Nike Case Study now

Transcription

Nike Case Study now

Case Study
Nike
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Case Study
Nike
A Marathon, Not a Sprint
Today, Nike is the world’s leading provider of athletic
footwear, apparel, equipment, and accessories for a
wide variety of sports and fitness activities. In 2015, the
company controlled 60 percent of the U.S. market for
all athletic footwear. While it’s hard to imagine Nike as
a tiny startup, this athletic empire began with a single,
innovative pair of running shoes. The mission that has
driven Nike’s innovation is to bring inspiration and
innovation to every athlete* in the world.
*“If you have a body,
you are an athlete.”
—Nike co-founder,
Bill Bowerman
Phil Knight and legendary track coach Bill Bowerman
founded the company as Blue Ribbon Sports (BRS) in
1964. As the story goes, Bowerman used a waffle iron
to cook up a new sole for a pair of running shoes (a
feature that is now a hallmark of Nike designs). It was
the first of many uncommon approaches for addressing
customer needs that have consistently set Nike apart
from the competition. Today, Nike is expanding
its FlyWeave woven sneaker technology to all shoe
categories - setting themselves apart from competitors
once again with its more flexible shoe designs.
Innovation at Nike has always been a driving force,
and company leadership continues to underscore its
importance in everything Nike does today. By aligning
the organization around this clear strategic mission, Nike
has been able to launch brilliant partnerships, overcome
major image setbacks, and consistently release top-notch
products year after year. The secret to Nike’s success
is its ability to treat innovation as a marathon and not a
sprint. The company invests in early stages of emerging
product ideas and then completes the course by running
with partnerships and key consumer groups that help
drive new demand and growth. In 2016, insights from
Nike+ user data will inform new products and services.
The company has been ranked #1 in Fast Company’s
“The World’s Most Innovative Companies of 2013,” and
CEO Mark Parker is Fortune’s 2015 “Businessperson of
the Year.”
Read on to discover some of Nike’s secrets to taking a
long view on innovation, and learn how you can apply
them to your own organization.
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The Four Innovation Capabilities
futurethink’s Innovation Case Studies are designed to provide insights on today’s leading innovators. For each featured
company, we cover four key innovation capabilities: Strategy, Ideas, Process, and Climate.
Set a foundation that defines innovation objectives and mobilizes your efforts.
The notion of “serendipitous innovation” is dangerously outdated. The secret to success lies in
crafting an action-oriented strategy. It means setting a vision for your company to follow, and
viewing innovation as an expected result, not a lucky one. Innovation should be handled like any
business initiative: with an eye on growth, results, and profit.
Think differently to develop original ideas that drive business value.
In today’s economy, the ability to continually fuel innovation is what separates winning
organizations from the rest. Idea generation should be managed, purposeful, and clearly linked to
business objectives. Leading innovators succeed by balancing out-of-the-box thinking with sound
management principles.
Create a streamlined and flexible approach to shepherd innovative ideas to market.
The reality in every organization is that money is limited. To make sure you’re spending effectively,
you must have a streamlined process for innovation. A good process will help to consistently
identify your best projects and enable you to move them forward more efficiently.
Build a thriving work environment that drives innovation across your organization.
We live in a world where the new replaces the old very quickly. Only organizations that keep pace
with the shifting marketplace will be able to sustain an advantage. So how do the best companies
adapt? They cultivate a climate in which employees are encouraged to innovate in a continuous
and consistent manner. The companies that stay ahead have made innovation part of their DNA.
futurethink analysts develop case studies by drawing from a mix of extensive research, by conducting organizational
and customer interviews (where possible), and by experiencing first-hand interactions with the organization. We want
to thank those individuals who contributed to this case study and provided the information found herein, which made
the Nike story so fascinating.
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“Leveraging our portfolio is one way we sustain growth, the other
of course is through innovation. We showed the power of our scale
this quarter as we share technologies from one category to another
and from one brand to another. This is how innovation can create
separation, and this is something only Nike can do.”
—Mark Parker,
President & CEO of Nike
A Vision Driven by Innovation
As Nike President & CEO Mark Parker points out, it’s
often difficult for people to see the potential of innovation
before it happens. To some people, shoes are shoes.
