Figure 1: The Mercury Wing ad


n 2007, Mercury International, headquartered in Colorado with international operations in the Americas, Europe, and Asia, seemed to be stumbling on its own path. Once founded based on two runners’ love for extreme trails on mountains and in snow, Mercury diversified to produce new products, including Booster Insoles and SweatLess apparel, as well as new services, including booths dedicated solely to those insoles and Mercury Clinics, where podiatrists and personal trainers alike offered services to Mercury consumers. The problem was that, despite continuous diversification in the products and services offered, Mercury couldn’t gain much traction in the market place, and its revenue remained for the most part stagnant. So Mercury did what so many companies do in such a situation: they went to a team of specialists to consult about their future. They recruited five different people, each with different areas of specialty, and they asked that team to implement and execute a strategic plan using a high-tech simulation. If you’re thinking of Mission: Impossible right now, you’re not far off, and just recently we sat down with the team’s designated Chief Marketing Officer, Will Entrekin, to gain insight about what Mercury did right and what they might yet do righter.

Mercury: Challenges from the Start We first sat down with Entrekin in his new offices in downtown Pittsburgh, a city where he recently took up residence after a few years in Manhattan. His resume is as diverse as his bio—degrees in fiction and screenwriting from USC; studies in science and literature as an undergrad; experience as a broadcast production assistant, university-level writing professor; and personal trainer to the stars. Ask Entrekin if there’s anything left he hasn’t done, and he’ll answer honestly after a moment’s pause: “Oh, lots. But hey, I’m still pretty young, and tomorrow’s another day.” Entrekin admits he was reticent when Mercury first approached him. “Honestly, I’ve had really bad experiences working with teams. Too many cooks in the kitchen, and the soup goes off, you know? Tell you what, though, this has been a unique experience for me. I worked with some truly intelligent and creative people who were willing to go above and beyond. There were no weak spots in the team Mercury assembled, and I think that’s what made it successful. I’m happy to talk to you, don’t get me wrong, but you have to know that, on my own, I would have tanked.” That self-effacing demeanor seems at odds with the idea of a marketing guru. But Entrekin wouldn’t want that label, anyway. “I’m just trying to do my job. And here’s the thing: I’m happy to talk to you, and really flattered you

want to talk to me, but what you’ve got to know right off the bat is simple. I failed.” Odd words, from a wellknown figure to a national magazine, but Entrekin elaborates. “I don’t know if I should tell you this, but Mercury hired our team to make it the number three athletic apparel company in the world, and now that our team’s tenure is over, it’s pretty clear we missed that goal. There were several factors that contributed to the fact that we missed, but I believe, pretty firmly, that business is not the sort of place to make excuses, so I say

this candidly and honestly: we had some great success across several different rubrics, but when it came down to appreciably increasing Mercury International’s market share, we failed.” “On the other hand,” Entrekin notes, that charming smile on his lips, “What’s market share, anyway? Apple only has 10% of the PC industry, but it is, far and away, one of the most successful companies on the planet with the greatest stock margins and annual fiscal performance.” Indeed. And Mercury International is no longer just

an athletic shoe company specializing in unique shoes targeting the needs of niche runners. Entrekin and his team saw to that, and in our exclusive interview, he reveals some of the insights his team had, working for Mercury. FORBES: Let’s start with strategy. How did early decisions affect your later strategies? ENTREKIN: To really address that, we have to mention our overall strategy, which might not be exactly apparent from the outside. Mercury had some great autonomy in its different regions, which helped with both operations and exchange rates. When we wanted to sell product in Europe, we built it onsite. We didn’t have to import it from American operations. That’s pretty huge, and we wanted to preserve that. We saw it as one of Mercury’s biggest strengths. On the other hand, we also saw what we thought of as fragmentation across the company. Which I think I understand better now. You look at a company like Nike, and it started with a track shoe. A general purpose runner. Wait, look— (Here Entrekin pauses. We’re conducting the interview in his office, and he turns to his desktop and pulls up a site to corroborate what he’s about to say. See the sidebar for further information) So Phil Knight wanted a better running shoe, and that’s what he did. My dad wore Onitsuka Tigers. They’re crazy

