He says it was his career's worst setback, and he blames getting fired on his bad attitude and confrontational style of leadership. Since 2018, Rrsted has served on the board of directors at Nestl, but the company Egon Zehnder: Is transforming a companys culture primarily a question of communication, then? Egon Zehnder: Of your 47,000 or so employees, more than 80 percent work outside Germany. McKinsey: It seems you spend a lot of time talking not only with consumers but also with employees. Adidas CEO Kasper Rorsted will remain at the helm. Rorsted: It was mostly the intellectual challenge of succeeding in a sector of which I had only a rudimentary grasp at the time. You won't become the leading player with the old styles of management, says the Runtastic CEO, who is continually reviewing his own leadership qualities with the help of a personal coach and a mentor. These trends fundamentally change the business environment. So I do think that it's important that the industry will and can do this, but somebody's got to take the lead and we want to be the leader in sustainability. Its leaders shows respect to their employees by protecting their jobs, challenging them, and supporting them in their efforts to improve. But I think that the most profound difference for us is that we were making it an integral part of our business model. Eisen: We've been talking about so many different ESG issues. Were establishing seven new R&D centers in emerging markets including India, Brazil, Russia, and South Africa. In 2021, women made up 37% of executive leadership roles, an increase of 2 percentage He registered more The Supervisory Board of adidas AG has extended the appointment of Chief Executive Officer Kasper Rorsted by another five years until the 31st of July 2026. performance, management successes and innovative solutions. And once we recruit them, we have to retain them. We are constantly adapting our structures to become faster and more flexible. The management team under the leadership of Kasper Rorsted succeeded in steering adidas and its employees healthily and safely through this unprecedented crisis. That was his second time Sign up for free newsletters and get more CNBC delivered to your inbox. But on Black Lives Matter. This makes Henkel one of the most internationally oriented companies with German roots. But it's a question of time. of Business Thought Leader Series. In fiscal 2011, Henkels EBIT rose to over two billion euros the highest level in the almost 140-year history of the company. If you make mistakes, recognize the mistakes and correct them and move forward to Speaking of super cool products, Stan Smith going 100% recycled. The sportswear giant announced today that its supervisory board extended the appointment of the executive chief for another five years. Since becoming CEO, youve significantly reduced the number of Henkels brands. We have defined a set of leadership principles and shared them with all our people managers worldwide in a series of workshops. Thank you for letting me in. And I have similar views about women in management positions. Rrsted started And if you cant do that, you cant be there as an employee. So successful that the Adidas supervisory board voted last year to extend his contract through July 2026. Speaking at the CNBC Evolve Global Summit, the Adidas. We conducted 670 workshops across the globe, which yielded around 6,000 initiatives for implementation. Born February 24, 1962, in Aarhus, Denmark, Earned a degree in economics from Copenhagen Business School, Participated in executive programs at Harvard Business School, Serves on the boards of international media conglomerate Bertelsmann and Denmark-based industrial company Danfoss. We already have very good people, but we are going to keep raising the bar in the future, as indeed we must. Rorsted: Our first step in 2008 was to conduct in-depth benchmarking against our competitors and hold detailed discussions about our goals for the future. Our people are important to me and I hope that they realize it. Eisen: Well on that note, I noticed that you have a new collaboration with Allbirds for a very low carbon footprint shoe. That was not the case in 2015. "You can only be successful in the long run if you keep asking yourself what can be done better and where potential is still hidden.". Its interesting that you are talking about people. Just a few days after Foot Locker revealed its CEO shift, Adidas said it also will have a new top leader in 2023. Were aiming for growth in both emerging and mature markets. Eisen: Well, that's why you are a great guest to talk about this subject. And some employees accused you of being hypocritical, your head of HR left. It's obviously such an important growth market for you, what 25% of the business, at least. What lessons have you learned that other companies can also learn from? Taking care of what you inherited is very important, But we keep our communications as transparent and clear as possible, and everyone knows our strategy and our targets. This enhances our position as an attractive employer. Sponsors? Weve increased our talent development efforts through collaboration with Harvard and other universities, for example. Some high-profile Adidas brand ambassadors who wear the iconic three-striped hoodies in April. McKinsey: You mentioned the role of your strong brands. We recently opened our Dragon Plant in Shanghaiits the worlds largest adhesives factory. Where do you see Henkel today in this respect, and what challenges are looming on the horizon? But we need to focus on the future. TAMPA (March 9, 2022) Adidas CEO Kasper Rrsteds definition of success is simple I eat with employees in our canteens whenever I am traveling or here at headquarters. The most important part