Lacking a clear vision, it’s impossible to understand how
a company built on athletic shoes could ever become as
successful as Nike. But that’s the advantage Nike had:
a clear vision for innovation. And at Nike, innovation is
about more than tweaks to the shoes (though of course,
that’s a big part of it). Innovation is about products and
services. It’s about partnerships. It’s about strategy
and process. It’s about transforming the experience
of the athlete. This clear vision for innovation is well
supported by the company’s leaders, who promote this
strategic imperative by outlining a defined method for
implementing it. Parker uses the word “innovation”
constantly - saying it 21 times on a quarterly conference
call in 2014, and 5 times in a single response to an
analyst’s question – which shows how entrenched it is to
Nike’s philosophy.
At Nike, the innovation process occurs in two ways: at
the business unit level (where each sport group has its
own product development team to come up with new or
incremental ideas) and within a separate group called
the Innovation Kitchen, a team tasked with coming up
with “what’s next.”
The Innovation Kitchen designers, led by Vice President
for Design and Special Products Tinker Hatfield, focus
on special products such as the groundbreaking
(in terms of product and price) Air Jordans and the
FlyKnit—the industry’s first thread-woven sneaker. The
Innovation Kitchen is also the name for the group’s
physical working space at Nike headquarters, cluttered
with unusual elements ranging from violins and Irish
Nike ‘Stat Shot’:
•35: Number of buildings on the Nike campus
near Beaverton, Oregon, named after legendary
U.S. athletes, including John McEnroe, Michael
Jordan, Rory McIlroy, Ken Griffey Jr., and others.
•300+: The number of patents Nike has filed on
average each year since 2007. Their portfolio is
the largest in the foot apparel industry.
•$35: Fee paid to design student Carolyn Davidson
in 1971 for Nike’s original Swoosh design.
•832: Number of Nike retail stores globally.
•62,000: Number of Nike employees globally.
•$30.6 billion: Revenue for the 2015 fiscal year,
up 10 percent vs. previous year.
•$6.6 billion: Direct-to-Consumer sales channel
and projected to reach $16 billion in this category
by 2020.
•$50 billion: Revenue target for 2020
architecture to commissioned artwork and bits of Nike
history. By working in a visually stimulating atmosphere,
these Nike designers find inspiration in the details of
the unexpected. They’re able to corner the market,
rather than have the “Next Best Thing,” thanks to their
“constant dissatisfaction.” Competitors figure out a new
shoe, then build on it, conversely when Nike comes up
with something new and great they’re already working on
seven things that are going to be newer.
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Simply gathering the most creative minds from across an
organization to collaborate in a fun workspace wouldn’t
be nearly as productive without a strong leader setting
guidelines to align the team. Setting clear definitions
of “how to work” gives groups the inspiration they
need, and it lets them know what types of outputs are
expected. Many times, employees need to know that
they have explicit permission to undertake activities that
may not deliver immediate results. At Nike, there are
maxims that are ingrained in employees.
•
It is our nature to innovate.
All About the Athlete
•
Nike is a company.
•
Nike is a brand.
•
Simplify and go.
•
The consumer decides.
•
Be a sponge.
•
Evolve immediately.
Nike focuses its innovation efforts on one goal: serving
the athlete. Because it believes that every person with
a body is an athlete, the company strives to serve all
people at all skill levels, across a wide range of sports.
To that end, Nike’s business is organized by sport, not
product type. There are divisions for soccer, football,
golf, etc. Each division has its own product development
team and these teams work only on products that meet
the performance needs of their particular sport.
•
Do the right thing.
•
Master the fundamentals.
•
We are on the offense—always.
•
Remember the man (the late Bill Bowerman, Nike
co-founder).
Employees know the maxims so well that people joke
that they often quote them like the Ten Commandments.
But it is this unified vision to constantly create, evolve,
and learn that has driven Nike to its success today.
“Nike is the most connected,
authentic, and distinctive
brand in the industry.”
—Charlie Denson,
Former Nike Brand President
As a result, the focus at Nike is on the specific athlete’s
needs, and explicitly designing products to meet them.
This approach lies in stark contrast to many competitors,
who focus on making products that can be applied to as
many customers and businesses as possible.
