With the recent launch of the Birkenstock collaboration with Rick Owens, we sat down with the CEO of Birkenstock Americas to talk about the rise of Sneaker Culture, authentically growing your brand, the future of retail, and his principles for leadership.

How do you keep the Birkenstock brand feeling true to your roots whilst still being relevant in a world where things change so quickly?

Number one is never ever, ever deviate from your DNA. You can go left and you can go right, but never compromise your core. 

Number two is you have to continue to innovate, because if you do the same thing over and over, people get tired. So you stay in your wheelhouse, but you innovate. That's key.

Number three is you have to always manage what I call relative market scarcity. It's economics 101. Never have more supply than the demand. 

And I think number four is never forget we're not in the footwear business, we're in the entertainment business. We're not in the shoe business, we're in show business. The stars of the shows just happen to be the shoes. 

We tell our partners "You better start to view what you do as being in the entertainment business or we're going to play in another sandbox, because if you're boring the customers, they're not gonna shop there anymore."

People aren't shopping because they're not entertained by what they're seeing today. Malls have bored them and the stores have bored them. 

At some point there's gonna have to more content behind it, and that's probably the next big iteration for brands. Wrapping the commerce in the content. You're gonna have to create content that your brand lives in, sort of like Amazon is doing right now. 

They're not creating Amazon movie studios because they want to make money in the movie business. They want you to be on Amazon, and that's where your movies are gonna be and where you're going to shop. They want your whole life to be integrated there, so they're gonna create so much content that you can't get away from it. 

It's the old Disney model. Disney didn't make a fortune on people sitting in the movie. They made a fortune on everybody experiencing the brand and buying all the products. Until they commoditized princess movies, princess movies made no money. They they realized, "Oh my God, we got a mermaid. We can sell that."

And I think Amazon is smart enough to bide their time and wait until the next generation are fully indoctrinated. You’ll have all kinds of boxes coming to your front door! You're not going to know what's hit you.

How do you think brands continue to maintain their relevance as this “brandless world” starts to play out?

I think that's what keeps us up all night right now! Realizing these forces around us which are “anti-brand”.  

The truth is this. I'm Timberland and I sell a million pairs of Timberland boots on Amazon a year. Well Amazon is now my data aggregator. Amazon now has the data on a million people that have bought Timberland boots. So what's to stop them from making their own six-inch wheat colored boot that’s sitting in your inbox the next day? Or what's to stop them from setting it up so any time you go on and search "work boots," "outdoor boots," "Timberland," the first thing that shows up is their own Amazon boot.

That's where the future is going, and that's why as a brand owner you have to manage your brand and your customer connections so that the consumer doesn't seek the lowest common denominator. And lowest common denominator is buyer beware, because you as the customer don't know what you're getting. That starts to become the wild west. 

Going back to my point earlier about Like v’s Love, it's easy to switch from a like, however it's not easy to switch from a love. The only reason you switch from a “love’ is if the brand you love does something that you don't agree with, or something that’s unlike their brand. You just lose that emotionally connection. 

And as long as brands keep entertaining and creating new experiences they’ll be OK.  I’m opening a store in Soho in New York this year, and the biggest thing we're playing around with is how do we make it a place of entertainment. We still have to do business. It's got to be commercial, but most importantly we need to create a brand experience. It has to connect. And every brand has to unlock what that looks like for them, because the world doesn't need yet another shoe store, it really doesn't!

What do you think makes a great business leader?

I think you have to inspire people, and you have to know when to get out of the way. You have to inspire people to do more than they thought they were capable of doing. I think that's very important. I'm not a micromanager, I just believe in building great teams. It sounds like a cliche, but get the best people in the room and get out of the way. Sometimes people will come to me and say they want to run something by me just to get my buy in, and there are a lot of times I'll say “honestly, you're a better judge of this so don't waste your time”. Let me know about it, but I don't need to look at it in detail as you probably know the right answer.

I think the more you do that, the better you become as a general manager. That's why you become a general manager, because eventually you don't want to be the one designing the product. But it's hard if your nature is to want to know everything.

Who are your personal cultural icons and influences, and how do you think they have affected your professional life?

I'd say for me it's brands that stand for something bigger and more life changing than just producing their product. 

As for cultural life, there are musicians playing right now that don’t exist in 20 years. But Bob Dylan wrote “The Times They Are A-Changin” 20 years ago, and If you read those lyrics right now they are more relevant today they were in 1967. It's guys like that who inspire me more than anything. People that do things from a lasting stand point and stay true to themselves. And I think that's what brought me to this company.

This brand has been around for 240 years, and this goes back to a cobbler in a small village in Germany whose last name just happened to be Birkenstock and who had the idea of making comfortable shoes for people. That's something very real. So to me, it's people that are very real and stay true to who they are, whether it's the arts, or whether it's music. And I think it’s getting few and far between when it comes to business right now.

What's your favorite album and why?

