16 Mar 2010
When Herbert Hainer presented the official match ball for the FIFA World Cup in Cape Town, to South Africa on December 4, 2009, few realised its significance to the Adidas CEO. There he stood, alongside David Beckham, FIFA President Sepp Blatter, CEO of South Africa 2010, Danny Jordaan and Franz Beckenbauer, his peers in terms of their status on the international stage – but his heroes in footballing terms.
This is the story of a man who when he didn’t get his own way, rather than asking for his ball back, offered up one of his own – with a little help from history.
Herbert Hainer, CEO and Chairman of the Executive Board, was born in 1954, in Dingolfing (Bavaria), Germany. Despite his international status, Hainer remains a German national. He is married, with a daughter. Like all good German students, he progressed well at school, in Lower Bavaria, where his favourite and best subject was sport. He played in the country’s top amateur league, and pursued his dream of becoming a professional even while taking a business studies degree at the University of Landshut.
His team won the 1976 Lower Bavarian championship – but eventually realised he was not good enough to win a professional career. Home life though had taught him something about the business world. His parents ran a butcher’s. He and his brothers would help in shop. Business experience came in useful during his last year at university. He had noticed English style pubs were becoming popular in Munich and borrowed from his parents to open one with a friend in Lower Bavaria. It was here that he met his wife, Angelica. In less than a year he had sold the pub for a profit.
At age of 25 he had gained a position in the sales department of one of the largest retail producers in the world, Proctor & Gamble, in Frankfurt, selling shampoo, nappies and soap. The post he held was Division Manager in Sales and Marketing Germany. His involvement with Adidas began as a German Sales Director in Hardware (Bags, Rackets, Balls) in 1987. He rose to become National Sales Director in 1991, but these were difficult times for the company. By the end of 1992 it was close to bankruptcy. A Frenchman, Robert Louis-Dreyfus, took over as CEO and introduced a new business model in 1993.
Louis-Dreyfus had run the advertising agency Saatchi & Saatchi and he understood the power of branding. Under Hainer’s watchful eye, he re-defined the Adidas brand and moved production from Germany to China. Hainer embraced change and continued to climb within the company, becoming Managing Director (Sales and Logistics) in 1993 and then a member of the Executive Board in March 1997. He was made CEO and Deputy Chairman of the Executive Board in March 2001 – two years after Louis-Dreyfus left.
He adopted his predecessor’s model, but made it more efficient – improving supply chains and delivery times. His stated goal is to take Adidas from number two sports wear provider in the world, to number one ahead of Nike. Adidas’s purchase of the US Reebok group in 2005 for $3.8bn was designed to help make that happen. The downturn has seen sales fall – but not as much as expected.
Hainer hopes his company’s sponsorship of the 2010 World Cup and 2012 Olympics will provide another opportunity to catch Nike. He will supply sports merchandise to all London 2012 venues and also help Britain secure medals by providing its athletes with the most technologically advanced sporting gear available. Adidas is the only brand that designs and develops sportswear for 25 out of 26 (London) Olympic sports.
“Our deep involvement in the Games will help us to become the leading sports brand in the UK, the largest sportswear market in Europe,” he says. He dislikes mixing politics and sport, although ever since Adidas founder Adi Dassler provided the equipment for the black sprinter Jesse Owens in 1936, the company has refused to bow to pressure from anyone. That tradition remains alive and well.
Adidas was the main supplier to the 2008 Olympic Games. Hainer’s involvement was marked by total sales in China of around $6bn in 2007, but with some criticism from human rights campaigners. He told one journalist: “I don’t deal with political structures, just with consumers. And they react differently, depending on the kinds of social and political conditions in which they were brought up. With some consumers, it just happens to take a little longer for us to help them realise how happy our products can make them.”
Hainer’s ability to meet consumer demand by constantly moving the business forward has resulted in sales doubling since 2000 to almost €11bn, more than tripling net earnings to €642m. He told shareholders at the AGM on May 7, 2009, the company had broken records by achieving double-digit earnings growth in 2008 – the eighth year in a row.
“We ran faster and jumped higher,” he said, before moving on to explain how he intended to tackle the financial downturn: “Quite frankly, we are feeling the effects of the crisis. In Chinese, the word crisis has two meanings: opportunity and risk. The Adidas brand is our pride and joy. Never in its 60-year history was it as strong as in 2008.”
The fighting talk has continued on into 2009. Although the second quarter results in 2009 were down, they fell less than expected. He vowed in January 2010 to continue to ‘cut out the dead wood’, while working on innovation. What do you expect from a man who is thought to have made €2,930,000 in 2008. He is Deputy Chairman of the Supervisory Board of FC Bayern München AG, Munich, Germany.
Interests include reading German crime novels and listening to Joe Cocker. Among his few vices is ‘fine wine’. He keeps lean by running in woods close to his home and skiing. A fanatical fan of all sport, he says what he likes most about his job is that he gets to go to the greatest sporting events around the world. At the 2010 FIFA Wold Cup keep your eye on the ball. As well as the man with a dream who handed it over.