is we're committed to China, as I said, we have three to 400,000 jobs that are depending on Adidas, so we have to make sure that we continue to be successful also in the future. And right now, we're not making the same marginal issue as the normal Stan Smith, but over time, we will be. world, then that is an issue, he said. In addition, I believe the culture of face time that still prevails in Germany is outdated. This allowed us to define our three strategic priorities: achieving our full business potential, focusing more on our customers, and strengthening our global team. What do you miss? Coming out, obviously against hate, and in support of Black Lives Matter. Today, 55 percent of our employees are in emerging markets. is so negative. In addition, the entire Henkel Management Board knows our top 300 or 400 people personally and knows where in the world they are working. Rorsted: If we look, we really see sustainability being an integral part of our business model. It also meant that we had to take some major decisions that were unpopular at first, but the employees recognized our determination. manufacturer Henkel. How do you equip your employees to hit the mark, or how do you find people who can make the leap effortlessly? He said it was his first trip to the U.S. since before the pandemic in 2019. Doesnt the substance play a major role as well? And I also think it's important that the leading company takes a position and show the way forward. And youve been recognized by external experts as a leader in sustainability. Kasper Rorsted: Because Henkel is a global and diverse company, it's crucial that we all have a common understanding of what strong leadership means. This also gave us the courage to stick to our goals and decisions even when things got tough. And I think you'll see that also when we bring it out, it's coming out this year going into volume next year. in the region with housing, food, clothes, and other basic needs. And you need to support it, and I know we've said it before. And for them, it's a very important, you know, criteria. We are very successful there. he said. So I make sure that my employees have also had first-hand experience with difficult times. The company formerly owned the Reebok brand, and the sale of Reebok And I think it should be done less with the personal opinion of the CEO, because the CEO represents the company, but is not the company. 2023 CNBC LLC. In 2018 he won the German Image Award, an honor that praises the top CEO for their We will continue to strengthen our position in growth markets like China, Russia, and Brazil. So when you use reused material, you can completely recycle it or this shoe, which is totally recyclable. And I immediately thought of you and Adidas. In countries where Henkel is hardly known, we prefer to target specific groupsfor example, through partnerships with individual professorships all over the world. So you have technology elements, you know, challenges, you have cost challenges at a given stage. We do not allow anyone to hide behind good business results but fail on their leadership responsibility. The news comes as a shock, especially considering that Rorsted had signed an extension to remain CEO until 2026 on top of his leadership leading to 5x growth in the North American market, that is until the Covid-19 pandemic hit the scene. What does it take to become the leader of one of the biggest and best-known brand names in the world? We dont get all things right at the same Is it the recycled polyester going fully there by 2024? Rrsted started Thats why I spend around 170 days per year abroad, meeting employeesfrom top executives to young high-potential individualsas well as customers and business partners. With this new facility, were expanding our production capacity in one of our fastest-growing emerging markets. On finding the right career, he said, If you work for a company, you have to embody If we succeed in sustainability or when we also succeed as a business, he said. This is McKinsey: In 2013, Henkel began a global rollout of a new leadership-development program. So I think there's going to be a great demand for this product. In recent years, the 137-year-old company has fared wellin large part by dramatically boosting its presence in emerging markets, which today account for 45 percent of its global revenues of 16.5 billion. It was a very can-do attitude. Our current targets extend to the end of 2012, and we have already started thinking about the period that follows. announced that he is not running for re-election and is stepping down from that role Egon Zehnder: How did you master these challenges? the best sports brand in the world. Their hair is covered for hours every day and as a result needs special care. This website is maintained by Muma College of Business. The simplification was the most important aspect. But I think it's a very different job today than in 2008. So in summary, those are my key tasks as CEO: get the strategy and the team right. Egon Zehnder: Listening to you, the change process seems very straightforward and simple. Within Europe, there's tension between Europe and Russia. And he's very keen also to push this innovation along with us. announced that he is not running for re-election and is stepping down from that role I believe this is the most important challenge. If we do not expect to win in a market in a reasonable period of time, we will exit that market. And do we have a successful relationship. I know I always ask you in interviews about Kanye West to comment on his latest rant on Twitter, or what he said about slavery, which you did actually come out against. The following is the unofficial transcript of a CNBC interview with Adidas CEO Kasper Rorsted from the CNBC Evolve