When Blake Lundberg heard the news about the NFL ending its deal with his company, he knew it was time for a Hail Mary pass. For 11 years, the Sports Licensed Division of the Adidas Group LLC manufactured licensed apparel and uniforms for the league. But the NFL said a competitor had outbid Germany-based Adidas and its Reebok brand.
The company was about to lose a big piece of its revenue. Some analysts say the NFL job was worth $200 million annually to the Indianapolis facility.
“The lifeblood of the licensed apparel and headwear business is your license with these leagues or universities,” says Lundberg, vice president and general manager. “You depend on those deals; if you don’t have them, you simply can’t survive. It’s that straightforward.”
He was used to changes happening quickly, and this didn’t give him a whole lot of time to find new sources for revenue and ramp up employment to support them before the contract ran out. But the time factor wasn’t the biggest concern ― hot players and hot teams came and went, and to keep in business, usually meant having an ace or two in the hole.
“A product can become pretty obsolete quickly,” Lundberg says. “When Peyton Manning got hurt and he’s not going to play for the year. Or when LeBron James decided to move to a different team. When Barry Sanders retired out of nowhere. Once Michael Vick left the Atlanta Falcons, nobody wanted a Michael Vick jersey.
“The obsolescence of a product is critical. It’s a mix of, ‘I’ve got to have the right finished goods on the shelf and specific players,’ and, ‘I can’t have too many in case they become obsolete based on a player trade, a player retiring or a player getting injured.’”
Fortunately, the division management team had experience with reacting quickly to changes to find solutions.
The most logical route was to take a step back and see if there was some new business that could be developed and to possibly transfer and build up some operations the division could take on from other parts of the Adidas Group.
Lundberg and his talented leadership team had the business acumen to study the company’s strengths and convince Adidas corporate officials to transfer more existing business, such as from the NBA, to centrally located Indianapolis. A big selling point was that the plant could turn around products quickly as compared to other companies that had facilities in foreign countries where it can add weeks to the process.
In addition, some promising new lines were examined. They would be added in previously untapped areas such as high school sports uniforms and apparel, NHL team uniforms, club sports and sportswear connected with the Crossfit Exercise program.
Here’s how Lundberg focused his employees to take on new challenges and drive revenue for the 1,350-employee company.
Focus the managers
A company should really understand its strengths and weaknesses if it wants to succeed and grow. Lundberg was fortunate in that his management team knew it had bench strength ― most members had been in their positions for years and knew how to assess a situation to find a solution fast.
It was no accident that the team had a mixed bag of experienced managers. Many came from previous incarnations of the company, going back 12 years or so. Lundberg found that to encourage flexibility and creative thinking, some company veterans could anchor the group while some fresh but experienced faces from outside the company as well as outside the industry would add additional insight.
“The management team today is virtually the same that it was years ago,” he says. “We took over the management of Logo Athletics [a previous incarnation] and young Logo Athletics people stepped into more important roles. They really knew this business.
“The other thing we had the ability to do is to go out and hire industry veterans, people from Nike, people from Starter, people from Pro Player, people from our competitors that had really gone all by the wayside. Then we hired outside the industry, so people were experts in IT, and human resources and event planning.
“That really was an interesting mix if you think about it. The one thing that we have done the best is to have kept that group together. You all should really understand your strengths and your weaknesses. You can go into a staff meeting and disagree and have issues and argue constructively, and then come out, locked arms, on the same page, and say, ‘Here’s what we’re doing.’”
Look at people options
When a company launches a new line of products for a new division, it brings some challenges for its production team as well as for its human resources department to add more staff. You can tap an agency to send you temporary workers or you can add full-time workers. Either way, you’ll have to decide how to handle the workflow if the new business means running extra shifts around the clock.
“You will definitely face some service challenges ― ‘Hey, I’m doing all my existing business, plus now I’m going to pile on all this new business?’ And you probably have a finite amount of capacity,” Lundberg says.
He found mixed results with the temporary employee route for production work, and suggests the full-time seasonal route instead. This ideally would allow for more control over product quality.
“We don’t try to use the temporary route, for the most part,” he says. “We’ve looked at that. We might try it again.”
What you do what to try as you ramp up hiring is to look for people who can think on their feet and who will be in synch with your company.
“You’re looking for good talent, people who have the ability to adapt and people who have the ability to learn,” Lundberg says. “When you interview people, look for who’s going to fit within the organization. You might not hire the person who is technically right for the job. You really should be concerned with somebody who fits in.”
As far as compensation issues, your company’s practice should be to reward the best performers, as is done in many industries, but with a twist.
“Institute a labor incentive plan, not a piece rate,” Lundberg says. “Base it on engineering standards, accuracy and productivity and efficiency. You grade out at the end of every week.
“If employees are above standard, they get paid a bonus and an incremental bonus based on how much they are above standard. If they are below standard, they’ve got X number of weeks to get back up to standard. If they don’t, they’re out.
“It’s a very, very objective measurement tool to use in distribution and manufacturing. There are two schools of thought. I’m going to pay you X dollars an hour, you come in and I am paying you to do a job, and it is what it is, or I’m going to pay you X dollars an hour with an upside for the people who are really good.”