The Nike Sport Research Lab demonstrates Nike’s
obsession with catering to athletes’ needs. Their
16,000-square-foot facility has state-of-the-art
equipment such as 3D motion capture to collect
data and insights that provide the foundation for
Nike products. Their environmental chambers allow
physiologists to bring the heat of Rio de Janeiro or
the frost of Antarctica to the facility, thereby allowing
products to be created that lower athletes’ body
temperature, or reduce their energy expenditure.
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Nike follows a four-stage process for research and
development. First, researchers work with elite athletes
across sports to understand the demands of their
respective sport, and the environments in which they
train and compete. Then, scientists explore advanced
concepts that would alter performance, protection, and
perceptions for athletes at all skill levels and sports.
Next, the applied research teams divide and conquer, so
they can develop sport-specific innovations. In the final
stage, a group evaluates the product concept against
Nike’s high standard for excellence.
Mike Nurse, Senior Director of the Nike Explore Team
Sport Research Lab, explains that failure is a necessary
part of the innovation work he does. He says, “There
are plenty of examples where we have a good solid
understanding of a particular sport or an athletic
attribute, and we make an educated hypothesis at
what we think might make it better. We build some
prototypes, and more often than not, they don’t make
the athlete better.” Nurse embraces the learning gained
from each failure, and recalls that each misstep leads
the team to a least two new ideas.
An example of this “think like the athlete” approach
is the Nike Mayfly. Nike realized that customers don’t
always know exactly what they need. Connecting with
athletes directly helps designers discern not just their
blatant, stated needs, but their latent ones as well. That’s
how the lightweight Mayfly sneaker was born.
According to Nike engineers, every ounce of weight on a
sneaker adds up to an extra 55 pounds carried per mile
for a runner. In order to address this problem, they came
up with the Mayfly. The sneaker is named for the insect,
which is light, nimble, and lives for only a few minutes.
Like its namesake, the Mayfly sneaker is incredibly
lightweight, just 4.8 ounces, and is only intended for use
up to 100 kilometers before being discarded. How’s that
for targeting a specific need?
Be the Leader Consumers Seek
Nike continually strives to stay ahead of emerging
trends and market developments. One of its goals is
to anticipate the needs of various consumer groups—
not just to respond to them. It does this by expanding
its role in consumers’ lives. Instead of seeing itself as
simply a provider of running shoes, it looked at the entire
act of running and came up with a way to make each
aspect (shoes, music, time, speed, etc.) a more cohesive
experience (see below). In addition, Nike understands
that for many people, their products aren’t simply
functional—they’re an expression of style. Recently,
the company has started establishing brand leadership
in new trends at the intersection of personal data and
services that guide behavior change.
Nike+: When Nike Met Apple. Today, Nike is one of
the most tightly integrated digital and physical product
brands in the world. Treating their investments in digital
as a marathon, not a sprint, has allowed the company
to leverage key partnerships while growing their own
internal capacity to bridge the digital-physical divide.
In 2005, Nike CEO Mark Parker called Apple’s CEO
Steve Jobs with an idea:
synchronize running
shoes with iPods. That
conversation led to Nike+,
a sensor that attaches to
shoes so that runners with
iPods can monitor how far
they’ve gone, how many
calories they’ve burned,
and more. By uploading
their stats to www.
nikeplus.com, runners
can join a community
and see how their performance stacks up against other
runners’.
In late 2008, Nike and Apple expanded the concept,
rolling out Nike+iPod for the Gym, which allows users
to connect with gym cardio machines and record their
workouts directly to their iPods.
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A year later, Apple announced the iPhone 3GS, which
includes built-in Nike+ capabilities. They’ve even
developed specific devices just for Nike+, such as the
Nike+ SportBand watch. Nike+ Running runs on the
Apple Watch, relased in 2015, allowing runners to track
their data on this multi-purposed wearable device.
Nike+ is the world’s largest running club, with more than
28 million members as of November 2015, who had
logged more than 1.2 billion miles collectively. Nike aims
to triple that number and reach 100 million members
worldwide. The company offers two applications to this
audience: Nike+ Run Club and Nike+ Training Club.
The Training Club app featues 135 workouts, available
in 17 languages, while the Run Club app matches
users to running groups in their community. These
communities of runners receive expert guidance from
pacers and coaches in each session. The clubs reinforce
brand loyalty and opportunities to connect runners with
the Nike products they need to meet their goals. They’ve
also added the Nike Trainer’s Hub, a mobile experience
that lets any athlete chat and learn from elite trainers some of which have trained world-class athletes.
