Executive Smart Talk: Understanding the Crisis Culture

During his four years at the helm of Deckers Brands, Dave Powers has already navigated intense challenges — from activist investor activity to the California wildfires. Now the president and CEO is using his deep experience to tackle the complex coronavirus crisis.

Today, the executive opened his playbook during a candid conversation with FN Editorial Director Michael Atmore for the second “Leading in a Crisis” webinar.

Below, Powers reveals 18 big thoughts on crisis leadership, the power of great brands and how to make an impact in this important moment.

Listen to the replay of the webinar here.

Leadership mantras:

“People are looking to leaders right now across the board, and looking for signals on how they’re acting. I try to be steady and confident and calm, but up-front and honest. What I learned is to stay focused on what you can control, manage the communication closely — and be honest and up-front with your organization. Focus on the long term and scenario planning. Those are the things you always need to be doing, but they are amplified during a crisis. Make sure your leadership team is tightly aligned and plan for the day-to-day as best you can. But at the same time, plan for when you come out of it. You have the opportunity to come out of things struggling or come out of it in a position of strength. Every time we’ve faced adversity, we’ve come out in a stronger position.”

A new sense of focus within the company:

“The one thing I’m noticing is that things are settling down. People are getting used to working from home. People have moved from shock and awe to how we tackle this. Let’s get after the opportunities and figure out how to be strong when we get out of this. The biggest issue seems to be managing demand and supply, trying to predict when we’re going to come out of this and what it’s going to look like. We’re controlling our inventory and staying focused on both the short and long term.”

Why stepping up internal communication is critical:

“It’s really more about amplifying what the leadership team and I do on a regular basis. We’re focused on urgency, transparency, open and honest communication with our teams. More than ever, you need to be connected to your organization and people you employ. A lot of [team members] have kids at home, and they’re trying to juggle all of that. They want to know the company they work for is handling this the right way. They want to understand what’s happening in this business and want to be included in that … so they can minimize the stress and anxiety in their lives. My daily and weekly actions have shifted in this crisis as well — I think for the better. We’ve ramped up our daily communication dramatically. I am responding to emails or texts 24/7, but it feels great.”

Being a corporate leader in the Santa Barbara community and beyond:

“Consumers are very attuned to what companies are doing in this moment. We talk a lot about doing good in the world — it’s something that is core to my personal beliefs. One of the first things the leadership team talked about is what we could do for our employees to help take care of them and their families, and what we could do for the world. I reached out to our local community in Santa Barbara — we’ve been here for a long time — and there’s a lot of need out there, whether it’s individuals or [organizations] like the food bank. We focused on galvanizing other leaders and set up a fund called the “Santa Barbara Better Together” fund to do what we can to help small businesses. So many individuals and families rely on the work that they do. We’ve committed to donating a million dollars in cash donations. Each of the brands is doing their own thing.”

The power of Deckers’ brands in this moment:

“One thing that we are realizing is that our brands are time-tested, trusted [labels] that bring a lot of comfort and good feeling to our consumers. Ugg is a brand that lives in the comfort world —a name people go to when they want to be comfortable or hunkering down. What’s great about Ugg and our slipper business is that we’ve transformed that to be fashionable at home and beyond. It’s indoor slippers, outdoor slippers, and now a year-round staple for us. Hoka One One is a brand that changes people’s lives. The team has tapped into a new model [that] is connecting with the consumer and empowering the individual athlete. Teva [is another brand] that resonates.

The importance of smart messaging:

“We are leaning into authenticity and connecting with our consumers in a real and authentic way. It’s a fine line. You want to be there, but you certainly don’t want to be opportunistic. We’re going through this with them, together as a partner — and not as a product. [We want] to provide a little bit of comfort and safety. It’s a lot of work to change your marketing plan, but I think this is part of what the new normal will look like.”

Deckers headquarters
Deckers Brands’ office in Goleta, Calif., opened in 2014.
CREDIT: Courtesy of Deckers Outdoor Corp.

Biggest challenge:

“It changes weekly. At the beginning, it was about making sure we had the right technology [to work at home] and about how to keep the business running. We’re making real-time decisions. Right now, we’re focusing on what life is going to be when we get out of this. The leadership team and I are making sure we’re managing through this but seeing it as an opportunity to adjust our business and be stronger three, six, nine months from now. I think we have the opportunity to come out of this.”

The crisis playbook:

“We don’t have a book I can take off the shelf and hand to people, but I will say Deckers has been through a great deal of adversity: activist battles, challenges in the marketplace, fires, mudslides — and now a global pandemic. What we realized is quickly galvanizing, and focusing on the things that matter [is key]. Focus on the most important things in front of you. And ramp up your communication in the community. In a crisis, you don’t know how or when it’s going to end, but you have to be prepared for everything.”

