Adidas, Volkswagen, Fresenius – the invented Dax twilight

When two of the same things happen, there is a half-joking journalism saying: find a third event and we have a trend. The opening credits for such stories then begin like this: “More and more…”. In this respect, one could say: More and more Dax bosses are abruptly thrown out. Herbert Diess at VW, Stephan Sturm at Fresenius – and most recently Kasper Rorsted at Adidas. If you don’t deliver, you have to go. Supervisory board members don’t look on for too long, as they are often accused of, they don’t hesitate much longer. And are we perhaps experiencing a foreshadowing of the great crisis that will come in winter? The Dax twilight. The CEO trip to Jerusalem?

One can find good arguments for such patterns at first glance, but many are also constructed. On closer inspection, the cases at Volkswagen, Adidas and Fresenius are actually quite different. It starts with the latter group, where most people would probably have to google what Fresenius actually does. And how the Hessian healthcare company is related to the dialysis specialist Fresenius Medical Care – in which the company holds around a third.

The crisis at Fresenius has been brewing for some time. Like many others, the group is struggling with problems in the supply chains, higher costs and staff shortages. Fresenius is growing, but the profit isn’t really making any headway, the debts are sporty – and the vision has been missing for a few years (you can hear an analysis of this in episode 12 of the podcast “Aktien fürs Leben”.) The change is logical, it was in the air.

The resignation of Herbert Diess, on the other hand, had something so special about Wolfsburg, because you have to go back a few years to find a regular and proper change of boss at Volkswagen. For years, the car company has been cultivating exits rather than transitions, which is due to the power structure in and around Wolfsburg: a works council that is too powerful, a state that is overwhelmed as a major shareholder and an industrial clan that also produces intrigues in series. Nowhere are co-determination and dictatorship closer together, they even fight and join together in a meeting room. Sometimes it seems easier to design the transformation of Mordor into Middle-earth. Volkswagen’s compliance complexity alone could fill a small library. But this had been counted for months.

Should you congratulate Oliver Blume?

It’s always a hurry, Diess, yes, he started out as a visionary, but he had an implementation problem. Which, as always, isn’t entirely wrong, but is roughly analyzed – one could also say that Diess was simply unreasonable in terms of its pace and change style and was a bit chased from the court. In this respect, one does not know whether to congratulate or condole Oliver Blume. He has something surprisingly unwolfsburg-like about him, comes from the system (his career ran through Seat, Audi and Porsche), but doesn’t look like he comes from the system. However, his dual function – he will remain head of Porsche for the time being – raises questions.

You should remember the labels that are now attached to him (team player) if he doesn’t succeed. You should also not think that there is someone who is softer. Another quality seems crucial to me: I was able to see him at a few appointments and interviews, and it struck me with what consistency he implemented the e-strategy at Porsche. There was a lot at stake at Porsche: a 911 with a battery? Unthinkable. Porsche has found an answer, not only in the Taycan or the Macan, even the 911 is to have an electric version. Four out of five cars should be electric by 2030, and the company should be climate-neutral. At the same time, Blume was able to commit his troops to the project, to take them with them, not to alienate them, but then to deliver.

The source of the unrest at Volkswagen is not the cabal, but the force of the transformation that has gripped the auto industry for years. The megatrends – e-mobility, networking, autonomous driving – have been combining and overlapping with crises since 2020 to form a perfect storm. Pioneers in China suddenly become prisoners of their strategy, and the largest market poses the greatest risk. When it comes to supply chains, one wonders when the word will be written without the addition -problems for the first time.

That leaves Kasper Rorsted. I have to start by saying that I’m a bit biased, because in 2013 he was the first Dax boss I met when I was still at Henkel as a new and young editor-in-chief. He impressed me. You didn’t go through an antechamber, he met you in the corridor and made an espresso himself. We talked about a somewhat abstract topic: cultural change. How to turn a decent company into a very good one.

Henkel was always a bit what used to be “oral between 2- and 3+” at school. I met Rorsted a few times at the World Economic Forum in Davos, he was one of those people who recognizes you (or at least pretends to and then uploads the facial data set in a matter of seconds). The most important piece of advice he received in life, he once said, was: “If you’re doing something and it’s important to you, then do it right. That’s the only way you’ll be successful.” In retrospect, it is said that although he made Henkel pretty and optimized it, it was not successful in the long term.

A few years later he joined the editorial team at Capital. I will never forget how during the conversation he suddenly put his foot on the table and talked about new lines, sneaker trends, editions and sustainability using his shoe, an Adidas Ultraboost Ocean Plastic. Despite the Reebok block on the leg, Adidas had previously been successful, and 2016 was a record year. At that time, the sports companies delved deeper and deeper into the archives, “discovered” one retro model after the other and knocked them out in unison: Stan Smith, Gazelle, Superstar. That’s why I was interested in another question: How do you stay successful? Rorsted is someone who likes to get involved with such meta-questions, and not just reels off We-must-continue-growing in XY speech bubble. He is binding and unapproachable at the same time.

I picked out the interview again because it’s a lesson, regardless of his ejection and the quick record of where Adidas is now.

Every company can be improved, even very successful ones,” said Rorsted. “Of course it’s easier to turn a company that is in trouble than to keep a successful one successful.” But Adidas also had construction sites. Growth in the USA – was good, but the market share was too small The margin – only half as large as that of Nike!

‘Identify the gap and close the gap’

The greatest threat to successful businesses, Rorsted said, is becoming complacent. “They then think that they are better than everyone else, and that is often the beginning of decline. As a CEO, you have to find the balance: give enough praise – but also criticize. Be happy about the success, but not from the euphoria get carried away and stay humble. And you have to insist that you want to change something. Because if you only talk about success, you also sugarcoat things that aren’t going well. Only the differentiation of success brings success in the long term.”

But how does that work, I wanted to know. By facts, Rorsted said. He crushed success mercilessly. “If you just say in general, ‘We need to get better,’ nothing happens. You have to be specific. For example: Our market share in the US is too low – so what can we do? There’s a good saying in English: ‘Identify the gap and close the gap’.”

We did a little role play, played an Adidas manager who says to Rorsted: We are in a market that has just grown by ten percent. Mr Rorsted, I don’t know what else to do. Ten percent plus, that’s enough. Rorsted replied:

“I would ask: In which channels did you grow? In wholesale, in specialist shops or online? Have we gained market share in football, tennis or training? Have you only grown or also become more profitable? Who is your successor? Do you have a successor? You see, even with ten percent growth, you can still ask a lot of questions and keep digging. And that’s what I’m doing.”

I found it interesting then, and I still find it today. But in hindsight, precisely this principle of success, that one drives success and growth into ever harder, granular questions and tasks through an organization, could also be the seed of failure: that one loses the vision out of sheer optimization, drives out creativity and all that, what sounds too esoteric for such types of managers: the spirit of a company (they would accept the term “spirit” but understand it differently).

Rorsted’s aura was lost when Adidas was at the forefront of Corona state aid, didn’t want to pay rent, but got a state loan. But his example alone, his way of thinking, which could certainly find its place in a case study, shows how rough the narratives are after departures and how many shades of gray there are between black and white, between success and failure.

And it also shows that three events do not necessarily constitute a trend.