At times, Nike's dominance in the sportswear firmament seems entrenched, but to talk to the company's CEO Mark Parker -- as the Wall Street Journal recently did -- is to discover that the brand's position at the top of the heap is at the mercy of numerous variables. The 60-year-old joined Nike soon after college, pursuing an interest in design spurred on by his desire to create a better running shoe (a narrative that echoes legendary Nike co-founder Bill Bowerman). In 2006, he became the company's third CEO, and quickly discovered that his job was to synthesize all matter of operational considerations -- cost pressures, public relations issues, the management of multimillion-dollar endorsement deals with marquee athletes -- while dealing with big-picture questions, like negotiating short-term results over long-term innovation. Parker is philosophical about the push and pull dynamic:
It’s kind of like choreography. You run into ‘us versus them,’ and people saying, ‘I have a better idea’ or ‘Not invented in this department, so no.’ Innovation is the center of our culture, so we can deal with those things pretty effectively and naturally through that lens. But it’s always a balancing act. There is this magnetic pull to focus more on the short term, the immediate, the quarter-to-quarter. And then there’s a sense of, f— that, we are going to go out here and really create the future. And we need to do both. I have to live that tension.
It there's one threat to Nike's outsize success, it is, paradoxically, its size. The Swoosh commands over $30 billion in annual sales and employs over 70,000 workers globally. Even as a company that's predicated on innovation, there's the danger that Nike could become the victim of a glib fashion industry adage that says "Size is the enemy of cool." Parker, who's been directly involved in the design of almost every iconic sneaker that Nike has ever made, still places a premium on the space to be a "wacky creative, to go off and not have any regard for commercial sensibility. And I think that's OK sometimes. You have to untie those limitations and let it fly and then see where it goes." That free-flowing sensibility, he believes, is what prevents Nike's workplace culture to become stale and hidebound.
You don’t want to be having a conversation or an idea tethered to a brief that is all about volume and commercials…. [I]f there is something truly out there and game changing and it’s going to disrupt much of our current formula or approach, people can become quite uncomfortable, and that’s a trap. One of my biggest sources of angst is having people so comfortable with a formula that works that they are not challenging themselves or their ideas.”
It's an approach that has allowed Nike to flourish. Since Parker took over as CEO in 2006, total annual revenue has doubled, from $15 billion to $30.6 billion, and the company's share price has gone up from $21 in January 2006, to $125 in early October of this year. Check out the full article here.