Innovative Nike+ features include the ability to set up
and share challenges and running routes, and broadcast
workout successes via social media. In 2015, Nike
diminished its presence in the hardware space by
retiring their wrist wearables, FuelBand’s, and focused
its efforts on becoming a leading provider of fitness
software API’s for wearables. They launched a software
incubator called the FuelLab, to help hardware makers
integrate its fitness measurement system into their
devices. By leaving the hardware manufacturing and
selling to the experts, Nike can leverage its presence on
many more devices to collect and organize consumer
behavior data. Using data about seasonal running
behavior, and location metadata across continents, gives
them product devleopment and marketing insights.
For example, Nike’s AeroReact winter exercise apparel
was derived from customer insights about running in
the winter. Cold temperatures inhibit performance as
the body strives harder to maintain thermal balance.
AeroReact fabric adapts to the runner’s temperature as
the body heats up, which eliminates the need for layers.
Reacting with water vapor, it knows when to engage
active cooling - a process that removes heat from the
body. These products allows athletes to run or exercise
outside 365 days a year, and that means getting more
Nike gear.
Moving forward, Mark Parker plans on digital ecosystem
expansion to amplify consumer loyalty and engagement.
Parker hopes to partner with best-in-class experts
to levergage digital expertise in all areas of the Nike
system, from product development, to supply chain, to
personalized feedback with Nike+ users. Parker credits
the company’s success to its deep relationship with
athletes, one that he knows they need to earn every day.
One way they engage athletes with new product lines is
through innovative marketing. During the “Fastest Day
on Earth” event the company challenged runners to
run their fastest mile ever. At the end of their race, Nike
celebrated each runner’s fastest mile with a personalized
video that included the runner’s name, mile time,
and clips from their route using Google Street View.
This storytelling campaign was a resounding success,
reaching millions across social media.
NIKEiD Studio: Where Consumers Become Designers.
Nike has realized the upside to empowering consumers
with tools to design products appropriate to their needs.
Today the company’s direct-to-consumer business is
$5.3 billion and growing. It began more than a decade
ago, in 1999, when it launched the NIKEiD website
(http://www.nike.com/us/en_us/c/nikeid), where
consumers customized products to their individual
sense of style. With choices on everything from material
type to shoelace color, the possibilities for customization
are endless.
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NIKEiD was a huge success, inspiring Nike to expand
the concept beyond the online world into appointmentonly studios. In these sessions, professional athletes,
celebrities, and other trend influencers could design
limited-edition shoes with the guidance of Nike staff
designers. Then, in 2004, on the fifth floor of Niketown
in New York City, Nike opened the first fully public
NIKEiD Studio. (Now Niketowns around the world
feature NIKEiD Studios.) If any customer isn’t sure about
taking the design plunge alone, Nike design consultants
are on hand to guide them through a 45-minute design
process. NIKEiD is also an example of how digital
innovations can grow into brick-and-mortar retail-driven
growth. Nike exceeded their 2015 direct-to-consumer
revenue goal of $5 billion almost a year earlier than
planned. The growth is driven by e-commerce sales and
new store openings.
NBA Partnership: Starting in 2017, Nike will be the
National Basketball Association’s sole uniform provider
—the first apparel partner to have its logo on all on—
court uniform designs. This eight year deal cost Nike
$1 billion, but will give the brand high profile exposure.
Parker promises to integrate sensor technology that
controls body temperature into the uniforms, building
off the NBA’s aim to improve the game by knowing
everything about the players. In 2014, players on four
NBA teams began wearing small devices that track
fatigue, body temperature, heart rate, and sleep. Nike
will be a tech-apparel partner for the NBA in upcoming
years as they expand behavior and health data tracking
for players—using uniforms as the next wearable
technology.
Tinker Hatfield discusses the Pompidou building as inspiration
Encourage Diverse Approaches
Innovation from Obscure Places: The Air Max. The
Air Max (pictured below) is a perennial bestseller for
Nike. Leading innovators understand that being open
to new things is critical, because you never know when
inspiration will strike like lightning. The Air Max shoe is a
perfect example.
