BUSINESS CASE: Too Relaxed

As yoga classes gained in popularity, one company that benefited greatly was Lululemon. In fact, at one point, it was on Fortune's Fastest-Growing Companies List three years in a row. Company executives had positioned the company as a lifestyle brand, and customers were hooked and loyal. Then, a rare stumble happened. The company had to recall a large batch of its signature black "Luon" yoga pants because the fabric was too sheer.

Lululemon was founded in Vancouver, BC, by Dennis (Chip) Wilson, who had noticed in his yoga class that other students' yoga pants became see-through when they bent over after class to roll up their mats. Having just sold his surf/skateboard/snowboard clothing company, he sensed an opportunity to pair his expertise in "technical" athletic wear with the surging demand by yoga enthusiasts. What he developed was revolutionary! Instead of following what others had doneessentially cutting down men's workout wear and then selling it in feminine colorsWilson believed that women would prefer working out in clothes that fit them. So, in addition to fashionable styles, he concentrated on technical elements, including seamless stitching and breathable fabrics. And surprise, surprise: women were willing to pay $100 or more for his company's workout clothes. Lululemon was off and running. Like many smaller companies, executives focused on the product and not so much on the "infrastructure" side of the business (human resources, IT, finance). That works ... up to a point. When the chief information officer was hired, she found it fairly easy to implement the technology she felt was needed because there wasn't really anything in place to work around.

Losing your pose...

One area where former executives felt focus was lacking was in the production area. No rigorous manufacturing model was in place. There were no schedules or deadlines. The company countered that by saying it wanted to remain flexible. But the manufacturing weakness was also evident in the lack of people who had expertise in the technical aspects of clothing manufacturing, such as quality control or control over raw materials. Which brings us to the problem of sheer yoga pantsyoga pants being a core product of the company. As customers began returning the product and as the product complaint rate hit 12 percent, Lululemon had no choice but to pull the pants off the store shelves. The CEO at that time said the pants had passed quality assurance tests but admitted that the only way to quality test the product was to put them on and bend over. And the company had not done that - until it was too late.

Although the company's core business is still women, it is seeing strong growth in men's and girl's businesses. In 2018 it had fully rebounded, and shares hit an all-time high. It is no longer one of the fastest- growing companies, but it is a successful and sustainable one that has certainly learned something about the importance of control!

Questions:

1. What was Lululemon's biggest mistake?
2. What type (or types) of controlfeedforward, concurrent, or feedbackdo you think would have been helpful in this situation at Lululemon? Explain your choice.
3. Which controls would be more important to Lululemon: feedforward, concurrent, or feedback? Explain.