Global Summit, which took place today, Wednesday, June 16th. And I also think it's important to understand that we do hire people with very different opinions. And as a company that stands for something positive energy, sport, We need reliable childcare solutions that allow both parents to work at the same time if they so choose. Remaining consistent predictable even in our resolve helped us to build trust in the leadership team throughout the entire organization and beyond. And then of course, you said yourself, you know, aggressive targets. And we've taken a very clear stand and I as the CEO have also done that and I think that's the way forward. tickets, visit: usf.to/adidas. Kasper Rorsted, who has been Adidas CEO since 2016, will step down sometime next year, and the search for his replacement has begun, the sports footwear and apparel brand said Monday. He uses two iPhones and one iPad Mini. Rorsted: Well Sara, I think that this is part of being a global CEO. team we really want to make sure that that problem is tackled to the utmost.. So how do you deal with that, which is even tougher in some ways? Rrsted also talked about the war in Ukraine. Now we are down to less than 400, and yes, theres still potential to focus further. But in fast-growing emerging markets, you cannot expect the same stable conditions that we are used to in mature marketsjust think of the political unrest in the Middle East, for example. The Danish businessman has been at the helm of the global sportswear giant since 2016. Of course, a Management Board member cant assume the role of the supervisor, but we do have to be a visible presence to our management talents and show that we value them. As an example, we aim to promote responsible use of our products. Members of the media can receive more information about CNBC and its programming on the NBCUniversal Media Village Web site at http://www.nbcumv.com/programming/cnbc. This was an intensive effort to ensure that each and every one of our people knows where the journey is taking us and what contribution they can make. During a Q&A session following his presentation, USF student-athletes asked Rrsted Adidas and CEO Kasper Rorsted are parting ways in an unexpected shakeup. But it was definitely the right thing to do; the changes will play a decisive role in the companys long-term direction and growth. And I think we've made a tremendous amount of progress. 3 talking about this. He is proud Adidas is a truly global and diverse multinational company and touted To date, we have trained more than 1,300 sustainability ambassadors, and more than 6,700 children in 23 countries have attended a sustainability session. You dont find this very often in the IT business, where I worked before joining Henkel. We are also stepping up our IT investments in order to standardize and accelerate our global processes. When I walked in, I saw a lot of opportunities here, he joked. Innovation is what our company is about. Egon Zehnder: In other words, its always a little higher, a little further. What was happening inside the company that made you realize you really had to do things differently? Our team is truly a global team. Kasper Rorsted: To succeed in the highly competitive consumer-goods environment, we need both a management team that reflects the diversity of markets in which we operate and the innovation capabilities to address a broad range of varying consumer needs. sustainable by 2025. its laser-sharp focus on expanding the brand across the globe while putting its customers a no-win proposition for everybody, he said. McKinsey: At the 2013 World Economic Forum, in Davos, you told reporters that the price for high growth is volatility. What are some of the steps Henkel has taken to manage volatility in emerging markets? In his youth he was a member of the Danish junior national handball team. McKinsey: As a non-German and the first Henkel CEO who did not grow up in the company, you represent a cultural change at Henkel. Before joining Adidas, Rrsted was the CEO at Henkel from 2008 to 2016. Furthermore, I am certain that if I were to tell our managers tomorrow that no changes would take place at Henkel for the next three years, no one would believe me. At USF, the athletics department is in the fourth year of an eight-year partnership As a family man who shares our values, he is also a very good fit on an interpersonal level, stresses Simone Bagel-Trah, who chairs the Shareholders Committee and the Supervisory Board and thus represents the Henkel family, which today still holds the majority of the voting shares. To succeed in an increasingly volatile market environment, we need simple structures and processes. embrace a culture of diversity. Maersk Executive Leadership Team Kasper Rrsted Member of the Board of Directors, the Nomination Committee, and the ESG Committee. If you look upon this, you know, hoodie I'm wearing today is made out of fully recycled material. Henkel has set ambitious sustainability goals, including what you call Factor 3a threefold increase in efficiency by 2030. In our consumer businesses, products that are less than three years old account for approximately 40 percent of sales. Can this ever truly be an environmentally friendly industry? Rorsted: I believe we have made a real breakthrough. What challenges are you looking forward to in the coming years? Henkel already had a strong value-based culture but up to that point it had been expressed in terms of ten values, the exact content of which was not well known to the majority of our employees around the world. Companies need to make a cultural shift to measuring performance based on employee output, not hours spent in the office. He holds a degree in international what they stand for. They are making sneakers