light. That’s what Knight to the new product, we’d lose wanted. those production lines for Mercury had a different start. other products. They’d be It began with specialized useless to us until they sneakers—suited to hiking up completed the new product mountains and running in the numbers we had demanded. snow. Let me ask you a question: do you run up The bottom line is that Mercury is a mountains? Do you run better company after my team’s tenure in snow? I’m a personal with it. trainer, and I don’t do either. And that was what we That knocked our saw as Mercury’s problem. It production out pretty hard had some really niche early on. And if you look at products that served certain our numbers during the first special demographics really year we were consulting, we well. And then it had some took some hits there. We niche services—insoles and spent a lot of time and effort these clinics and SweatLess having to make up those apparel. Which is all well and losses. good, but where’s the However, once we got those cohesion? There was no single production lines completed, product Mercury could offer we could fire on all our and say: “You want to run? cylinders, so to speak, and our This is for you.” operations started to meet our So the first thing our team expectations again. We also did was introduce the Mercury started asking questions like Wing. With its tagline “For the Hambrick (2005) might have, Fleet of Soul.” about whether we had a F: Which you came up with? strategy and how closely we E: Team effort. But I am were adhering to it. CMO, and do the branding. I F: So the main challenges did some early mock-ups of facing Mercury when you our logo, too. I also did the came on— ads and copywriting for E: That fragmentation was a SnowStep, TrailStep, and the big challenge. Not only were Wing. most Mercury products very But you asked how early niche, but Mercury didn’t decisions affected later seem to be committing wholestrategy, and that was our first heartedly to any single decision: to bring to market strategy. The team felt our and fully promote that new best solution was not just a product. The problem was few problem-solving strategies that, even though Mercury has but an overarching vision that that innovative, autonomous could really take the company operation I mentioned earlier, to the next level. We saw that what it doesn’t have is a way as the best way for it to gain to handle so many production market share, which was one lines. We didn’t fully of its primary goals. understand that, the moment F: Did your strategies we dedicated production lines change as you went?

E: They had to. Actually, our biggest change was to pull back. It’s funny: you wouldn’t think that too much demand was ever a bad thing, right? Or maybe you would, but I wouldn’t. Thing was, we had so much production dedicated solely to new product we hadn’t yet brought to market, we had literally no production left over for Mercury’s other

products. Which people didn’t stop wanting, of course. That was our biggest challenge after we implemented our strategy. We had to adjust our vision to fit Mercury’s unique operations process, and we had to account for the fact that we simply couldn’t create as much demand as we had. It’s a unique position to be in, especially as CMO, but I had

to agree that we reduce our marketing, thereby reducing the demand for supply we didn’t actually yet have. Midway through our tenure with Mercury, we found ourselves in a position having to balance all that demand with our limited supply. We had to produce more. We had to add lines to fulfill work-inprogress inventory. We had to shrewdly assess how our personnel stood, and where we needed to add both staff and production lines. In the end, I feel we were successful in that. When Mercury came to us, they wanted to be take over third in terms of market share in the world, and we might not have achieved that, but we made some amazing strides in terms of production, operations, and marketing. I’m really proud of that. And even though we didn’t meet Mercury’s market share goal, I think the company will probably be number three—and maybe even number two—in the next few years. F: So you think you were effective? E: Define “effective.” Did we increase Mercury’s revenue? Yes. Did we increase its stock prices for shareholders? Yes. Did we introduce a new product the likes of which Mercury had never produced? Yes. Did we do so well enough that demand for it far outstripped our ability to produce it? Yes. Did we substantially increase Mercury’s revenue? Yes. Did we substantially increase Mercury’s earnings? Yes. Did we streamline operations? Yes.

The bottom line, I think— and this is a bold thing for me to say, but I say it because I believe it—is that Mercury is a better company after my team’s tenure with it. Its market share might have stayed the same, but that’s really the only number that has, and it probably wouldn’t have if Mercury didn’t have such a unique implementation of production and operations. I’m really, really proud of the work we did for Mercury International, and I hope that Mercury is pleased with the results. Given that we increased its stock price to nearly $80 from just north of $30, I think we did a great job. (Ed: At the time of this article, Mercury shares trade for $79.91. Last year, those same shares traded for $30.78. In addition, Entrekin’s team increased Mercury’s earnings before interest, taxes, depreciation, and amortization [EBITDA] nearly 200%, from $347.66 to $607.36), and it’s annualized revenue from $3.7 to $4.2 billion dollars. We’d agree they did a great job. See sidebars.) F: What would you have done differently, knowing what you do now? E: You mean how could we have been even better? We could have talked to Mercury to better understand their practices and operations, so that we didn’t take hits to supply when demands were high. I think that was our single biggest weakness; if we hadn’t encountered that setback early on, I think there would have been a great chance we could have made Mercury number 2 in terms of market share. As it stands, those first few years were the

