19 November 2010 Jochen Zeitz
He may have been CEO at Puma since 1993, but Jochen Zeitz shows no sign of slowing down. The one-time wunderkind of the German corporate landscape talks to Phin Foster about the brand’s responsibility to create a better world and why sustainability has to be much more than a CSR initiative.
A quick glance at Jochen Zeitz's ré sumé reveals that he is not a man to do things by half. Aged 30 he became Germany's youngest ever CEO of a publicly listed company. Seventeen years later, he is now the country's longest serving one as well.
In that intervening period, he has transformed Puma from chronic lossmaker into global super brand, pioneered the shift for sports and lifestyle goods from the playing field into the fashion arena, and initiated a £3.6bn takeover by French luxury goods retailer PPR. He speaks seven languages, runs marathons, flies airplanes and, quite possibly, fights crime in his spare time. Tall, toned and never seen wearing a tie, Zeitz is the very personification of the modern day 'super CEO'.
And now the 47-year-old is onto his next challenge: positioning his organisation in the vanguard of the fight against climate change. At the Business for the Environment Summit back in April, it was announced that Puma would become the first carbon-neutral company in the 'sportlifestyle' industry.
This followed hot on the heels of a commitment to reduce water and energy consumption, waste and CO2 emissions by 25% by 2015 and provides a cornerstone of its PUMAVision strategy, launched last year.
We meet in London's Design Museum, the setting for Puma's roll-out of a new shoe packaging and distribution system created by superstar industrial designer Yves Bé har. Sportswear may carry certain sartorial connotations, but this temple to stylish aesthetics is an appropriate location for a man who has commissioned collaborations with a roster of fashion and design luminaries that includes Philippe Starck, Mihara Yasuhiro, Sergio Rossi and the late Alexander McQueen.
Zeitz arrives in what has come to define his own brand identity: dark suit, open-necked shirt and a pair of box-fresh, own-brand sneakers - "I suppose you could call it a perk of the job," he remarks laconically. Sustainability, particularly postdownturn, with its emphasis on cost savings and operational efficiency, can seem rather a dour theme, but the CEO clearly believes this programme represents a great cultural fit for the wider business.
"For a long time our focus has been upon being the most desirable sportlifestyle brand out there," he explains. "Now we want to be the most desirable and sustainable. This commitment is the lynchpin of our corporate strategy and brand position. For the consumer, those two elements are moving ever closer together, but it is also our responsibility, as a creative leader, to contribute to a better world for generations to come."
PUMAVision is underpinned by The 4Keys, a tool for gauging whether the organisation is being fair, honest, positive and creative in all aspects of its operations and, in Zeitz's words, guides the company towards a "vision of a better world". It all seems rather grandiose, but the CEO clearly sees no point in thinking small. Besides, for all the bluster, simplicity lies at the heart of this approach.
"These principles guide us in everything we do; how we go about business, treat employees and business partners and, ultimately, the environment around us," he explains. "We wanted something that was simple and easy to apply. A lot of companies talk about ethical guidelines, you get a ten-page booklet to read through upon joining, it goes in the drawer and that's it. We've clearly defined what these principles stand for and they're already deeply ingrained in our DNA."
The way in which such ideas are communicated to the consumer is also of the utmost importance. Puma's commitment in-house has never been in question - the company introduced a code of conduct for reviewing and enhancing working, social and environmental conditions in supplier's factories in 1993 - but it is only recently that Zeitz decided the time had come to take these principles to the next level.
"It has not been a question of getting our people onside," he argues, "they have been on this journey for some time. It is more an issue of creating a wider platform. We needed to first create the foundation, and that's now in place. It feels like the right time to communicate all this to the outside world."
Although his argument carries a whiff of doing lots of charity but not liking to talk about it, Zeitz makes no effort to paint Puma as the perfect company. He believes too many large corporates have invested in projecting unrealistically virtuous interpretations of themselves, undermining critical causes and losing touch with the general public as a result.
"'Sustainability' and 'eco' have been so misused that it's become incredibly confusing," he says. "Nobody is perfect: not us, the consumer or the world we're living in. What we can do is try to make as positive an impact as possible. It's through painting a perfect picture that the disconnect comes, trying to portray yourself as something that you're not.
"We want to change the way we talk by admitting that there's a long distance to go, mistakes will be made along the way and we're not yet in a position to legitimately use the word 'sustainable' with any real validity. The first journey must be towards becoming less unsustainable."
