Kyle Richardson
11/6/09
MGMT 410
Research Paper # 2
Nike CEO Research Paper
“Change is the law of life.”(John F. Kennedy) This quote demonstrates how change is imminent
in life and if progress is desired, then so is change. Change is something that every organization needs
to grow but usually hesitates or looks down upon when faced with it. Change is a necessity for a
company to keep up with industry leaders or to become an industry leader. If a company is not making
an effort to change in specific areas of an organization, then that company is essentially moving
backwards in the industry. There is always room for improvement and if our company doesn’t make the
improvement, then one of our competitors probably will. Nike is the world’s leader in footwear and
athletic apparel and ranked 136th on the Fortune 500 Company list in 2009. As the incoming CEO in
January, I am stepping in to a very proven company that has incredible brand recognition and marketing
abilities. Change is what was centered in my mind, as well as, Nike’s when a new CEO was needed
starting in 2010. As Nike’s new CEO in January 2010, there are many items on my agenda that I plan to
address in the first 60 days of office. A brief overview of some of the changes I plan to make starts with
assessing the different organizations within Nike and the subsidiary companies and discussing with the
Vice Presidents of each organization. I will also implement new ideas for corporate Nike and its
subsidiary companies to promote growth and revenue. Finally, I will look to make an immediate impact
changing the reputation of Nike’s labor practices, which have been a topic of controversy in the past.
My first couple of weeks at Nike will include talking with all the VP’s of each organization to see
where they currently stand, what initiatives they are taking and where they would like to be in the
future. By talking with these people, I will be able to start forming relationships and set the atmosphere
of the company. I will look at the turnover rate of product lines across all the organizations and
subsidiary companies to see where I should focus my attention. I will also put an honest effort toward
reaching out to all Nike employees to show that I am approachable and care about each employee (ie,
company meetings) Putting a big emphasis on learning and positive environment in order to keep
employees motivated during this time of change will be a key component. I will carry this environment
into the subsidiary companies as well trying to create an overall image of Nike and a goal to get the
company back on the top 100 companies to work for that Nike slipped out of in 2009. I would focus
much of my initial time and energy on Cole Haan, Nike Golf, and Umbro because those three
subsidiaries were affected the most by the economic downturn. Reinforcing these companies with good
marketing tactics demonstrating the good quality and affordability will go a long way in turning these
companies back towards the goals each company set. Besides assessing where each Nike department is
currently and helping the struggling Nike brands, I will focus on going after some big initiative that will
help Nike grow.
Nike currently has seven key markets: Brazil, China, India, Japan, Russia, U.K. and U.S. which are
doing well, but I want to reach out into untapped markets where people have recently started wearing
shoes. I will focus on selling low end model shoes to people in these markets to create brand
recognition for Nike and then as the countries develop, higher end products will be offered. I also
realize that the economy is starting to turn around, so reaching out to these new markets will create
new jobs that can be offered to those 1,750 Nike employees that were laid off this past year. These new
markets will also help our current overall revenue of $19 million in 2009 to our goal of $23 million by
2011.
Another initiative that I will establish within Nike’s corporate offices is a new employee network
group. Nike currently has many employee networks for diverse employees, but I would like to create a
New Hire/ Intern Network where recently hired employees from Nike offices around the world can
create relationships and share experiences. This network will help new hires become more comfortable
in their new environment while sharing ideas with other employees in common roles, age, etc. that they
may not be comfortable telling their supervisors. Helping the new employees find comfort and feel a
sense of family at Nike will help increase productivity of these employees quicker and hopefully retain
their skills for many years to come. The new network would also have workshops and learning
programs that will help the new employees grow as a Nike employee because the new employees are
our future.
My third initiative in the first 60 days of office will involve creating more contests for the public
to design the graphics of one of Nike’s several star athletes. If Nike can do this across many different
star athletes in their respective sports, it will create a stronger loyalty to the Nike brand and also cut
down on design costs for certain models. The winner of each model design would have an incentive to
create the best designed shoe because they would be given a meet and greet with the athlete they
designed the shoe for and tickets to a game to watch that athlete.
My final initiative will involve increasing shareholder earnings which was lowered dramatically in
the last year. As Nike continues to rebound and increase quarterly revenue from the new emerging
markets, contests and cost reduction, I will be able to start increasing the earnings per share. The total
return to investors decreased by 19% in 2009 from 2008 and that is unacceptable. Part of my
commitment to Nike is a commitment to our shareholders who deserve to profit when our company
profits. We will rebuild our strong reputation with our shareholders who stuck with us through this
tough economic time and they will be rewarded for that loyalty. With these initiatives, the company
should have a good chance at growth by cutting the costs and building brand recognition and loyalty in
new emerging markets of the world.
Not only am I planning on moving to new regions of the world, but I am committed to rebuilding
one of the current regions that Nike already exists in that has been a center of controversy in the past.
The Southeast Asian region is home to many Nike shoe factories because of the abundant amount of
labor resources available. Nike has been hammered by public rights activists in the past for low working
wages and poor working conditions and that is where I will focus the rest of my first 90 days. I know
repairing the image of Nike and its Southeast Asian workers will take much longer than 60 days, but this
is an important responsibility I feel must be addressed early on in my tenure at Nike. I plan to cut some
of the advertising and marketing of the highest revenue models that I am confident will still sell and set
a standard for footwear and move the saved expenses to the Southeast Asian workers. I will increase
every workers salary by a couple of dollars so they don’t have to work 40 hours of overtime a week just
to survive. Another portion of that money will be put toward making the working conditions better
which will result in more productivity during work hours. With the increase wages and better
conditions, the employees should be more efficient and not have to work as many overtime hours. The
new initiative in Southeast Asia should help repair the Nike human rights image and hopefully result in
more Nike employees that will want to work for Nike in Asia. With the repaired image, Nike should be
able to attract new customers that were simply not buying Nike shoes because of the human rights
issues in Southeast Asia. Loyalty and brand recognition is always going to be high at Nike because of the
companies historic past, but any little improvement in public image will only help sales and revenue.
I know I have proposed many ideas, some big and some small, but I feel that with the resources
available at Nike and the support of the employees, these are realistic goals that can be accomplished
during my time as CEO of Nike. As my initiatives become reality and start being implemented, new ideas
and initiatives will be created to keep Nike constantly changing and moving forward. I plan on keeping
Nike an industry leader and increasing the gap to our nearest competitor through many hours of hard
work and motivating the people around me to be as motivated as I am to make Nike the most
innovative company in the world. The only way Nike can be innovative is through change and as John F.
Kennedy’s quote says, “Change is the law that will always be there throughout everyone’s life and we
must encourage and embrace change because it is going to happen, so why not be the people making
change happen.”