Authentic culture essential for Nike

07 November 2012

NEW YORK: Nike, the apparel and footwear giant, is aiming to reflect the "culture of sports" in everything from its management style to innovation, and thus more successfully engage consumers.

Mark Parker, the firm's CEO, told Fast Company in an interview: "Our management approach hasn't come from studying and reading business books. It's more intuitive, from the culture of sports. We're constantly looking for ways to improve."

From conducting scientific research with athletes to examining emerging trends by understanding fields like street art, Nike has sought to gain in-depth knowledge of its core customer.

"We're a big global brand, we have great resources. We break the business into definable subsets based on different consumer cultures and go deep, to be meaningful and relevant to them," Parker said.

In evidence of the rigorous approach being pursued, Parker has adopted a model he calls "edit and amplify", or focusing on core goals and criteria. For example, Nike reduced the number of R&D schemes it was working on from 350 to just 50 earlier this year.

"The ability to edit and amplify is so critical," he said. "There's a real discipline to this. It's going to sound bureaucratic, but it's not. There's a difference between discipline and bureaucracy ... At Nike, we have incredibly strong people. They know what to do."

In demonstration of its flexibility, Nike has created a new method of making its shoes, known as FlyKnit, via which they are sewn from thread rather than cut from fabric.

"If we said, okay, we have the formula for design and manufacturing footwear – that's a myopic and short-term view," Parker said. “One of the challenges of innovation is challenging a set model."

Moreover, Nike Air, which has a visible air cushion, and the company's range of Free footwear mimicking the effect of running barefoot, both began as "side projects" that went on to be major hits.

“You don't need to be here four or five years to have great ideas heard," Parker said. "In many cases, things that happened off the grid have become a massive success.

"Ideas may come from the bottom up but the direction and support can go top-down ... That ratio, top-down to bubble-up, will shift based on situations. I'm a big believer that there's no one single approach."

The rise of digital tools are also providing new possibilities for the company when it comes to R&D, as they connect diverse groups of employees from different departments and geographies.

"The biggest sources of opportunity are collaboration and partnership," Parker said. "And today, with digital communication, there is more of that everywhere. We need to expose ourselves to that as a matter of doing business."

Data sourced from Fast Company; additional content by Warc staff