from recycled materials, making products that are The turnover rate in China is around 25 percent. shoes. And I think in the world of political correctness, I think it is important that we have people that have different opinions for different reasons. On the other hand, I welcome the public debate it has finally brought some progress in this area. Last September the company organized its second global To be honest, at the beginning I underestimated the amount of work involved. So probably what we see right now, with all the volatility, is going to continue. Our company should reflect the markets in which we operate. I think it drives change, it drives responsibility. And that will be a challenge in itself. The company made Forbes 2022 list of Americas Best Large Employers and Fortunes What we do need, however, are structures that offer more flexibility to both our male and female employees, for example allowing them to work from home. Rorsted: I personally believe that you can only be successful in the long run if you keep asking yourself what can be done better and where potential is still hidden. annual report. Kasper Rrsted was 42 years old when he was fired from Hewlett-Packard in 2004. I noticed the company was vocal against stopping Asian hate when that was going on. Adidas is the largest sportwear manufacturer in Europe and is headquartered in Herzogenaurach, That taught me a lesson: if you just administrate, you sink; if you take an active role in shaping things, you have the best chance of survival. Rorsted: I think there are different challenges at different stages. our products, and if theyre not wearing them, were building our products wrong, You've been putting ocean plastics in your shoes since 2015, have a whole new set of ambitious announcements. Siemens AG, Germany (board member and member of the Innovation Committee), International Business Studies, Copenhagen Business College, Denmark, Executive Program, Harvard Business School, USA. At Henkel 30 percent of our managers are already women. The surprising break came in 2004, when HP CEO Carly Fiorina, herself under enormous pressure, fired him by telephone during a family vacation. It was definitely a thing and it was very public. from mycelium, the fast-growing fibrous root system of mushrooms that is grown in Everything here exudes tradition, dignity, and a spirit that seems to draw its strength from the stillness. Do consumers really want this? Kasper Rorsted: I was in no way aiming for a break with the culture of the company, but I did want to succeed in initiating a quick and thorough transformation. Tampa | St. Petersburg | Sarasota-Manatee. In that respect, too, we are leading the way among DAX-listed corporations: the share of women in management positions at Henkel is around 31 percent and has grown an average of one percentage point annually in recent years. Overall, more than 70 town-hall meetings have taken place around the world. Brown shoes have Other companies execute sustainability But the man who has been setting the course and dictating the tempo here for four years is made of different stuff. In 2021, the German company had $23.6 billion in sales worldwide. When I first joined the company, I was surprised how many colleagues had spent half of their lives at Henkel! I don't really think about the carbon footprint. It's obviously been popular for decades. deal with Adidas. Welcome to the official Facebook Page for Kasper Rrsted. Of course, very vocal on some of the racial issues around George Floyd. If the internal processes dont align, if we arent offering our young people the right development opportunities regardless of their gender, then a quota wont fix the problem. CNBC is the recognized world leader in business news, providing real-time financial market coverage, business content and general news consumed by more than 547 million people per month across all platforms. Kasper Rorsted has been a member of the adidas Executive Board and the company's CEO since 2016. Skip Over Breadcrumbs and Secondary Navigation, Kasper Rrsted, CEO of Adidas, is the Muma College of Business Thought Leader Series Copyright 2023,University of South Florida. For me, that is one that has such a devastating impact on the entire environment. Rorsted: I think it depends on which company you are. This is only the beginning, but the impact plastic has on our global environment As one example, our colleagues from Laundry & Home Care developed the idea of supporting employees to become sustainability ambassadors. These ambassadors go out and talk about sustainability to coworkers, suppliers, customers, and students. getting wrong and be fully committed to it, Rrsted said. The Muma College of Business Thought Leader Series began in 2018 to attract nationally And I think respecting those different opinions is very important that we don't have a uniform opinion right now. In his early career, Rorstedt worked with Oracle, Digital Equipment Corporation, and Compaq. This system works very wellaround 80 percent of managerial positions at Henkel are filled through internal promotions. So first, it was a costing issue, then you had a scaling issue around it, which you always do around your new products, if you take this or you take this which was made to be remade, where we completely recycle all the elements of a shoe and build a new shoe on it. During high school, Rrsted played handball for Denmark's national youth team. We have already accomplished a great deal, but we are aiming even higher. the issues as they are happening. Rorsted: There can be a number of reasons. Rrsted wore a grey hoodie, jeans, and the beta version of the companys 4D running the co-founder of Netflix, who spoke in 2019, and Steve Wozniak, the co-founder of Eisen: Sustainability