions to the question posed in the diagnosis. The team at Adidas came up with three desired outcomes, namely:

• Think cities, Act globally – Six cities were identified that have a massive impact on trends globally. London, Paris, New York, Los Angeles, Shanghai, and Tokyo. By dominating these cities in terms of customer loyalty and market share, and tapping into the creative ideas coming out of them, Adidas saw the potential to hold to their customers.
• Making shoes to order – The problem here is apparent. By cutting on costs on sitting inventory, Adidas saw the potential to save time and millions of dollars. Adidas set up two speed-factories or rapid-production plants in Ansbach, Germany, and Atlanta. In these plants, the order-to-time delivery can be days instead of months, and this is the direction they want to take going forward.
• Take the lead in fitness gear – With a 4% growth globally, there is a lot of untapped potential in the fitness gear category, and Adidas plans to take the lead in this market category. Adidas also made a partnership with Parley for the Oceans to make shoes out of plastic recovered from the ocean. This move will only endear the company to the customers even more.

The next step is evaluating the action taken where the company looks at the alternative measures and how they are impacting the market. It is still early to pass judgment, but the feedback so far has been excellent.

The final step is specifying learning, where the results can be used to impact the direction and future decisions for the organization.