Designed in 1985, when Nike’s revenue was down 75
percent year after year, the Air Max was revolutionary
because it was the first shoe that showed its insides
on the outside—exposing its “air cushion” technology
through a window in the heel. The designer, Tinker
Hatfield (who had previously worked as an architect for
Nike, designing offices and retail locations), was
inspired by the Georges Pompidou building in Paris.
This was a building that basically “showed its guts”—
pipes, elevators, interiors—and made them visible from
the outside, shaking up the world of architecture as a
result. The idea of transparency was to become a major
influence on shoe technology at Nike.
“When you sit down to create
something new, what you do is a
combination of everything you’ve
done and seen in your life.”
—Tinker Hatfield,
Vice President for Design and Special Products, Nike
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It’s essential to create an environment in which people
feel safe enough to do these types of things. If Nike
designers were afraid to push boundaries, they would
never be able to come up with the brilliant concepts that
they do.
In 2012, Nike launched the Flyknit, a shoe so innovative
that it was named one of TIME Magazine’s Best
Inventions. The Nike Flyknit was the industry’s first
thread-woven shoe that has broken from traditional
multi-piece shoe assembly, as the shoe has 35 fewer
pieces to assemble and its upper is machine-woven
from a single-piece of fused yarn.
The Flyknit went through 195 major reiterations,
demonstrating Nike’s approach of running a marathon,
not a sprint, in creating great products. Many of their
early prototypes resembled ballerina slippers until a
team member suggested experimenting with yarn. This
unique manufacturing process yeilds 80% less waste
than a typical Nike design. The innovation required Nike
to develop new tools for designing and making shoes,
rather than simply incrementally innovating around
existing capabilities. The innovation also left room on the
table for further advances.
Nike has expanded its use of knit into running, soccer,
training and basketball, and integrated the Flyknit
within their NikeiD program. The second generation of
this technology, FlyWeave, is designed to be “a bionic
second skin,” and a supportive fit allowing a maximum
natural range of motion for the foot. With computeraided engineering the technique can be tuned to
the demands of very different sports. The FlyWeave
technique is so lucrative, that Nike took the top soccer
cleat-maker spot from competitor Adidas in 2015. In the
future, knitted technology will be in all shoe categories.
Experimentation Is the Game
The City Knife II. Experimentation is critical to
innovation—and this often involves working in new or
unfamiliar territory, as well as allowing for failure.
It’s apparent how important this is when considering
the various tactics Nike uses to spark ideas. In the
Innovation Kitchen, designers often use the “deep
dive” technique to explore possible enhancements and
innovations to existing products. A deep dive is an indepth study of a subject unrelated to athletic gear with
the aim of finding ideas that can be translated to benefit
Nike products.
For example, in an origami deep dive, designers were
taught the ancient art of Japanese paper folding. Then
they applied their learnings to sneaker design. How
could they create shoes that would be collapsible and
easily portable? How could a sneaker be made from
one piece of fabric or rubber to cut down on waste? The
answer to the questions raised at the origami deep dive
was 2009’s City Knife II, a lightweight shoe easy to fold
up and stick in a bag, purse, or pocket.
In 2014, Nike looked outside of their industry to employ
the technology of 3D printing which allowed them to
accelerate customer testing. While Nike was conducting
discovery interviews with football athletes they realized
players make adjustments to their speed and direction
to compensate for how their cleats perform on the turf
(i.e. inproper traction). Using 3D printing, Nike was
able to make mutiple design variations in a matter of
hours, which athletes could then test back to back. This
technology and these insights created the plates used on
the Nike Vapor Carbon 2014 Elite Cleat product.
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Nike started construction on an 125,000 sq ft innovation
lab, the Advanced Product Creation Center, at its
headquarters to “turbo-charge” efforts with 3D printing
and bring corporate closer to the action. Currently, Nike
uses 3D printing in protoyping, and eventually hopes
to bring 3D printing to large-scale manufacturing
- However, they need the right partner first, so for
the time being they plan to use the technology to
produce custom cushioning systems. They envision
future consumers buying a Nike shoe design file,
then 3D printing the shoe themselves (at home or
in neighborhood printing hubs). Thinking futher into
the future of personalized, rapidly-delivered product,
Nike announced a partnership with Flex, a global
manufacturer. This move gives them a more innovative
supply chain and advanced manufacturing - from
experts outside the footwear industry.
