4 Things Kevin Plank Is Doing Right
What Management Steps Should A CEO Take To Successfully Pull Off A Major Change?
Under Armour’s CEO Kevin Planck is insightful in gearing up for the coming data-driven world. His plan is simple: become a market leader in personalized data collection and acquire the loyalty of the fitness and athletic community. He set his plan into motion 2 years ago starting with the acquisition of MyFitnessPal, Endomondo, and MapMyFitness, each holding a large community dedicated to one of the four pillars of health: sleep, fitness, activity, and nutrition. The company has been doing well the last 23 consecutive quarters, with its stock rising more than 50% since April 2015. Its new launch of connected-fitness holds the most traction, which has been tripling in quarterly sales year after year. Connected Fitness is still a tiny segment, but it is projected to have an enormous impact on Under Armour’s growth moving forward, and it will be the key to accelerate the company’s plans to double the revenue by year 2018.
What is Kevin Plank Doing Right?
For a company that produces 4 billion dollars in annual revenue, a 710 million-dollar investment was a large gamble. But the outlook for this new venture seems promising. The auspiciousness comes from the 4 ways Kevin Plank runs his company.
Phase 1: Change Through Persuasion
Kevin Plank did a great job convincing the employees that radical change is imperative.
When Plank made the decision to pay 710 million dollars for the acquisitions, some of the long-time employees questioned whether Under Armor would be able to produce an ROI quickly. It was concerning because two of the three acquired companies were unprofitable and very remotely connected to a space that makes shirts and shoes. Not only that, long-time employees were worried that these decisions would stunt the company’s performance as well as divert focus from the core business.
Plank spent more hours than he cares to count, including a large chunk of his winter vacation last year, in one-on-one conversations to persuade them otherwise . He made sure that all employees were on board and that they felt as if this change of direction was a collective effort.
In addition to implementing open communications with his employees, Plank also reported the doubling of Under Armor’s net revenue projections to 7.5 billion dollars to the world. This optimism and attentiveness to individual’s employees’ enthusiasm for the direction immediately reset employee expectations while dramatically increasing staff cooperation and willingness to accept whatever new initiatives might prove necessary for this new venture.
Phase 2: Setting the Stage
Once the employees were on board, Plank worked to have his company comprehend what is necessary for this change, a top priority execution to merge performance products with performance data and interactive technology.
Plank worked to win the hearts of the head of his company’s departments. For example, when Plank acquired MapMyFitness, he hired its CEO as Under Armour’s chief digital officer. In a private conference in New York, Plank showed Thurston a video of “Future Girl” which showed a young woman starting a morning workout in clothes that were touch-sensitive and could call up data displays and change color with a tap of a finger. He hoped to show Thurston the exciting opportunity that lay in Under Armour’s future.
Phase 3: Managing the Employee Mood Through Communication
Plank worked to keep his company’s spirits motivated and productive.
Under Armour’s first “electric” product, the E39 Compression shirt which had sensors embedded in the fabric to track an athlete’s heart rate was launched with much fanfare in the 2011 NFL training combine. But the simplified version only had a niche appeal and failed to gain a large market share.
Plank did not let this failure affect his employees. Plank immediately bounced back, took this as a learning experience and reared Under Armour’s focus to the fitness community rather than fitness hardware. Plank worked with Thurston to create a collaborated strategy for Under Armour’s digital transformation so that his employees would be focused and well-involved with the steps to take ahead.
Lastly, Plank uses his affect and intensity analogous to a head coach to instill a sense of combativeness to his employees. “Winning is a part of our culture — it is who we are”, he said. With his words and demeanor, he instills a sense of newfound motivation even in the midst of a setback.
Phase 4: Reinforcing Good Habits and Mindset
Plank provides an environment to reinforce a positive mindset.
The toughest challenge faced by CEO’s during a large transformation is avoiding backsliding into familiar routines and convincing all the employees to the right mindset. Plank reinforces the core thinking and behaviors necessary for the company’s current movements using the office space and its prolific number of whiteboards. It is to the point that the question “Have you seen Kevin’s whiteboards?” is one of the most familiar questions in the Under Armour HQ. Kevin Plank writes leadership maxims for his team inside and outside his office. The Plank principles “Think like an entrepreneur. Create like an innovator. Perform like a Teammate” are strewn all over the hallways and the walls. These “guardrails” are there to allow all employees to operate as entrepreneurs and channel his way of thinking.