Long-time Nike CEO Mark Parker has kept the iconic sportswear brand stocked with design talent, he’s encouraged environmental sustainability in new products and, along the way, has become one of the highest paid CEOs in the world. Now, following the recent announcement in March that several very prominent male executives are leaving Nike because of allegations of inappropriate behavior, Parker faces a once-in-a-career opportunity: Reinventing the brand’s culture for the next generation of success.
This doesn’t mean starting from zero and tearing down what is in many ways a remarkable company. Instead, Parker can succeed by using Nike’s existing strengths to transform a pro-bro environment into a culture where the best ideas win. Here’s how:
1. Start with what Nike is doing right
Nike’s brand is synonymous with innovation. The company invests heavily in a corporate team of more than 1000 employees dedicated to innovation. But perhaps more important is Nike’s well-known innovation accelerator, which has an organizational approach unique for a company of its size and scale.
The typical corporate innovation brainstorming session goes something like this: Everyone is encouraged to put all their ideas in front of the room. People are told that there are no bad ideas. The group then votes on its favorite ideas with sticky dots or a group discussion. When the session ends, the result is maybe five to ten new ideas to be researched further with real data. So while there may be no bad ideas, all the other, potentially good ideas from the session are usually forgotten.
Nike’s innovation process is not as reliant as some others on groupthink and consensus. Noah Murphy-Reinhertz, a designer and sustainability leader who works at the heart of the innovation accelerator, explains that Nike’s approach to innovation is an extension of its core business. Designers go out and talk to athletes to see what is working with prototype products at every stage of the process. Nike is programmed to create products for exceptional athletes who succeed because of individual perseverance.
Likewise, the company allows anyone on the innovation team to persevere individually. Employees can pursue a new idea even if everyone else on the team pooh-poohs it. Designers are even encouraged to try again if their idea is not initially met with enthusiasm. In short, Nike’s ability to innovate emanates not from a huge R&D budget within a traditional organizational structure but from an innovation culture that values the performance of the exceptional individual.
2. Take a clear-eyed look at what is working less well
There is, however, a downside to cultures that promote individual performance and freedom above everything else. In such organizations, power flows through informal relationships rather than through a formal structure. Leaders are free and unchecked to give power to those whom they like and trust. More often than not, leaders hire and promote employees who are more like them. Even if unintentional, this informal relationship-based culture means that the majority white, male leaders end up promoting the next generation of white, male leadership. There is less accountability to hold leaders to standards of equitable treatment of all employees. It is much harder to counterbalance the tendency for leadership decisions and behaviors to be influenced by gender and racial biases. The end result is that the best employees may be held back by their gender, ethnicity, race, sexual orientation and so on.
This situation is also troublesome for innovation. If power is distributed in an uneven and subjective way, based more on informal relationships than on clear accountabilities, then all the good ideas that people have may not bubble up, let alone get invested in. And the good ideas that do surface may not be able to travel quickly around the organization when they need to, because the necessary connection points, among product teams, regional teams and market teams have not been established. For all its successes, a culture like Nike’s is not designed to consistently enable the best ideas to win.
Nike’s culture did allow several female employees (or perhaps they just got fed up enough) to take it upon themselves to quietly conduct a survey on inappropriate behavior and pay equity. That survey must have produced concerning results because CEO Mark Parker subsequently initiated an internal investigation. Since then, Parker has challenged his male employees at a large meeting at headquarters in March to create an environment of gender equity. But he should also use Nike’s culture of individual initiative and perseverance to solve the problem.
Between the survey and the investigation, Nike must have enough data to generate some good ideas about what is not working well in its culture. If Nike plays to its strengths, Parker will share those findings with his teams. Then he will let them innovate solutions to their internal problems the same way they developed the two-hour marathoner Vaporfly Elite or the color-changing Air Fly 1. Instead of introducing changes that make Nike more like most other companies, the company can continue its culture of innovation in a radically new way. It can let the best ideas surface for fixing organizational and cultural problems surface. If successful, Nike would become a beacon to the rest of corporate America, showing other companies how to pioneer a new code of conduct for the high-performing, post-#MeToo workplace.
This would be Parker’s biggest innovation. Although Nike is a leader, lots of companies innovate on product design. Very few empower multiple internal teams to take existing data and develop hypotheses about the root causes of their leadership and culture breakdowns. Parker should then let the teams go and collect additional data within the company (and perhaps outside of it) to test these hypotheses. The goal would be to come up with a handful of primary causes—not everything and the kitchen sink—and then to share what they learn with the rest of the company.
3. Design a culture where the best ideas win
The most innovative companies are those truly committed to the leadership and organizational practices that allow the best ideas to win. These are the same practices that would allow a company like Nike to build a culture of innovation, accountability and equity. And these are not mutually exclusive; in fact, they support each other.
One of the added benefits of investing in more effective leadership practices is that it would introduce more disciplined behaviors to Nike’s leadership, so individuals would be less easily influenced by gender and racial biases, and inappropriate behaviors that don’t belong in the workplace would be better kept in check.
When leaders treat people fairly and consistently, according to job role and a clear set of priorities and performance metrics, it also reduces the risk of falling into the habit of treating people according to the leader’s subjective feelings about employees. This also empowers employees to act on the accountabilities of their role, rather than having some people feeling very empowered by their relationships with leaders, while others wait around for approval and permission.
When an organization is optimally designed for innovation, it means that good ideas can surface from anyone and circulate rapidly from any given point in the organization. People are then empowered to investigate new ideas and give voice to them. Then, when a good idea develops legs, a network of connection points will already have been established, both across different groups and up and down different levels of the company.
If Nike does all these things, it will be well-positioned to become a next-generation leader.