In 2015, Nike moved into the realm of 4D technology
(self-assembling parts) with the release of MAG, a shoe
that can lace itself with “power laces” inspired by the
shoes that appear in the cult classic movie, “Back to
the Future.” Without a strong culture that encourages
risk-taking, this sort of exercise would never work inside
Nike.
Innovation in Corporate Responsibility
Like many large corporations, Nike has faced scrutiny
for some of its practices, from environmental policies to
labor issues. Instead of continuing to view this scrutiny
as a hindrance to success, Nike stepped back and
considered how it could transform the attention into an
opportunity for advantage. The company innovated by
bringing greater transparency to the supply chain and a
common set of data standards that could be embraced
by other apparel industry partners. It is now recognized
as a leader in corporate social responsibility, winning
awards for their initiatives. For the latest news and
updates, visit www.nikeresponsibility.com.
In 2012, Nike partnered with Walmart, JCPenney,
and Target to establish an index to measure the
environmental impact of products across their entire
supply chains.
In 2013, CEO Mark Parker highlighted to their
shareholders Nike’s desire to be a catalyst for positive
change in the world. Initiatives include “Designed
to Move,” a campaign to get children active since
physical activity has dropped up to 45 percent in some
countries and “Girl Effect,” a movement to help girls
get out of poverty.
A centerpiece to Nike’s corporate responsibility efforts is
its Nike Sourcing & Manufacturing Sustainability Index
document. Rather than keep the document hidden on
a shelf, the company has embraced the open source
philosophy. Nike partnered with the global problemsolving initiative Random Hacks of Kindness in 2012
to create the Open Challenge for Sustainable Materials.
The contest invited apparel designers and developers to
develop products using sustainable materials listed from
the Nike Sustainable Materials Index.
“We see corporate responsibility
as a catalyst for growth and
innovation. It is an integral part
of how we can use the power of
our brand, the energy and passion
of our people, and the scale of
our business to create meaningful
change.”
—Mark Parker,
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Considered Design. A hallmark of the corporate
responsibility initiative, Nike’s “Considered Design”
ethos challenges designers to use environmentally
preferred materials, reduce waste, create sustainable
manufacturing processes, and use innovation to help
reduce the overall environmental impact. The Making
App shows designers the immediate impact of sourcing
a certain textile or incorporating a specific plastic
material into a shoe or apparel design. Nike’s longterm vision is to design products that are produced
using the fewest possible materials, designed for easy
disassembly, while allowing them to be recycled into
new products or safely returned to nature at the end of
their life.
“We have two favorite questions
at Nike. Is it innovative? Is it
authentic? We’re committed
to building a better product, a
better experience, and a better
world because we know we can
do it in a way that is new and
genuine.”
—Mark Parker,
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Innovation Through Collaboration
Innovation in Marketing
Nike knows that in order to grow inside the company,
you must look outside for new ideas. Getting locked
into a “not invented here” mentality is dangerous, even
if an organization has its own strong pipeline. Fresh
perspectives and new ideas keep the innovation engine
running. No stranger to trying new things, Nike has struck
some extremely innovative partnerships to venture into
new territory beyond traditional sports.
Innovation doesn’t stop with products—it also happens at
the promotional level. Wielding the prestige (and budget)
that Nike does, it’s no surprise that celebrity endorsements
are a huge part of its marketing strategy.
“Ideas are in charge.
And they come from people who
work inside Nike and from people
who work outside Nike.”
—Trevor Edwards,
Nike Brand President
One area that many people have noticed is Nike’s
unexpected launch into the hardware, software, and
services industry. Nike is aware of their digital limitations
and therefore seek to evolve their business through
partnerships. CEO Mark Parker explains, “Now is the
time for big, bold solutions. Incremental change won’t get
us where we need to go fast enough. Innovation is most
powerful when it’s activated by collaboration between
unlikely partners.”
Nike continuously looks to partners to help them reach
their goals, including their ambitious sustainability
objectives. Their partnership with NASA and the U.S.
Department of State to create LAUNCH aims to introduce
innovations to tackle the urgent problems facing society.