has come to mean so much more than just the environmental impact and the responsibility there. Once they have been addressed, a quota becomes useless. Currently, e-commerce plays a minor role for us. Kasper Rorsted: I would like to share a piece of advice my father gave me many years ago. From zero to hero and back again it was all possible in the blink of an eye. The company has pledged to make nine out of every 10 products sustainable by 2025. Family for me is more important than the job, he We also increasingly recruit cross-border: at international recruitment fairs, we meet highly qualified candidates studying abroad and encourage them to work for Henkel in their home countries. Typical questions addressed in the workshops included Who exactly are my customers? and What can I personally do to make things better for them?. time, you know, but when we get something wrong, I think we need to recognize were Henkel managers from marketing or R&D regularly visit households. from the companys headquarters in Germany. Eisen: Are we going to pay more for it? make certain that you correct the mistakes, he said. As a leader, when you promise something, you have to stick to it. For a very long time, Stella McCartney said we're going to make a non-leather Stan Smith shoe. By the way, I do the same: whenever I travel, I visit stores and talk to consumers. Kasper Rorsted: Henkel has become much more global in the past few years. Egon Zehnder: And how can you be certain that you have made the right decisions? And when we looked upon Allbirds, you know, they've done been doing a great job on certain elements of innovation, we can bring the footwear expertise into it, which they probably had to a lesser extent. recognized speakers, innovators, idea generators, entrepreneurs, philanthropists, What did you mean by that? He is also a person who notices footwear. Because we live in a global world that is not consistently the same around the globe. When we set a margin target of 14 percent for 2012, that was not just a vague aspiration we mean to achieve it. I think this mindset is the key to success. One significant advantage we enjoy at Henkel is the first-rate, highly competent supervisory bodies which were involved in our decision-making from the beginning and fully supported the change process. That has not been the case. You need to make sure that you do and you can always look yourself in the mirror for what the company stands for. That belongs to what we need to do. Kanye West Gives Adidas CEO Kasper Rorsted The Pete Davidson Treatment By Also Declaring Him Dead On Instagram Armon SadlerContributing WriterInstagramTwitter September 1, 2022 Kanye Westhas. We point out, for example, that anyone can go to Harvard if they are a top achiever but first they have to reach that level. I do think that its important that the industry will and can do this, but somebodys We now employ about 47,000 people from more than 120 nations, working in more than 75 countries; over 80 percent of our employees work outside Germany. There are no human winners in this game. That said, at Henkel we are also affected by the effects of the recession in Europe, and I expect Europe will continue to face an extremely challenging period over the next few years. procurement, IT, and infrastructure services. How much progress have you made along this path? Rorsted: So going back, I think it should be what the company should be doing rather than I. I think if I were to pick one out it is really in plastic waste. Kasper Rorsted: Its certainly a challenge to find and keep good local employees, especially in emerging markets. Copyright 2023,University of South Florida. Before that, Rrsted spent more than a decade in leadership and management positions If you continue, you will be taken to the alternate language home page. On the Persil website, for instance, consumers can learn about reducing the water temperature in their washing machines and saving money at the same time, without compromising the superior performance of Persil. How would you characterize that change? Rrsted is the third guest of the series, following on the heels of Marc Randolph, Video from the interview will be available at cnbc.com/evolve. industrys first fully data-driven shoe that combines athlete data and 3D printing. We meet customer needs from one end of the supply chain to the other. We do that in part by investing in their development. Advisory Council, serves on the Nestl board alongside Rrsted and was instrumental Egon Zehnder: There is often a large distance to bridge between formulating a set of values and achieving a corporate culture which is an active expression of these values. When you think about ESG, where do you think it's going? As CEO, I believe that a primary task for me and the management board is to shape Henkels growth strategy and clearly communicate it to all employees. Aug 6, 2020 Germany. The company employs That would have diluted their effectiveness from the very start. accepting that award, having previously won in 2009 when he was head of consumer goods He eats cereal for dinner. To reserve He always wanted to be able to speak his mind freely and not be under obligation to adjust his thinking to those paying his salary. There were no rules. Member of the Board of Directors, the Nomination Committee, and the ESG Committee. Sara Eisen: Welcome, Kasper, it's so great to have you at our Evolve conference. Rrsted, 60, has been described as a highly successful and competent leader who is empathic, calm and a strategic thinker. Join Facebook to start connecting and con Henkel is active worldwide in three business sectors: Laundry & Home Care, Beauty & Personal Care, and Adhesive Technologies.
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