Going hand-in-hand with your search for manufacturing employees should be your search for qualified management trainees. There, a different approach is needed to bring you results.
“It’s very different to hire people in the front office versus hiring packers, screen printers, embroiderers and people who work on the shop floor,” Lundberg says.
His experience showed him that recent college graduates are the preferred material for management trainees. On-the-job training offers senior management an opportunity to observe the would-be managers.
“Design a 24-month program,” Lundberg says. “You rotate through, say, six different departments, four months per department, to get you to the 24th month. Then you slot them into a full-time job, something that they like, that they’ve learned, for the first 18 to 24 months.
The time spent in the program will serve to groom trainees for their specialty.
“I have a tough time believing that the majority of new college graduates know what they want to do,” Lundberg says. “They want to go to grad school or they want to be a lawyer, they want to be a doctor, or in some professional environment, something like that. We’ve seen that.”
Keep a diet of change
Lundberg readily admits he doesn’t know how to define the word normal. But that’s not a drawback. He’s taught himself that his “normal” can be best defined along the angle of constant change. And it’s his role to see that his employees are flexible and disposed to change.
“You’ve got to be willing to adapt to your environment,” he says. “I think you’ve got to treat people with respect. You’ve got to hire good people and let them do their job. I think that’s very important.
“Create an open atmosphere because you need to make decisions quickly,” Lundberg says. “You can’t be worried about somebody coming to you every time they need to make a call. They’ve got to be able to make it on their own.
“Develop an atmosphere where people enjoy coming to work, give them a good work environment so they can drive and succeed, and give them the ability to make a decision without being afraid of being wrong. Give them the ability to go out there and make decisions on their own and succeed,” he says.
“I think that the majority of people want to do a good job. You’ve got to give them the environment for them to do that in.”
That environment is one that encourages creativity, openness, trust, communication, problem solving, flexibility and feedback. Along with the responsibility of creating that atmosphere comes the opportunity to make errors and be accountable for them.
“People are going to make mistakes and that’s OK,” Lundberg says. “You can’t wait an hour, two hours sometimes to make a decision. You’ve got to make it and move on. People can’t be afraid of making mistakes.”
There are reasonable limits, however ― try not to make the same mistake twice.
“And don’t make it three times,” Lundberg says. “You can’t be afraid in business to formulate your decision; base your actions on those decisions, move forward, and if you’re wrong, you’ll have to re-evaluate, you’ll have to course-correct, and then you have to move on from there. It’s definitely important that you hold people accountable.
“Don’t be a big micromanager. You hire people, and for the most part, they will be extremely successful. Empower people down to the lowest level possible. You want to truly give the associate out on the floor the ability to make specific decisions, obviously within reason.”
At the management level, people obviously are empowered to run their department ― and you’ve got to be able to deal with the departments that are feeding you, a sort of internal customer service, as it were.
“So it’s not only dealing with external customers; it’s dealing with internal customers as well,” Lundberg says.
The goal with these internal customers is to motivate them to always want to get better.
“I think the one thing you have to do a great job of is to encourage people to look for a better way to do things,” he says. “Your IT department probably has a huge list of IT improvements because people are looking for a better way. I think you should keep the workforce motivated to not settle for the status quo.
“Good people breed success. I don’t care what industry you are in. If you hire quality people, and give them the opportunity to thrive and succeed, I think your company is going to be successful, and I don’t care what you are doing.”
How to reach: Sports Licensed Division, Adidas Group LLC, (317) 895-7000 or www.adidas-group.com
The Lundberg File
Born: Bellevue, Wash., outside of Seattle. I actually grew up in suburban Detroit.
Education: I went to school in North Carolina, Wake Forest University. I got a bachelor’s degree in science and business and math there.
What was your first job?
I slung newspapers for The Detroit News. Then I worked at an asphalt plant when I was in high school.
What was the best business advice you ever received?
Be ready to change, because if you don’t, somebody is changing around you. Our business always has something changing here: a new league that we are dealing with, a new big customer, a new process in the back, adding screen-print equipment, adding new facilities. I sit and smile and think, what would it be like to sit back and take a breather for a year?
Who do you admire in business?
This is going to sound sort of corny, but I really admired my father, Dick Lundberg. He owned his own road construction business back in the ‘70s in suburban Detroit. Business then went from absolutely doing very well to doing not so well. He was committed to keeping us in Plymouth until my sister and I graduated from high school. He was 50 years old at that point and I thought it was an amazing thing. I can’t see myself switching careers at 50. Incredibly difficult. I definitely admired what my dad did.
What is your definition of business success?
Giving people an opportunity to succeed and obviously growing a profitable business year over year. You need to continue to grow and you’ve got to do that with the bottom line in mind. You’ve got to grow the bottom line faster than the top line.
Lundberg on working at Adidas: I think people enjoy coming to work for a major sports brand ― for an Adidas or Reebok. To be able to work for two of the largest three sports brands in the world, I think is a great benefit. I think it helps us to attract good people. We’ve got people who want to come to work here because it’s the sporting goods industry. There are people who are passionate sports nuts out there, whether you are right out of college or you are five, 10, 15 years removed from college, they are like, ‘Wow, how cool would it be to work for one of the major sports brands!’