ones that challenged us most, and mostly in terms of production, operations, supply, and demand. Mission and Values It’s worth noting, here, Entrekin is an Eagle scout with an undergrad degree in science and a graduate degree in business and marketing; to say he is conflicted when it comes to values might well be an understatement. E: It’s not that I don’t believe in values. It’s just that I’m not sure how values apply to business. Or science. Take evolution. When it comes to society and civilization, philosophers have wasted millions of pages arguing for morals and ethics, but when it comes right down to it, life and biology value what’s strong. Survival of the fittest. F: But you’re an Eagle scout. E: None of that is to say that the fittest can’t offer a hand to others. Just, fortune— results—favor the fittest. F: So if we ask how your team balanced margins and missions— E: I will admit I haven’t a clue what you’re asking. Look, here’s my philosophy: all businesses are, at their most fundamental, service industries— F: But surely— E: Nope. All businesses. Go on. Name one. F: Let’s take your biggest competitor. E: Nike? Easy. Everyone thinks Nike sells sneakers, but really, they provide a way to run better. F: Apple. E: You think Apple sells phones and music players?

iPods are just a better way to access and listen to your music library. iPhones are just a way to integrate all the disparate tools you use every day. It’s not that I don’t believe in values. It’s just that I’m not sure how values apply to business.

F: So Mercury— E: When we started, Mercury’s services were so specialized as to alienate. It provided a way to run up mountains, and a way to run in snow, but what about people who just wanted to run? Mercury had insoles for sneakers, and clothing for people to wear while wearing sneakers, but again, when it came down to it, it provided no service whatsoever to any runners who just wanted a regular pair of cross-training sneakers for the gym and yoga and Central Park. By specializing, Mercury was, in effect, alienating a lot of runners. For example, I’m a personal trainer in New York City. I take on a few clients selectively to train during the evening. There are no mountains in New York, and people don’t run in the winter; they join a gym so they don’t have to. So one of the first things we did—or tried to do—was introduce that new line. F: And about values? E: I’m not sure how to answer those questions. When Mercury came to us, they wanted to higher revenue, higher stock prices, and a higher position in the overall

For Further Reading Hambrick, D.C. and Fredrickson, J.W. (2005). Are you sure you have a strategy? Academy of Management Executive, 19 (4), pp. 51-62. History (of Nike). N.D. Retrieved March 1, 2011 from ker/nikhist.html Hopman, J.W. (2005). Managing uncertainty in planning and forecasting. Intel Technology Journal, 9 (3), pp. 175-183. Veth, G. (2006). The new science of strategy execution. DM Review, 8 March 2006, pp. 6.
market. They didn’t hire us to make their company more socially conscious. If they’d asked us to start a foundation for underprivileged children, I’d have a better answer for you. F: But you did some good work. E: Our numbers were spectacular. We’re proud. F: Nothing that went beyond numbers? E: During our third year or so, there were forest fires in Indonesia that decimated a few of our factories there. We had to rebuild a lot, and we lost a substantial amount of production. We also had to consider uncertainty, and we took what Hopman wrote in 2005 into consideration as we continued. When we rebuilt, though, we pledged an additional million dollars to other relief efforts. Part to local healthcare, part to Habitat Indonesia—which helped rebuild a lot of lost homes—and part to environmental relief efforts. We did those things because it was the right thing to do. We’ve gotten to rely heavily on our workers in our Asian facilities, and they were in need, and we helped provide. It was a side value, if you will; one can focus on the bottom line while still being socially aware and conscious. F: Do you have values recommendations for Mercury down the line? E: Like what? Start a foundation? I think Mercury does great work, and I think it now provides a great way to run better to people who want to do so. I think if it keeps people—all people, not just its customers—in mind, it’s going to have a great run. It’s interesting that Mercury is implementing Mercury Clinics; rarely is a company’s service mission so clear. I think if it continues to deliver to its customers the best products it can, and provide the best services it can, that’s a pretty great mission. Performance Entrekin’s team’s work with Mercury was not perfect.

There were several challenges over the years. F: So what do you think you did well as a team? E: I think our single greatest accomplishment was focusing Mercury’s mission. We helped focus a product and service line that had, over the years, become too fragmented to really succeed in a crowded market, especially in the ways Mercury hoped to. I’m really proud of the Wing, and our marketing efforts. When you can increased demand to such an extent it so vastly outstrips supply, I think that’s terrific. I know there were dissatisfied customers, and I felt bad for them, especially because when it came down to it they had a need we were unable to provide solely because we didn’t have the stock to do so, but we kicked our production back up, added lines, and I think we succeeded in more ways than we failed. We gave a lot of thought to how to execute strategy, including ways Veth outlined in 2006. F: In what ways do you think you failed? E: You know, there’s an old anecdote that, in Asia, that the word failure is actually two words: crisis and opportunity. Not knowing any Asian languages myself, I can’t confirm the veracity of that fact, but I can tell you that it makes sense to me. We had a few crises over the years; our biggest was that production hump we encountered early on. We didn’t make Mercury the number three athletic apparel company worldwide. But did we introduce and take advantage of opportunities? I think we did.

