By: Tyler Starr
There are very few companies that have grown as fast as Under Armour has in recent history. From C.E.O. Kevin Plank starting the company in his grandmother’s basement in 1995, He rapidly transformed his ideas for athletic wear into one of the biggest and most well-known brand names of the current generation. Since going public with the company in 2005 there has been a 900% growth in the company’s worth and they continue to be on the front lines of innovation in the sports world. The purpose of this case study is to look at the managerial structure that is used by Under Armour to keep the company growing at its current pace and how Plank uses Situational Leadership Theory to keep all of his employees motivated and happy about what they can do for the company.
Situational Leadership Theory
Situational Leadership Theory plays a big role in how the company is run when it comes to Under Armour. Situational Leadership Theory states that there are four different types of leaders a person can be. The most appropriate style of leadership is based on your employees’ willingness and commitment (C.O.C., 2016). The first style of leadership is Directing. This style is used most when the employees have little ability to do the task at hand and also are not committed to getting it done. The leader has to walk them through the process and watch over them at all times. The second style is called Coaching (C.O.C., 2016). This style is used when your employees have a very high commitment to get the task done but they do not possess the ability to do it themselves. This style promotes much more two way communication within the organization and allows the employees to give ideas. The third style of leadership is called Supporting. This style is useful when your employees have the ability to do the job, but they do not have the drive or the commitment to the cause to do it (C.O.C., 2016). With this style, the leader allows the employees to complete the task without his help but he maintains consistent contact with them to make sure they follow the correct process and get the job done the right way. The fourth style of leadership is the Delegating style of leadership. With this style of leadership, the leader has trusted employees that not only have the ability to complete the tasks at hand, but they have the drive and commitment to take on the responsibility (C.O.C., 2016). This is the most fully developed style of leadership that allows for a business to begin to grow.
The next aspect of Situational Leadership Theory is the maturity level of the leader. This is rated on a scale of M1-M4 (Hersey, 2010). The level that a person receives on this scale will, in a way, dictate the stage that they can get to when it comes to style. The M1 level, is when a person cannot be held responsible for completing tasks on their own. They feel comfortable helping the group get things done but are not able to be trusted with their own tasks. The M2 level is when the initial period of learning is over and they are still unable to perform the skills that are necessary to complete the tasks at hand (Hersey, 2010). This level of maturity is still not responsible for the completion of tasks. M3 maturity is when a person can begin to climb into a position of authority within an organization (Hersey, 2010). This is the level where a person is finally experienced enough at their skill where they can be held responsible for completing tasks on their own and will do them. They do, however, still lack the willingness and confidence to take on big responsibilities. The final level of maturity, M4, is when a person has the experience, confidence and willingness to take responsibility for, and complete tasks all on their own (Hersey 2010).
The third aspect of Situational Leadership Theory is how well a leader can motivate his people based on their competence of the leaders goal and how committed they are to helping him achieve that goal. They can be low or high in either competence of the goal or commitment to the cause. Obviously a leader would like to see all of his people be high in both categories. If a leader has employees working for him that don’t fully understand what the goal of the organization is and they are not very committed to getting the job done, then there will be very little progress made on any kind of projects or decisions that are to be made. If the people of the organization are high in both of the categories then it takes a lot of the stress off of the leader to do a big portion of the work. His employees know what the mission is and they want to get the job done so they will take the responsibility to make sure it is done right (Hersey 2010).
When asked to think of a company that has continually been on the front lines of innovation in the sports world during my generation, Under Armour is one of, if not, the very first brand that comes to my mind. In 1996, based out of his grandmother’s garage, Kevin Plank revolutionized the way that athletic apparel was supposed to look and feel and, in a way, ushered in a new generation of sports technology (UA Inc, 2016). He was the Special Teams captain for the football team at the University of Maryland and he was getting extremely frustrated with the performance of his cotton t-shirt that he would be wearing under his pads. He knew that there had to be something that would work better. He came up with a moisture wicking compression shirt that would keep an athlete dryer, cooler, and lighter than any cotton t-shirt could. The innovative shirt was called #0037 and would one day be known as “Heat Gear”. In 1997, Plank made his first team sale and the business, and the idea, were off on a fast track for success (UA Inc, 2016).
