Doing the right thing key: chief exec

Former president of Adidas North America Zion Armstrong turned his life around after a few...
Former president of Adidas North America Zion Armstrong turned his life around after a few scrapes with the law in his teens and is now chief executive of children’s clothing company, Jamie Kay. PHOTO: TIM CRONSHAW
A Kiwi executive who went from being a troubled youth to president of Adidas North America is telling farmers to do the right thing, writes Tim Cronshaw.

At his peak Zion Armstrong did deals with sporting superstars and helped build multibillion-dollar profits.

But he resigned the next day when his young son called him a stranger, he told dairy farmers and rural professionals attending the South Island Dairy Event at Lincoln University.

The life of the chief executive of rising Kiwi baby and children’s clothing company, Jamie Kay, is much different from the high-paced and competitive sports shoe world, but several constants remain with him.

He credits a cop for turning his life around in his teens when he was caught pinching a motorbike and driving through the streets of West Auckland with no lights on.

When a police car came up behind him and faced with "fight, flight or freeze", he jumped a fence and scarpered.

He could outpace the boys in blue, but not the police dogs and has the scars to remind him of the error of punching one of them.

"It’s something I’m embarrassed that I did, but something that changed my life forever because a few weeks later at home where I lived in a caravan because I had six sisters and three brothers ... an undercover police car pulled in the driveway and [late Ross Dallow] hopped out and he was a man mountain."

None too pleased was his mother, but it appeared one of those chasing him was among the fastest men in the country.

A track and field coach, Mr Dallow drove him to the local athletics club and that was the start of a long friendship as he became a father figure and mentor.

Not his first brush with the law, this tough Westie 14-year-old all of a sudden had someone show him the right way.

"I’m sure you will have some of those kids on your farms at some stage so my message is, please, if they are a bit naughty, they could be an unpolished gem and given time, guidance and you being there, you can truly change lives."

After becoming the national high school hurdles record holder and going to the world junior championships, he competed in the 400 metre hurdles at the Kuala Lumpur Commonwealth Games in 1998.

His dream to be an Olympian after meeting the world standard with a 49.95 seconds run in Christchurch was stopped short when he missed being selected for Sydney.

A regret that stays with him is not running for Fiji as his father was born in the islands, but he hung up his spikes.

In the meantime, he had worked for Adidas as a 16-year-old school-leaver, unpacking container loads of shoes and working his way up to make the leadership team.

Thinking an email was a virus he ignored a message titled international opportunity until he got a call from the global head of business at the German headquarters to interview for a job.

He climbed through the company ranks working in Germany, Hong Kong, South Korea, and the United States before being named president for Adidas North America.

In Hong Kong his role was to look after the Asia Pacific markets in the sports division and signings included the Australian cricket team and legendary Indian batsman Sasha Tendulka.

After turning several top job offers down, he picked South Korea to become the brand director for Reebok — a shoe business Adidas had just bought.

India was the second largest market for Reebok and long-serving Adidas chief executive Herbert Hainer was fuming after €160 million ($NZ319.15m) of embezzlement was uncovered.

This coincided with Mr Armstrong finding legal, but undesirable business going on in South Korea after pouring over a balance sheet and the top boss due to arrive any day.

He was recommended to keep it quiet as it would not go well for him.

"Ross Dallow taught me lots of things, but one of the most important was integrity and the definition of integrity is doing the right thing consistently, no matter how hard it is."

Literally shaking in his seat, aged 34 and the first time facing the chief executive, he swallowed and delivered the bad news.

Mr Hainer punched the table and told him he had three months to fix it.

Former president of Adidas North America Zion Armstrong has turned his life around. PHOTO: KURT...
Former president of Adidas North America Zion Armstrong has turned his life around. PHOTO: KURT DAVISON
Six months later, he got a call from Germany to come to headquarters for an interview to be the South Korean president.

Rejecting the offer, he got another call to repeat he was not ready when he found Mr Hainer on the line, who told him to get on the plane.

"If I had not owned up and shown him what we found and fixed it there was no way I would have been given a chance. So when you find things wherever you are, own it, tell everyone and then get it sorted."

Told he would find the union his biggest challenge, he closed the distance between management and union leaders, knowing they had to listen to their workers, based on his experience on the factory floor.

The collective bargaining agreement went from the worst engagement of any country among the Adidas group and revenue of €250m to the highest engagement and €750m, surpassing Nike, because they had put their people first.

A catalyst for driving better results was turning around the unhealthy smoking and drinking culture by making 25% of everyone’s bonus health-related.

Another phone call resulted in him being given 24 hours to move to the US to become the brand director.

Given three years to turn the business around, Adidas in the first three months had slipped from first or second ranked to No 5.

Among principles drawn up were caring for their people and making the European brand authentic in US sport and culture.

A key step was signing a 10-year licensing deal with the NFL for more than $US50m ($NZ85.2m) to have the rights for players to wear Adidas cleats, including top quarterback Patrick Mahomes.

An eye-opener was seeing Texas college players in a 100,000 seat stadium with cheerleaders replaced by young farmers doing push-ups during the game.

Adidas signed Canadian ice hockey star PK Subban Signings as much for his values as his athletic prowess after he donated all of his $10m salary in his first year to a Montreal children’s hospital.

The imbalance between male and female contracts was evened out with the international brand targeting some of the top sportswomen.

Other making-a-difference ventures were developing a sports shoe for athletes with disabilities and another made from ocean plastic resulted in 21 million sales five years later.

Not every innovation was a winner with robotics in a speed factory in Georgia costing $20m as they could not be scaled beyond 500 pairs a week.

Rather than being looked on as a failure, trying "new things" was celebrated, leading to his 12,500 employees being unafraid to come to him with great ideas.

"Again, if you can listen to your people on the farm if they have got ideas and try to embrace them and not push them down. Obviously there are going to be failures and help them learn through it."

Adidas had gone from losing $US1.8b to become the fastest growing brand in the US, earning $US6b and share price rising, when Covid-19 arrived.

With the death toll rising in New York, he got the call from the board to continue trading.

Against standing orders, he closed retail stores that night and sending everyone home was warranted when the company got "crucified" by global media.

A couple of years later retail and distribution teams came back on day one of reopening because of the loyalty shown to them.

Covid-19 was not without a cost to him personally as his children were back in New Zealand and he went through isolation five times to see them.

"On the fourth trip travelling through the North Island my son was really quiet I asked him what was wrong ... and he said ‘You’re just a stranger’. Here I am with one of the most important and best business cards in the world in sporting goods and at that stage I had a 9-year-old boy who thought his Dad was a stranger."

Returning to Portland, he jumped on a plane to Germany and immediately resigned, aged 47.

"On a Zoom call to call him I said go grab your sister, I have something to tell you. Dad has just resigned and he goes ‘have you just re-signed again?’ I told him I’ve just quit and I will never forget his face just lit up. So don’t forget, yes, work is really important, but so are our family and loved ones."

After taking a year off he was approached by Jamie Kay founder, Jamie Fridd, to be its chief executive and he counts himself lucky to return home to help a Kiwi company go global.

Jamie Kay has opened in 13 markets the past few years, started a Christchurch store last year and has just relaunched sleepwear business Merino Kids.

 

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