We really strengthened what were already strong production operations. That autonomy Mercury had was fantastic, and I think my team helped enhance that, bringing in new personnel and strategically adding lines. I mentioned the fact that demand outstripped supply, but think about that for a moment: people wanted our shoes. When people were shopping for sneakers, when they needed protection for their feet, they came to us. Not to Nike, not to Reebok, not to Adidas; people wanted Mercury shoes. We might not have achieved growth in market share, but we achieved something more nebulous: growth in people’s minds, and in cultural awareness. To allude to MasterCard, regardless of the money we spent on marketing or lost because of missed sales, that growth in awareness is priceless. Team Playing Not all teams work fluidly together; there are often arguments or other challenges that prevent a team from fully gelling. Entrekin says that wasn’t the case. F: So describe your team decision-making processes. E: Working with the team was incredible. I mentioned, I had bad experiences with teams before. You always worry about that. But we really had the perfect Mission: Impossible sort of team. Like, think of Ocean’s Eleven. We were Mercury’s Five. We had strengths—it emerged early on, for example, that I’m good at writing and marketing. So

whenever there were tasks we had to fulfill that involved a lot of writing, I volunteered. I think in prose—which is sometimes a limitation for me, in businesses of bullet points and Excel. However, we held frequent conference calls, and we went over all of the tasks in front of us, all of the points of the plan we had to accomplish. For the most part, we volunteered for those tasks we felt most comfortable with, or with which we had the most facility. Some people were great with numbers and were happy to fulfill those. The thing to remember is that never once was anyone performing any task the full team hadn’t had input in. Every number, every objective, every movement of cash in region or addition to production line: we discussed and agreed on every move as a team before making any of them. F: So no changes? E: It would have been nice to have actually met with everyone, but that’s just because I would have loved to have shaken their hands and thank them for a great experience. F: So how did you measure success? E: We were successful when the numbers went up. When numbers went down, we knew we had to resolve problems in those areas. F: What influence did the organizational structure your team selected for the company have on your decisions and the results you achieved? E: I’m not sure I understand the question. Sorry. When we

got into our team, our natural strengths started coming into play pretty early on, and we followed those. I think we grew organically, and I think our roles developed accordingly. External Factors Over the years Entrekin’s teams consulted for Mercury, there were large-scale changes on the international level. Given Mercury’s operations across several continents, we were curious how those changes affected Entrekin’s teams’ plans and goals. E: When we started with Mercury, we saw autonomous operations as a particular strength. There was less to import and export between regions, and we didn’t have to worry much about exchange rates because so much regional business could be performed within regions. As we see it, that didn’t change. One of our team’s major goals was to sustain that strength through our work, and we feel we accomplished that well. F: How do you think economic factors affected your performance? E: I’ll tell you how they didn’t; because of autonomous regional operations, we didn’t have to worry so much about exchange rates and the sorts of sociopolitical factors one might expect. The only external factors we really felt were those Indonesian forest fires, and the sudden opening of the market in Asia. That latter was half the reason we performed so well during the later parts of our tenure. F: How so?

E: We’d already planned to introduce the Wing. We’d already been producing it. We’d already been marketing it. However, those policy changes gave us an opportunity to really provide for that market in ways that had been restricted before, and I think that’s a direct cause of our exponential growth at the end of our tenure. If you look at our numbers throughout our service, they were largely consistent through a few years. Then, last year, there was just an explosion, due largely to the change in the market in Asia. It was pretty spectacular. F: How did the competition affect your decisions? E: It didn’t. You can’t let it. Truthfully, one of the things I was disappointed by, to start with, was that Mercury was going to gauge its success against its competitors, in terms of market share. I feel that’s anathema to providing a good service. As a business— and I mean any business—I think the most important thing is to identify the service you provide and do so to people who need it as best you can. One thing my team did early on was consider: what’s Mercury best at, and is it doing its best at whatever that may be? Forget Nike and Adidas: who are we, what do we do, and how can we do it better? F: Did political issues have any impact? E: The new WTO policies in Asia certainly did, but our response to them was a natural extension of what I just mentioned. When that market opened up, our number one concern wasn’t how to exploit