It's a S-Index
Such commitment to honesty and transparency is possibly best encapsulated by Puma's S-Index, a set of criteria outlining the company's interpretation of what should constitute best practice in sustainability and communicating each product's sustainable credentials to the consumer.
Puma says 50% of its international footwear, apparel and accessories, and 100% of all packaging, will be S-Index approved by 2015. Monitoring the progress of all objectives is an external advisory board of sustainability experts. "The industry had failed to provide anything that we thought was suitable, so it became a question of developing it ourselves," Zeitz explains.
"Again, it's a question of going past doing the bare minimum: we've looked closely at our sins and taken responsibility for them. We have made it public - unlike a lot of organisations that keep their standards secret - and hopefully, over time, it can lead to a general standard that everyone can live by and accept."
This last point begs an interesting question: should sustainability ever be treated as a business tool for creating competitive advantage or are all companies fighting the same fight? "Ultimately, this is an area where you can never have too much collaboration and cooperation," the CEO responds.
"We should all compete for the best idea, finding it first provides an advantage in itself, but the idea should be shared when we get there. Do I think there's enough dialogue? Not yet, but we can set an example. My competitors will read anything I've said within five minutes of saying it and by saying it I'm engaging in a discourse. They know only too well that they cannot be seen to be lagging too far behind on this."
Despite Zeitz's obvious zeal, he readily admits that sustainability was not his first priority upon taking up the reins. Having been promoted under three consecutive CEOs in two years, in 1993 the then 29-year-old Zeitz was invited by Puma's new Swedish owners to give a presentation on where he thought the company was going wrong. He must have said something right: they offered him the job soon after.
The fresh-faced chief executive then embarked on a three-year programme of slashing costs, laying off staff and ditching unprofitable production lines. Within 12 months Puma was posting its first annual profits in eight years.
"I have to be honest enough to admit that my focus was elsewhere," he laughs. "When you're looking at completely overhauling a company that's in big trouble, issues such as sustainability are often left to others. It was my deputy who came to me and said it was time to start asking some fundamental questions about the way in which we do business. Over time it is something I have become increasingly passionate about, both from an ethical standpoint and as a way of developing the brand, but the credit is collective."
This is a movement that's most definitely now led from the top and the CEO jokingly refers to himself as "Mr. Sustainability" within the company - as his own finance director for the first 12 years of his tenure, Zeitz must be more than used to juggling multiple roles.
Building upon passion
It is also a commitment that exists beyond his Herzogenaurach office: 2008 saw the launch of the Zeitz Foundation, a not-for-profit organisation that looks to "maintain or improve the integrity of ecosystems through effective, sustainable management practices that ensure ecosystems continue to deliver services for the benefit of mankind".
Much like his CSR work at Puma, the entire project is shot through with a Germanic zeal for practicality and levelheadedness typical of its benefactor. "I wouldn't call it philanthropy," he declares, "it's a passion. The foundation is built upon a commercial platform and I firmly believe that private sector engagement, from a business perspective, is essential for any solution to be truly sustainable. We shouldn't just talk about protecting or conserving an area; the idea is to integrate communities and cultural and commercial specifics so that the area can eventually survive and thrive without external help."
Having overseen one of the most dramatic brand transformations in recent times, altering the way in which an entire industry does business as a result, Zeitz has developed a reputation in some circles as a workaholic. Not yet 50, he has been in the top job far longer than almost any of his peers fast reaching retirement age. Can we, therefore, interpret the emergence of such outside interests as a sign that he is finally slowing down?
"Not just yet," he laughs. "When a company grows 14 years consecutively, ten years in double digits, keeping up with that growth is a huge job. Your team is constantly evolving and it's difficult to let go. I've always tried to delegate, give my people enough room to work things out for themselves, but I'm ultimately responsible. That is as important to me now as it's ever been."
This, despite the voluntary public takeover by PPR in 20 n07. According to industry rumours, the French luxury giant had previously offered Zeitz the role of CEO at another one of its fashion subsidiaries, Gucci, and one of the board's first acts upon acquiring Puma was to extend his contract by five years. Despite the new ownership, Zeitz claims to enjoy as much freedom as ever.
"They are extremely supportive and have a real understanding of what we are trying to do and where we are trying to go," he says. "Of course there's a supervisory board that signs off on overall strategy, but they acquired Puma because they admired the brand, not because they wanted to change it." And is PPR fully supportive of these sustainability aspirations, even though Zeitz acknowledges significant initial rises in cost and the scheme will become cost-neutral at best over the longer term?
"We don't look at this as a CSR initiative," he replies evenly. "It lies at the very heart of the brand itself and everyone is in this together."