Undoing The System: How Adidas Became a Shoe Industry Case Study
Image: @thesamlao
What drives change?
While complacency can often run rampant without much change for years, all it takes is one spark, one embarrassing situation for an example to be made and for the light of change to work it’s way into the darkest of rooms.
That is what is happening all across the globe and that is what happened with Adidas.
Over the past month, as protests were raging on social media and in the streets and as the coronavirus pandemic continued to sweep across the United States, another storm took shape and made landfall. With demands for justice and calls for atonement across the country, an awakening descended on us all and found us calling into question everything from government systems and elected officials to our own buying behavior and the brands who have been beneficiaries of our culture. Ultimately, the sentiment for Black people and our allies has been resounding: enough is enough.
Swiftly, scores of footwear brands (and others to be sure but, for the purpose of this conversation we’ll just stick with sneaker brands) followed the consumer in choruses against injustice with carefully crafted internal letters, video messages, retweets, and social posts that came with financial donations and blacked out squares.
Adidas was no different with a social declaration on May 30th and a historic retweet of longtime bitter rival Nike’s video calling for an end to racial injustice. For those of us in the community, this was a huge deal. But, for Black employees at Adidas - specifically at the North American headquarters in Portland - this response from the sneaker industry’s second-largest brand was performative and the last in a long line of straws. Adidas employees organized and got vocal. They were candid with members of the media about their experiences at three stripes and their demands for change. They didn’t keep it internal.
If you haven’t worked in the sneaker space, you may not understand how big of deal that is. As media, we’re often presented with employees who champion the brands they work for almost religiously. Even for those of us that have personal relationships with some of our connections in these spaces, going public with the brand’s faults isn’t a regular occurrence nor is it something we’re used to especially not at this scale.
To be clear, Adidas is far from the only offender in our space. The athletics industry has faced allegations and complaints about diversity and inclusion before. Nike was the defendant in a class-action lawsuit filed in August 2018, which alleged a toxic work culture for women, and was hit with a racial discrimination lawsuit by a former employee in 2019 just six months after the debut of its Colin Kaepernick ad.
Under Armour, too, faced a racial discrimination suit in July 2019, and in December the year prior faced criticism for its corporate culture.
So, how did Adidas effectively become the shoe industry case study for racism and toxic systems of corporate bias? Here’s a breakdown of what led up to this industry giant’s $120M mea culpa and the resignation of their HR Chief.
Pre-2020: The Rumblings
In November of 2018, a letter addressed to then-newly appointed Adidas North America president Zion Armstrong, found an already organized group at Adidas eager to speak on behalf of minorities at the company. The letter was essentially a cry from employees to upper management calling their attention to the need for “diversify representation” in the firm’s upper ranks and alleging racial and ethnic disparities within their own divisions.
Around the same time, multiple sources reached out to media leveraging stories of white leaders failing to promote and treat people of color fairly.
“North America senior leaders foster, encourage and reward an exclusive all-white environment made up of the same individuals that are consistently promoted and spotlighted. They ostracize people of color and cultivate a high school ‘clique’ environment,” said one employee at the time, who accused the brand’s leaders of promoting their white counterparts while withholding opportunities from African-Americans, Asians, Hispanics and other minorities.
One would think negative stories emerging would give a brand pause for concern and action but, it seems in 2018 Adidas didn’t quite grasp the importance of an employee cosign.
"Your largest advocates are your employees, and potentially your largest detractors could be your employees as well," says Ari Lightman, a professor of digital media and marketing at the Heinz College at Carnegie Mellon, noting companies need to pay attention to when employees call out practices that go against the corporate mission.
The influx of negative stories from minority staffers came as Adidas was also enjoying double-digit growth in the North American market and a heavy reliance on cultural juggernauts like Kanye West, Pharrell Williams, and then, Beyoncé in 2019.
But, even with media glare and open letters, not much was changing internally at NA HQ. This time last year, in July of 2019, a new group of Adidas employees (specifically Asian and LGBTQ staff) issued claims against the brand.