The 2013, 2014 and 2015 LAUNCH challenges have
focused on sustainable textile and material innovations.
Submissions including nano imprinted plactic surfaces
and natural fertilizers from residues. Nike began a
partnership with MIT’s Climate CoLab to continue their
work in sustainable materials innovation. Similarly, the
company announced that they plan to reach 100 percent
renewable energy in company-owned or operated facilities
by 2025.
What’s interesting, however, is the way Nike starts with a
celebrity, and then takes things to the next level. Consider
the Air Jordan, quite possibly one of Nike’s most famous
and successful shoes ever - surpassing $2.2 billion in
annual sales. Originally developed for the legendary
basketball player, the shoe’s popularity has long outlasted
his own athletic career and repeatedly sets benchmarks for
performance and design in the industry. Instead of pulling
the brand when Jordan retired, Nike continued to invest in
the innovation that made the shoe such a success.
When the former NBA star turned 50 years old, Nike
celebrated his birthday month with the release of an
additional 13 new Air Jordan sneakers. Nike’s year-long
celebrartion of the 30th anniversary of the Air Jordan
in 2015 kicked off with a dazzling interactive exhibit. It
included an immersive basketball court simulator where
fans could virtually recreate iconic shots from Jordan’s
career, letting their “inner Jordan come out.” The exhibit
also debuted new Air Jordans, and gave guests RFID
bracelets to use to collect their favorite content from the
installation.
In 2015, Nike signed their first lifetime endorsement deal
with LeBron James, an American basketball superstar.
James has been a longtime face for the brand from his first
deal in 2003, to his signature shoes selling $400 million in
2015. This lifetime endorsement solifies James’ loyalty to
the Nike brand. This secure partnership benefit Nike with
the continuation of a successful shoe line, and association
with a highly talented athlete.
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A “Sssh!” Culture
For other companies, secrecy has a negative impact
on company culture, but for Nike, they’ve found a
way to use it to their advantage. At Nike, employees
believe that what they are doing is so valuable that
it is important to protect, creating an atmosphere of
exclusivity and mystery.
Co-founder Bill Bowerman’s waffle iron used to make the
first Nike shoes.
Nike’s Innovation Kitchen is like a historic museum
with reminders on what has helped the company
achieve its success in the past, such as co-founder Bill
Bowerman’s waffle iron that was used to make shoes in
the 1970s. This sense of history and value has a strong
effect on employee culture, elevating Nike to the heights
of Apple and Disney, where employees identify with
their companies with almost cult-like status. At Nike,
it is not unusual for employees to tattoo a “swoosh” on
their legs.
This attitude of mystery and secrecy features in Nike’s
public image as well—employees love being part of the
secret and customers can’t wait to get in on the latest
remarkable innovations as well.
Leadership That Never Sits Still
When examining what makes a company innovative,
it is useful to look at leadership. Nike’s President and
CEO, Mark Parker, has been named “The World’s Most
Creative CEO” by Fast Company and has helped steer
its 62,600 employees to make Nike what it is today.
Despite Nike’s position as being one of the most
innovative companies in the world, Parker is not sitting
back and reveling in its success. He says, “One of my
fears is being this big, slow, constipated, bureaucratic
company that’s happy with its success. Companies
fall apart when their model is so successful that it
stifles thinking that challenges it.” Instead, employees
are encouraged to constantly question things, and it
is this way of thinking that results in the evolution of
successful products and the introduction of new ones.
Parker makes a point of showcasing ideas from
employees at all levels to celebrate that ideas can be
from anywhere. He explains, “There’s real value to
show everyone in the company that you can make a
difference.” Parker’s own career was elevated when
he introduced the Nike Air, a “little side project” that
has driven huge success for the company. Part of
this culture to experiment and innovate is driven by
Parker, who encourages employees to look at everyday
challenges as opportunities to improve, create, and
innovate.
“Nike always tries to improve.
They never say, ‘I’m No. 1, and
I’m happy.’ They always say,
‘How can we get better?’ ”
—Serena Williams,
World Champion tennis player
Their management approach is one that is taken
from the culture of sports. Intuition is strongly used to
determine what will work, and it drives many decisions.
