Four essentials of leadership.
In the wake of glasnost and perestroika, we learned that the people of Eastern Europe wanted four things - freedom, Levi's, Ray-Bans, and Reeboks. So it is around the world, as we transition from a time when America's biggest exports were armaments and food to one when foreign markets crave our movies and life style products - those things that embody our values and culture at a price the common man can afford.
Reebok is intent today on replicating in foreign markets its phenomenal domestic success in the athletic footwear industry. We haven't yet fulfilled all our ambitions, but our experience so far may have taught us some lessons that may have meaning for other U.S. companies.
Reebok has enjoyed exciting growth in the U.S., with revenue growing from $12 million in 1983 to $2.16 billion in 1990, and with continued strong growth expected. In fact, this camouflaged a tough decision that we faced in the mid-1980s - a choice between keeping our sales growing rapidly or slowing up and building the infrastructure necessary to manage and control the much bigger (than-we'd-ever-anticipated) company we'd become. We went for growth. Then, the rapid growth abated and we spent the 1987-to-1989 period building infrastructure.
Partly due to our structural weaknesses during Reebok's hypergrowth, we quickly achieved significant penetration of international markets - basically, it was success by default. Joe Foster, president of J.W. Foster, a predecessor company, didn't have time for elaborate planning and control. He simply picked good people and put them in the key international markets. He was too busy to manage them to death. As a result, most of them flourished. This affirmed, again, one of our cultural attributes, for Reebok is a place where ordinary people achieve extraordinary things.
Today, with a solid management infrastructure in place domestically and abroad, Reebok's growth is quickening again. This time we aim for controlled, managed growth, but at a rapid rate.
We haven't lost sight of what our own mistakes have taught us.
In summary, we've learned that, at least for us, global leadership comes down to four essentials: * You've got to make a difference - in your products, with your people, and in the values you project inside and out. That only happens in an environment in which freedom of expression is encouraged, as it is very clearly at Reebok. * Listening to the customer is the foundation of any flourishing business. Overseas, it means adaptive sales, and marketing that reflects local, national, and cultural differences. At Reebok, we believe in centralized finance, production, and research and development - but definitely not marketing. * This extends to all the other inputs and skills that go into building global brands. That's why we create power centers in all our key markets. That's the level where reinvestment decisions are made and implemented. It goes beyond business to being involved in each market as a cultural participant. * Abroad, as in the U.S., we believe that consumers buy a company when they buy a product, so Reebok stands for something. We spent $10 million to sponsor the Amnesty International Human Rights Now! tour. Reebok was the only U.S. corporation to be part of the steering committee for the National Welcoming Committee for Nelson Mandela in 1990. We fund scores of projects to combat bias and encourage free expression - and that's in addition to the sports events we support that are close to our product offerings. We are committed to encouraging freedom of expression and other human rights around the world; we seek to foster a sense of a global community.
Today, Reebok is No.1 in major offshore markets like the U.K., France, Canada, Spain, Sweden, Australia, Hong Kong, Colombia, Singapore, New Zealand, and Malaysia. We attained our leadership position in each of these markets via domestic strengths: innovative products, state-of-the-art distribution, sales and promotion excitement, and efficiency in sourcing.
However, by working with local distributors within our overall global marketing, we have achieved quick market penetration by identifying and responding to the unique needs of each market.
Now, as the growth of the athletic footwear industry moderates in the U.S., as it has for so many other industries, we see exciting prospects offshore. We see no magic formula beyond what our own experience has taught us - that empowered local managers, supported by our culture and sensitive to the needs and preference of their neighbors, can achieve a lot, especially if they set out to make a difference and distant headquarters staff stay out of their way.
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|Title Annotation:||Special Section: Being a Global Leader; views of Paul Fireman, Chairman and CEO of Reebok International Ltd.|
|Publication:||Directors & Boards|
|Date:||Sep 22, 1991|
|Previous Article:||Brand power and determination.|
|Next Article:||Internationalize and be innovative.|
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|Running with Reebok: back in 1991, Reebok's CEO laid out the four essentials of global leadership.|