June 2020: The Reckoning
In early June, after Adidas made it’s initial show of “action” in condemning racism, 13 Black employees at Adidas formed a coalition with the express goal of exposing hypocrisy and calling for immediate and lasting change to the way the company treats it’s Black employees and, by default, Black consumers at-large. With an added emphasis on ensuring that Adidas big bosses in Germany made changes to the culture from the the top down.
On June 2, the group of 13 (which represented then about 100 employees) delivered to Adidas North America management, including president Zion Armstrong, a 32-page deck, entitled “Our State of Emergency.”
The document itself listed four major “asks” of the brand in the form of the following:
investments in its Black and brown employees, specifically that Adidas have 31% representation of Black and Latinx employees at every level of the organization by Dec. 31, 2021.
substantial investments in recruitment with a new hiring policy requiring that Black and Latinx individuals are interviewed for every new and open position.
investments in the fight for racial justice and change for Black people and;
demonstrate accountability, namely in the form of a direct apology to Black employees.
As top execs (including those at Global HQ in Germany) reviewed the demands, hundreds of employees planned to effectively protest by turning on “out-of-office” email messages and stopping work until they received a proportionate response.
“Unless you are actively working and instilling practices against it, you uphold the very thing you claim to admonish.”
- excerpt from Letter to Adidas management from employee coalition, June 2020
Image: FootwearNews
Meanwhile, other employees, organized by Julia Bond, an assistant designer for Adidas Originals apparel, gathered at the company’s HQ for daily protests to combat the brand’s public messaging vs. their own experiences as minority employees.
June 2020: The Response + Resignation
On June 9, Adidas issued an initial statement which invested $20 million in programs that support Black communities; investments in university scholarships for black employees by financing 50 scholarships each year during the next five years; and an increase its number of black employees by committing to filling 30% of all new positions in the U.S. at Adidas and subsidiary Reebok with Black and Latinx hires.
The 13-member coalition, which swelled to more than 200 Adidas employees, called the response “laughable” and said the hundreds of employees who have been participating in a sit-out since would continue to do so.
On June 10, Adidas issued an official statement of response to employees and the public. This time, with accountable language and an increase in funds from $20M to $120M, the brand issued a statement and outlined specific goals including:
a plan to increase to $120 million its investment in programs that support black communities over the next four years and;
a promise that 30% of all open internal and external positions will be filled with Black and Latinx talent while 50% of all open positions will be filled with diverse talent.
“First, we need to give credit where it’s long overdue: The success of adidas would be nothing without Black athletes, Black artists, Black employees, and Black consumers. Period,” the brand wrote in a crafted social swipe.
“It’s time to own up to our silence: Black Lives Matter. Here is how we are committing to change across People, Communities, and Accountability.”
Adidas further committed to enforce a “zero tolerance” policy on racial discrimination, noting, “If there is evidence of retaliation, offenders will be terminated. To ensure fairness and safety, we are putting in place a third-party investigator to govern our policy and keep us accountable.”
In case you thought it got better, it didn’t.
On June 12, some members of the coalition and the 200-plus employees it represents began calling for the resignation of Karen Parkin, the brand’s chief human resources officer and member of its executive board. The request was a direct result of statements Parkin made last year at a company meeting in response to a question regarding reports that Adidas was facing significant challenges in how it treated minority employees.
Parkin, according to sources, described racial concerns as “noise” and suggested the company did not need to take action. In an internal memo sent to Adidas staffers on June 12, Parkin, expressed regret for her commentary — adding that she should have chosen a “better word” in describing how the company “viewed issues of race.”
Today, June 30, she resigned.
Is this time different?
Retail as a whole has seen glimmers of these moments before. Inequalities have surfaced in a variety of ways and in a multitude of industries, but, as the protests revealed, there are still problems brands need to solve. While in the past, news of a lawsuit or other brand crisis caused minor inconveniences and PR clean ups for companies, this time employees and consumers are demanding more from brands and these brands must respond with change at all organizational levels.
For us in the sneaker space, Adidas has become an indicator of sorts and an example of how much we must constantly check the power structures we buy into and pay attention to the employees who can give us insights that we don’t see.