Running with Reebok: back in 1991, Reebok's CEO laid out the four essentials of global leadership.

AuthorFireman, Paul
PositionFROM THE ARCHIVES

Ed. Note: One of the big M & A deals of the summer of 2005 was the $3.8 billion offer by Adidas to acquire Reebok International. Paul Fireman bought the U.S. distribution rights to this British brand of running shoe in 1979 for $65,000. (His ownership stake is now reported to be worth $800 million.) Clues to Reebok's strategy to make itself into this valuable a global brand were seeded in an article that Fireman authored 14 years ago for DIRECTORS & BOARDS, "Four Essentials of Leadership" (Fall 1991). It appeared in D & B's special 15th anniversary edition. An excerpt follows.

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 lifestyle 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 1987-1989 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...

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