In recent years the company has had success in almost any major sport that is played around the world. Their list of sponsored athletes that represent their brand includes some of the biggest names in American sports. Some of the names on this list include Tom Brady, Stephen Curry, Jordan Spieth, and Bryce Harper. They are also set to take over as the sponsor for all of the uniforms worn in Major League Baseball in the 2020 season when their current contract with Majestic apparel ceases to exist (Rovell, 2016). They are always looking for the next star to come up the ranks so they can add them to the, already impressive, Under Armour team.
When it comes down to the overall success and growth of Under Armour as a company, it can be linked back to the leadership and guidance of Kevin Plank. He has had a very solid plan of attack at how to keep the company at top of the industry and how to keep the company moving forward. He has a very unique style of leadership that involves lots of sports metaphors to keep the employees motivated to do the absolute best job that they can (Blazek, 2015). He says that have motivated and driven employees is the most important thing because you need drive to have the will to come up with good, new ideas all the time.
To keep communication open with his employees he has a board of nine directors that have weekly meetings to discuss all of the company related subjects that are important at that time (Board, 2016). The people on the board have almost just as much decision making ability as Plank himself. Each one of these directors then has another small group of employees that work for them. They have these same meetings with those people and on down the ranks. This gives employees of any rank the opportunity to share their ideas and have those ideas make it all the way to the top of the company (Board, 2016). To ensure that the decision of who is on the board of directors isn’t a bias choice, a group of employees that are not on the board vote to elect who will sit with Kevin Plank at the highest level of the company (J, 2012).
Plank says that he wanted to run his company like a big sports team (Blazek, 2015). Everyone playing their own respective role that allows the entire team to achieve greatness. The style in which he leads his company is shown in the ads for the brand. The first slogan that the company used was “Protect This House”. This was very symbolic in the way that it was done, using star players from his alma mater, Maryland University, as the actors. This advertisement showed that the company had its roots in Maryland, and more importantly America and that was where they wanted to continue to be an innovative brand.
Kevin Plank has shown that he is in the fourth level of all three aspects of Situational Leadership Theory. He has taken a delegation style of leadership when it comes to the way that the company is run and we see this by the structure of the management. This is shown with the board of nine directors that Plank talks to when making choices. He doesn’t directly communicate with the people multiple steps under him. Although, they still receive the information that the C.E.O. wants them to receive, they do not attend his meetings. Another way that we see the delegation style of leadership is in the way that his employees make decisions without always being watched over. They have shown that they have the ability to take on responsibilities on their own and they also have the motivation and commitment to get them done.
Plank also possesses level four managerial maturity. We know this because he began the company all on his own, from the ground up. Being employee number one has a big impact on his ability to complete tasks. He has shown that he can take the responsibility of any task that would be necessary to further the company and grow the name of the brand. The third category of Situational Leadership Theory is not as directly related to Kevin Plank, as much as his interview and employee selection process. He chose employees that, when hired, would perform tasks on their own that would benefit the company. This also shows in the way he puts employees in the best position for them to succeed. Things such as when he moved, already C.O.O. Kip Fulks into the head position of the footwear department on top of his current position (McNew, 2015). He had multiple innovative ideas in the footwear area and, after being put in a position where he could focus the majority of his time on footwear, the department saw a 50% increase in revenue during the next fiscal year (McNew, 2015). To allow himself to properly perform in the delegation style of leadership and to have level four managerial maturity, his employees must have high commitment to the cause and a very high ability to take on major responsibilities.
Under Armour is an extremely innovative brand of sports apparel and equipment. They consistently stay on the front lines of innovation and are consistently coming out with the next big thing in the sports world. A large amount of their success can be attributed to the incredible leadership of C.E.O. and founder of the company, Kevin Plank. Through utilizing aspects of the Situational Leadership Theory, Plank has turned an idea that he had while in college into an absolutely revolutionary brand name across the globe. With the managerial structure that Plank has put in place, the brand should continue to stay on the front lines of innovation and be one of the biggest names in apparel.
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