RANCHO CUCAMONGA, Calif.–No matter the industry, every CEO has one specific task above all others, according to Mark King: Grow the business and stay relevant going forward. And to do that requires three things.
King, who is CEO of Taco Bell but who has led strong growth at two formerly stale brands, told CO-OP’s THINK20 Virtual Conference he has found those three strategies/thinking have been necessary to drive growth has been consistent in his career in the golf equipment business at TaylorMade, in the broader apparel business at Adidas, and now at Taco Bell.
According to Bell, those three things are growth mindset, big aspirations, and how a leader leads. Here’s a look at each:
Growth Mindset
In1999, Bell was VP-sales at TaylorMade Golf when it was acquired by Adidas and he was named CEO. Adidas Group’s chairman and CEO, Herbert Hainer, told Bell what he described as the “most powerful thing” he learned. Hainer told King he expected 10% topline growth and for the bottom line to grow faster than the topline. “If you can do that, you can keep your job,” King was told.
“It’s not if you grow, it’s how you grow,” said King. “You have to grow. From that day forward what hit me was we really don’t have a choice as CEOs if we want our brands to be relevant and to move forward. We don’t have to follow macro-trends, and most people will tell you that you do. That’s not true. You have the ability to control your own growth, and it starts with how you think. So, you have to have a growth mindset and you have to believe growth is possible regardless of the situation.”
Big Aspirations
When it comes to big aspirations, King said he is referring to financial aspirations.
“Yes, we all want to do good in the world,” he said. “But this is financial, something really big. It’s not a target or a timetable. It’s a North Star. And we look at this this way: Is this decision going to help me on the path to get to that aspiration? If we keep doing the same things we are doing, we are going to fall behind. COVID has accelerated so many things and put pressure on us. So we have to be thinking what are new creative ways to do our busines and take care of our customers.”
King said when he took over at TaylorMade in 2000 it launched a new product by doing everything according to the “industry book,” and believed it had “executed it beautifully.” But by the end of year, nothing had really changed.
“We really had to look at changing the model and the way we think about things,” he explained. “The biggest category is the driver—we had 10% market share and Calloway had 35%. We knew we had to reinvent the category. We went to the tech industry and looked at the pace and sequence of how often they launch products. In golf, it was every three to five years; we decided it be one year.”
The ‘Most Interesting Thing’
Within two years, said King, the company’s market share went to 20% and then to 35%, while Callaway shrunk to 15% in just three years.
“We had the bold courage to rewrite how we managed the marketplace and the consumer,” King said. “And the most interesting thing I found out is if we have a big aspiration but limited resources, there is this gap. We fill that in with new ideas and creativity. Companies stall when their aspirations and resources get equal to one another, because people aren’t developing new ideas.”
Leading the Organization
King said leadership is the most important of the three lessons he has learned.
“For centuries, all of us have used the command-and-control leadership model. It’s been around forever. There’s nothing wrong with it, but it’s really for a world that’s about control and predictability and incrementalism, and we live in disruption, speed and big changes,” said King.
In 2004, while at Taylor Made, King said he spoke with a consultant who told him after the company had doubled its business he was going to need to change the way he led to a distributed leadership model.
“That’s where the leader’s responsibility is to create an environment where every employee takes responsibility for leading the future,” said King.
King said “the most amazing experience” he has had in 20-plus years in leading a company came in 2014 when he joined TaylorMade’s parent, Adidas North America, where revenues had been flat for 20 years.
The spirit of the employees at the company was “broken,” he recalled. When he took over the business it had approximately $1.5 billion in revenue.
1,000 New Ideas
In response, King brought in consultant Gary Hamel who developed an eight module program to turn a business idea into a business plan. That was important, said King, because he met early with the company’s employees and told them the company’s new North Star would be to grow the business nearly five times to $5 billion in annual revenues.
“I said ‘I have no idea how we’re going to do that, and I’m going to ask you to help me do that’,” said King.
Employees were told they could go to the new module program online—and were given time to do it—where then could enter their idea and then work to turn that into a business plan. Three-thousand employees did so, 1,000 completed the program. Eight weeks later the company began narrowing down those 1,000 business plans with a big Shark Tank-like event in which it narrowed it down to 10 the number of ideas.
“It wasn’t so much the ideas, although many were brilliant,” said King. “But what happened that day or in that two-to-three-month period, was by setting a North Star and then asking people to join in with new creative solutions to drive business forward, we unleashed the collective thinking of 5,000 people,” King said. “Morale was sky high. The business started to grow immediately as we started to challenge things. People really got into owning the future of the business.”
The Box of Boring
King noted (at least in pre-COVID days) at most companies the same executives go to the same offsite every year and say, “Let’s think outside the box. But there’s no creative thinking for people who have exhausted their creative thinking, and you have same stale ideas. Leaders don’t have to have the ideas; they have to ask for the ideas. For me personally it’s the single biggest influence on my career.”
Noting the marketplace will only reward those companies and credit unions that continue to grow, King told credit union leaders the biggest challenge today isn’t “that leaders don’t understand that; they have to have the courage to leave behind the way they used to do things.”