However, in a world where change is frequent and
consumer preferences are fickle, Parker notes that
they don’t always get it right. What they do have is
an attitude of going along with the change (instead of
fighting it), and they oftentimes help accelerate the
change themselves. This has helped Nike become the
flexible, dynamic, and adaptable company it is today.
12
Case Study
Nike
The brand is also already looking ahead to the Olympics
in Tokyo in 2020, and have been studying ancient
Japanese armor to inspire their designs. Nike’s women’s
business is expected to double, rising to $11 billion
in 2020, and will be a focus area for marketing and
product innovation.
What’s Next for Nike?
Innovation continues to be a central business strategy
for Nike. It is an organization that is laser-focused
on continually improving the athlete’s performance,
so expect to see products that incorporate new
technologies and socially responsible materials that
don’t just make a difference on a personal level, but on
a global one as well.
With their shoe products, Nike perceives the knitted
upper as “foundational technology” that will be used in
every product going forward. They have engineers with
doctorates in biomechanics working alongside industrial
designers to expand and deepen this technology. The
lower cost, efficiency, and reduced waste of making
knitted uppers marks a signal for how all shoes will
be designed moving forward and Nike will be at the
forefront of this sustainable shoe movement. The
construction of Nike’s Advanced Product Creation
Center in 2016 marks the company’s commitment to
3D printing in shoe production. Nike makes protoype
designs with additive manufacturing, but plans to use it
in their supply chain in the near future.
Growth in emerging markets will continue to be a
focus for Nike in the years to come. Russia and Brazil
became billion dollar markets in 2015, and they have
an increased focus on reaching $4 billion, their goal
for China. With the Olympics coming up in 2016, Nike
is using the opportunity to increase their presence in
Brazil. Parker is confident about the full pipeline of
products and digitial technology that will debut at the
Games and amplify their brand.
As an example of their efforts to expand into Greater
China, Nike partnered with agency AKQA to build an
LED basketball court in China that has built-in motion
sensors. With these light markings on the court floor,
players can be lead through training sessions, respond
to their mistakes, and see performance statistics in
real time. The gamification of the court experience can
expand interest in the sport and unleash new business
possibilities for Nike. For the past two years, they’ve
used the court as part of the Nike RISE campaign, an
online reality show in which aspiring Chinese basketball
players are mentored by professional NBA players and
vie for a spot in the Nike World Basketball Festival.
Nike is striking innovative partnerships that will help
them get to market faster in the digital space. Moving
forward, Nike will expand its digital ecosystem to amplify
consumer engagement. Parker aims to partner with
best-in-class experts to levergage digital expertise in all
areas of the Nike system, from product development,
to supply chain, to personalized feedback with Nike+
users. Nike will leverage consumer behavior data from
Nike+ to give insights into product development and
timing of marketing efforts.
Nike management continues to reinforce that the
organization is focused on elevating design, accelerating
their innovation agenda, sharpening and improving their
supply chains, and more. At Nike, there is no finish line
to their innovation process. And because of that, the
possibilities for Nike are endless.
13
Case Study
Nike
What Can You Learn from Nike?
Set a foundation that defines innovation objectives and mobilizes your efforts.
Nike’s basis for innovation is to develop customized experiences for the consumer, using
environmentally friendly materials, to help them achieve their specific performance needs.
• What are the guiding principles that define innovation for your organization?
• How can you define innovation in a way that goes beyond mere products and services?
Think differently to develop original ideas that drive business value.
Nike believes ideas can come from anywhere, and that having eclectic skill sets, experiences, and
interactions spur groundbreaking ideas.
• How will you get new ideas and inspiration from outside your organization?
• What are your customers’ unmet, unarticulated needs? How can you delight them and
generate value for your business?
14
Case Study
Nike
Create a streamlined and flexible approach to shepherd innovative ideas to market.
Nike innovates at the business level, while simultaneously incubating fresh thinking at its Innovation
Kitchen.
• How do you ensure that your innovative ideas are successfully implemented?
• What workflows do you have in place to move ideas forward?
• Does innovation have a home in your organization?
Build a thriving work environment that drives innovation across your organization.
Nike’s management encourages uncommon thinking and actively participates in the innovation
process. Being safe is not an option.
• How do leaders in your organization actively participate in innovation?
• How do you encourage smart risk-taking in your organization?
15
Case Study
Nike
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