It’s Darkness On The Edge of Town by Bruce Springsteen 

I love it. Love it. To me that album is like life. You can even forget the music and just read those lyrics. It’s just as real as it gets. That was the first album I got where everything from the album cover to the music just freakin hit me. I could listen to that right now and still feel like I'm hearing it for the first time. That album means everything to me. Everything.

You remember where you were when you heard something for the first time, and how you felt. That's the beauty of it. That's why I think everything we do from a brand standpoint, we try to hold to that lens of emotional connection. Do you just like it, or do you love it? Are you really totally connected to it?

That's what a great musician does. A great musicians doesn't just get up and make music. They get you right here. And that's what great brand marketers do. They don't just “hook you up” with something. They genuinely have something that they believe you need in your life for a very real reason. 

It's like an artist creates something because they have a need to share that with the world. I think it doesn't get any bigger than that, and I don't want to overly romanticize making shoes, but the truth is that's what we think about every day.

Those connections you just described, are they things that need to be grounded in the brands values and day to day culture? 

Every single person in my company, if you stop them on the street and ask what's the mission statement, they'll tell you “we sell footwear that brings people happiness and satisfaction”. It's that simple. We sell footwear that brings people happiness and satisfaction. If your personal mission statement has nothing to do with bringing people happiness and satisfaction, then you're inconsistent with the mission statement of the company. 

We sell products that bring people happiness and satisfaction, so it's not about “it's Friday. Hurry up and call the warehouse and get this shipped because we need to make a number this month”.  That’s important, but not as important as people feeling “oh my God I have to ship this because there are people that want the happiness and satisfaction by this product is going to deliver”. And I think there's a difference between the two.

It also expands the timeframe and stops you practicing short term I'm thinking, which in turn enables you to ride the day to day ups and downs. The failures are small because there's always something bigger to iron those things out. It gives everyone a movement and motion to move past bad news and keep focused on where we are going.

And people need a good environment. Birkenstock is probably 90% women, and that's been a change from me coming from the sports end of the business. It was a guy business, and I did not work with a lot of women through the years. But we're 90% women, and it's an incredibly flexible environment.

When I first got there one employee would ask me "Is it all right if I leave today at four o'clock as I'm going to hit traffic and my kid has a soccer game?" And after a while I was like, "Listen, you do whatever you want. Come and go as you want. You want to see your kid play soccer, go play soccer. But if it's Sunday night at ten o'clock and I text you, trust me it's really, really important because I wouldn't waste your time. You need to respond to me." 

So they know that they have that kind of flexibility, and you get so much more from people. And it’s cool because it ties to the brand, and that's what brought me to this thing. 

And I feel it’s incredibly important for people to offer and take ownership of their ideas, and to be open and honest with their thoughts and feedback. I'm a few steps removed from whoever is doing cool things, so I may not know about them. And like everyone I have bad ideas, so it’s important to have honest feedback and get checked by your team. 

People can be afraid to offer feedback, but that’s the last thing I want.

What are some of the most important lessons you’ve learnt over the years? 

This is kind of a weird one for me, because I have a lot of people in my life that I've brought with me here to Birkenstock, so i’ve had the opportunity to almost create in my own image what I wanted a company to be like. But the experience I had a few years ago was getting fired from a company. And that was probably the best thing that ever happened to me I'm proud to say.

I did this CEO panel in New York a while ago, and they had a bunch of younger people in their 20s, and they had four or five CEOs of companies, and the opening question was, "Can you talk about who was your greatest mentor,". And the first guy goes "I worked for this person and he taught me X," and the next person was, "I worked for this person who taught me Y”, and they get to me and I'm thinking, "Oh my god, I’ve worked for some of the meanest assholes to ever walk the face of the earth." So I said it. I said honestly, the best experience of my life was I worked for somebody who was a horrible human being who ended up firing me. That was best thing that ever happened to me, because I said I would never in a million years want my kids to grow up and be in an environment with somebody treating them that way. I'm proud to say I got fired!

I've had the unique opportunity to meet a lot of CEOs and Presidents of companies, and you've read about them in Fortune magazine, and then you meet some of them and you call home afterwards and you go “oh my God, this guy's the biggest idiot I've ever met. This guy's a moron!

If you could have done anything else with your life, what would you have done?

I think I'm one of the people who's probably doing what every indicator possibly would have led anyone to think I should be doing. I mean I'd love to be standing in front of 80,000 people in a stadium and playing the guitar, that'd be cool. Sometimes I think I'd like to be a talk show host. I've pitched this idea a few times, it hasn't got anywhere.. People have thought I'm kind of crazy! But I like the idea of guys just kind of bantering about real subjects. I'd like to do that, but considering nobody's probably going to give me a half hour primetime TV, I'm probably doing what I should be. 

Awesome David! That was great. Thanks so much for sharing your stories and passing along so many amazing insights. We can’t wait to see what you guys are coming out with this year. 

Sure. You're welcome Guys. That was fun! Thank you very much, and best of luck with A LINE.

‍

‍

If you missed Part 1 of our interview, see it here