Ever wondered what it is like to run one of the biggest golf companies in the world? Or how Tiger Woods’ contract works? Or even, where a golf CEO sits in the distance debate?
In light of the lack of tournament golf at the current time due to the coronavirus pandemic, we have gone back through the archives to find some previously unpublished content.
In this exclusive interview from the end of 2018, TaylorMade CEO David Abeles covers all things relating to the equipment sponsor of Tiger, Rory McIroy and Jason Day, among others, discusses everything from departing Adidas, to releasing new products and the effect of an equipment rollback and bifurcation.
Over a year removed from the sale of TaylorMade by Adidas, how do you feel the company is positioned after the change?
We initiated the sale process, pulling TaylorMade out from Adidas global back in the spring of 2016 and after a very diligent process to identify the right buyer and the right partner that would enable TaylorMade to continue to grow and continue to advance in the game of golf, we aligned with a New York based private equity group called KPS Capital and we signed and closed our deal on October 1st 2017.
So effective October first 2017, we were a standalone, privately held equipment and golf ball company, TaylorMade. Some of the larger markets around the world like the United States, Canada, Japan, Korea, the UK and continental Europe, TaylorMade already had free standing, independent, vertical organisations.
So, it was very seamless to transfer from Adidas specifically just to TaylorMade in those markets. However, in some other markets, Australia being one of the them, we shared office space with Adidas, we integrated our back office functionality with Adidas, and even though we managed the golf business separate from the big Adidas business as part of TaylorMade Adidas Golf, it took us 12 months, we had a 12 month separation agreement to be able to stand up a direct legal entity infrastructure here in Australia to service the Australian market on behalf of just TaylorMade. So, on October 1st 2018 we officially separated from Adidas in Australia, and now we have formed a legal entity, a wholly owned subsidiary of TaylorMade global called TaylorMade Australia.
The engagement with our new financial sponsor has been fantastic. As much as they were interested in buying TaylorMade, we were equally as interested in having them buy TaylorMade. And the reasons for that, their competencies and their background is owning companies that have incredible capabilities of manufacturing complicated, complex products.
So, most of their assets are more industrial manufacturing assets, but when we talked with them they asked what was some our real opportunities were moving forward, and the answer was taking the ideas that we have for innovation that drives better product performance for the future and be able to industrialise them. And while we have very dynamic supplier base and partner base on the manufacturing side, the technologies that we continue to bring to market are only going to continue to improve. Having a partner like KPS that understands how to support our needs in building those types of products and product technologies has been fantastic.
"Quite candidly we now follow the compass in terms of when we launch products not the clock. And that has served us extremely well over the past four years." - David Abeles.
Under your watch the product life cycles have changed for TaylorMade, products stay on the market for longer and there is more consistency. Will that business model of how you launch product continue to change under KPS?
One of the things that gets confusing when outside parties that don’t know TaylorMade or KPS try and understand the relationship. TaylorMade is simply a loyal company of KPS, and the KPS partnership essentially expects our leadership from my office down through the organisation to run and lead the company and make strategic decisions that are in the best interest of continued growth and sustainability in our business.
KPS really does not dictate strategy to TaylorMade, our management creates the strategy which then ultimately is effective in the global market.
So, in terms of product life cycles, I’ve been back with the company for four years this Spring, and I was gone for a couple of years and there was quite a bit of dialogue that TaylorMade was bringing too many products to market to quickly. And quite candidly, that’s absolutely right, we were.
One of the real tenants we put in place when I returned to the company with our Research and Development (R&D) teams and product creation team, is the notion that any product we ultimately choose to bring to market, it has to be measurably better, in both form, which is what the product looks like, the design language that creates energy and excitement through the eyes of golfers, and function, which is technically how it actually works.
And we have these tenants in our organisation these past four years that essentially say “If we can’t be better in form and function to our prior products and relative to the competitors, we will not bring a product to market.
So, quite candidly we now follow the compass in terms of when we launch products not the clock. And that has served us extremely well over the past four years.
That commitment to only releasing product after extended testing periods and improvement, I am guessing is aimed at not only ensures performance for golfers testing but wins back some consumer confidence back a well?
One of the things that we have learned is, and I think that golfers are starting to appreciate, is that because we are humbly managing our relationships better with our golf partners and consumers, is that we are going to invest so heavily in technical improvements to help golfers play better, it creates great equity in our brand and our relationship with golfers and they are seeing that.
I will be the first one to say, we’re not perfect, but we are getting better every day and by virtue of the success of the company over the last three and four years, it’s been extraordinary. We will grow our business this year (2018) globally by almost 30 percent. And we are one of the largest manufacturers of golf balls and equipment in the world, so I am extremely proud of the work our team is doing and I am even more proud of the products coming from our team, that are providing us feedback from golfers that we are absolutely doing the right thing, so we are going to stay the course and continue to invest in better technology.