it. Our first thought was, okay, there are suddenly a billion more people who need our products who can now buy them. How do we make them aware of us, and how do we get our products into their hands and lives. Entrekin: Personally and Professionally Now at the end of his tenure with Mercury, and well known in the business world, Entrekin has a lot ahead of him. We asked what’s next. E: I’ve been focused on Mercury for long enough I want to get back to what I do, and marketing is only a small part of that. I’d like to write more. I’ve founded an independent publishing company that aims to target Amazon’s Kindle platform. F: What did your experience with Mercury teach you? E: First, that I love the marketing and branding aspects of business. I mentioned how I thought business was all about

provision of service, and I feel like I’ve learned that is the service I provide best. It’s also taught me a lot about limitations. I’m a writer at heart, a communicator; I’m less adept when it comes to numbers. Working with a group was great, too, because sometimes I know, in a big picture sort of way, what needs to happen, but figuring out how to make it happen is more challenging. As a writer, part of the process is knowing a story’s ending and beginning and figuring out how one gets from the former to the latter, but with writing, it’s okay to make a lot of mistakes along the way. You just hit backspace. There’s less margin for error, and less forgiveness of them, in business, so it’s great to be in a position where several different people with very different perspectives can communicate effectively concerning the next plot point, so to speak.

What I really learned is that I thrived in this situation, but did so mainly because of the great people with whom I was working. I think controlling any international company with such huge operations would be a challenge, so the best thing one can ask for is not perfect vision or business acumen but rather a really smart, really talented team, the members of which are passionate about what they’re doing and can communicate well. F: Like a family? E: A little. But one with a mission. If you think of a family who gets paid to host a fantastic Christmas party, that’s sort of what I mean. F: But only sort of. E: It was your simile. F: How do you think your experience is going to benefit you? E: I’m sure there are myriad ways my tenure with Mercury will influence the way I do business down the line. I think, honestly, one big influence will be that I’ll be less likely to be wary of working with groups. Before this experience, group work always made me groan. Now I realize part of the reasons for my experiences might have been self-fulfilling. Maybe I wasn’t as open as I could have been, or communicated as well as I thought. *** We think Entrekin underestimates himself, but we think he’s demonstrated his commitment to following new paths. Since this story was

written, in the time it took to usher it to publication, his books have flourished on Kindle, and it turns out Entrekin is a first-rate novelist every bit as much as a firstrate marketer; his Meets Girl is every bit as much a satire of first novels as it is an actual first novel, and it is as sly and charming as Entrekin’s smile. If we take Entrekin at his word, however, the true measure of Mercury Athletic Apparel would be in how it fulfills its consumers needs moreso than in how Entrekin’s team met Mercury’s board’s goals. In that spirit, we approached some of Mercury’s best known customers and asked them to comment. We think it’s appropriate to close with what they said. *** Michael Bloomberg, former New York City mayor, current presidential candidate. I wore Mercury Wings every morning, knowing that my presidential campaign would be grueling and I’d have to be in the best possible shape for it. I’m confident I can run the country, because I’m confident I can run in Wings. Mark Zuckerberg, founder, Facebook. Not only do I wear Mercury Wings every morning when I do yoga and every evening when I kickbox, but I like them on Facebook, and I’m just one of millions of customers on their company page. Ben Roethlisberger, quarterback, Pittsburgh Steelers. I was wearing Nikes when we lost to the Packers. Now I wear Wings, and I’ve really turned my game around.

Steve Jobs, CEO, Apple Computers. Every blog on the Internet analyzes every minute of every Apple keynote speech I deliver, down to constant reminders of my signature uniform of a black turtleneck and blue jeans. Why they don’t comment on my Mercury Wings, I’ll never know. Jeff Bezos, CEO, Mercury’s Wing sneakers have revolutionized my morning workout every bit as much as I hope Kindle has revolutionized people’s reading habits, and given my ambitions, and how many Kindles we’ve sold, that’s no small thing. Christian Bale, actor, The Dark Knight. I’m Batman. Our costume people choose my athletic gear. But if it were up to me, I’d fight crime wearing Mercury Wings. Criminals wouldn’t stand a chance. Eminem, rapper. Yo, Mercury Wings? Best kicks since Jordan rocked the Airs. Michael Jordan, former Chicago Bull. Mercury Wings? If they’d been available twenty years ago, either they’d have been Mercury Air Jordans or my nickname would have been Wing. Either way, it would have been pretty cool.

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