Staying flexible:

“We need to get our arms around different situations and scenarios. We have a complex business, and each country or region is dealing with this in a different way. We’re looking at assessing those scenarios: If things start to turn back to normal around May, we know what to do. If it extends to July and August, we know what to do then. If it goes further, we have a game plan. Take a look at your business, your local knowledge and learn from your partners around the world. We had the advantage of going through this in China and Japan — and [we are] seeing how they’re coming out of it. … Right now it’s hard to predict and budgeting becomes challenging. You don’t have the certainty. Having a back-pocket plan, which we usually do anyway, both on the upside and downside, will become more important.

The “roller coaster” return to normalized business:

“[In Asia], they’re loosening up social distancing and starting to open stores a little bit. It’s day to day and it’s still slow to come back to normal. The return is not going to be a straight line, but more of a roller coaster, with dips and valleys and peaks. In Japan and Hong Kong, we’re seeing another spike in cases. Those are the scenarios we’re watching play out as we navigate the challenges.

Bolstering vendor relationships:

“The team has done a fantastic job connecting with our partners. We’re amplifying the amount of communication, and we need to work through this together. They need our help; we need their help. We’re making adjustments where we can — around [terms], inventory and marketing — to make sure we’re there for them. We’re conscious of the health and positioning of our brands. We don’t want to put that at risk. We’re making sure we’re still being presented in a quality way and staying on course. The consumer wants to know the brand is solid and is not changing in a crisis. That’s what authentic brands do.”

Ugg Fuzz Yeah
Ugg slippers have been a go-to for many people during this at-home period.
CREDIT: Amazon

Permanent changes:

“The landscape has been a bit risky going into this with the transition of people going online and the stores closures that have continued to happen. It’s a moment of survival of the fittest. It’s a sad situation because you’re going to see a lot of companies and a lot of employees and their families impacted by this. It’s a new playing field. Some will come out of this and be strong for the long-term. Some will struggle and might not make it. That’s why keeping our brands strong is important. Our partners rely on us for full-price selling and margins.”

Emphasizing proven product:

“One of the things that I’ve learned is that in times of uncertainty, trusted brands and products become important: Things that have high value and are going to have a positive impact. It’s not the item you want to wear out on Friday night, it’s what you can wear for the next couple of months. One of the things we’re working on is staying focused on franchise items and building on those”

Taking mental breaks:

“It’s important to get some downtime. When you’re on 24/7, you need to create that. For me that’s staying active. I love to be outdoors. I’ve adopted a lot of mindfulness exercises. I’ve been doing yoga for 25 years. We gave our whole organization a free subscription to a [wellness app.] Not only do they appreciate the effort, but it helps them when they come to work, so they can feel focused and balance.”

The consumer mindset:

“I think there will be a sense of nervousness: ‘Are things back to normal? Can I use my credit card again for discretionary things?’ Behavior-wise, one of the things that is going to continue for sure is curbside pickup. It’s amazing what a crisis will do to move business models urgently. But don’t wait for a crisis to change: Advance and innovate around your own business model. Be your own internal activist.”

Reese Witherspoon, hoka one one, running sneakers, celebrity style, los angeles
Hoka One One has focused its efforts on the everyday athlete, including celebrity fans like Reese Witherspoon.
CREDIT: Shutterstock

The store of the future:

“We have a flagship opening in New York that’s been in the works for a while. It’ going to showcase our full breadth of assortment, and we’ll have a service desk in the front so the model is fast and efficient. I’m sure you’ve seen lines outside our stores [around the holidays]. We’re working to eliminate that so consumers can come in and have things ready for them. [Overall], you will see retail that focuses much more on the showroom and service models. On the brand side, you’ll see that more and more.”

Sourcing shifts:

“The sourcing side of things is changing rapidly with the migration out of China into Vietnam and other countries. Only about 10% of our production is in China and that’s served us well. You’re going to continue to see more migration and more of a focus on speed and tighter inventory management. It’s going to be about speed, efficiency and product control. You’ve got to manage things tightly and be ready for anything.”

The online vs. brick-and-mortar balance post crisis:
“Certainly, you’ll see a faster ramp-up of e-commerce for everyone. We’ve been talking about that for a while, but it takes a situation like this to amplify it. But I’m a firm believer that people like the experience of shopping and experiencing things firsthand, not just virtually. That’s going to return — it’s what do stores become. You’ll see an adjustment, but the stores will always be there. The ones that have exceptional merchandising will thrive.”

Listen to the replay of our conversation with Dave Powers here.

Listen to the replay of our conversation with Foot Locker’s CEO Dick Johnson here.

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