Nike 2007 Annual Report Download - page 9

opportunities. There are some
great examples of that at NIKE
— NIKE Golf, the Jordan Brand,
NIKE Skate.
NIKE Golf is now the No. 1 golf
apparel company in the world.
We’re in the top three brands
for drivers. We nished the
2006 PGA Tour with the most
wins in drivers, irons, fairway
woods and wedges. On the
year, revenue from NIKE
Golf grew 12 percent to over
$600 million, and grew pre-tax
income over 30 percent.
NIKE Golf performs at this
level because they are totally
immersed in the world of
their consumers. They have
a complete view of the NIKE
Golf experience, from product
creation all the way through
presentation at retail. If you
could visit the NIKE Golf group,
you’d know what I mean. Every
image you see, every conversa-
tion you hear is all about golf.
They talk it, wear it, walk it, play
it, they live it. And it shows.
The same is true for NIKE Skate
and the Jordan Brand, they are
culturally deep and specic,
and set up to capitalize on that.
We looked at that model and
saw tremendous potential for
the rest of the brand. So, we
organized the company into six
key categories — basketball,
running, soccer, men’s training,
women’s training and sports-
wear. These categories are,
in essence, thinking and acting
like individual companies,
vertically oriented and connect-
ing with consumers on a very
deep and meaningful level.
It allows us to be much more
surgical and opportunistic in
every aspect of each business
— product design, demand
creation, retail presentation,
how we communicate. It really
combines the best of NIKE’s na-
ture — to be bold and fast and
aggressive — with the power
and leverage of NIKE resources
and efciencies across the
categories. That’s a huge com-
petitive advantage for us.
Athlete endorsement costs
continue to rise. Are they still
worth it?
Absolutely. Athletes, at their
best, represent some of our
most noble characteristics —
passion, commitment, competi-
tive re, being part of a team,
the ability to overcome adversi-
ty. To me athletes and sports are
synonymous in that way. They
are representatives of universal
values that transcend borders
and unite cultures.
When we help athletes reach
their potential, that process
helps NIKE and consumers reach
theirs. So, have athletes lost
relevance for NIKE and its con-
sumers? No. Are we changing
the way athletes contribute to
the NIKE story? Yes.
Which competitor do you
fear most?
I don’t fear any competitor,
but I respect them all. Anybody
who takes their competition
for granted ends up watching
them from behind.
That said, NIKE is not a reaction-
ary company. The gap between
NIKE and the competition is
smaller than the gap between
NIKE and its potential. That’s
where we spend our time
— developing and leveraging
our resources to maximize
our potential.
ON CHANGE . . .
How is NIKE contributing to
the digital revolution?
Digital connectivity has changed
everything, and that change is
just beginning. The rise of social
networks, the connection of
communities and cultures, the
ability to access and share
information and content is creat-
ing a whole new generation
of opportunity. NIKE is taking
advantage of that opportunity.
Unlike some companies, we
don’t fear the digital world. We
embrace it, and we’re playing
a role in helping to drive some
of that change.
It allows us to connect more
surgically with people and
markets around the world.
It helps us share ideas, build
communities, tell stories —
to be more immediate and
more relevant with more
consumers.
We’re also able to integrate
the digital world with the
physical world. NIKE+ has fun-
damentally changed the way
runners approach training —
using the iPod and the Inter-
net to track and share your
performance and connect with
a global community. That’s
entirely new. We knew we were
onto something big with NIKE+,
but it has succeeded beyond
any of our expectations. And
we see new opportunities
everyday to expand that con-
nection between the physical
and the digital world.
What are the big opportunities
in retail?
Our industry is playing a lot of
catch-up at retail. If you look at
sports specialty, for example,
it’s tough to tell one store from
another, or one mall from the
next. What kind of choice does
that offer the consumer? So
we’re focused on three things
that will lead change in retail.
First, we’re working with our
retail partners to create new ex-
pressions for the NIKE brand and
for their stores. The more innova-
tive presentation we can bring
to our athletic specialty partners,
the more differentiated and
compelling their stores will be.
We’re also developing NIKE-
owned store concepts that will
connect with consumers at the
category and brand level in ways
I think no other company can do.
And we’re expanding our online
presence. This is a tremendous
opportunity for NIKE that we
have not successfully devel-
oped, and that’s changing.
What is your approach to
Corporate Responsibility?
We’re focusing on four
areas — labor, climate change,
environmental design, and
the community. It’s all in our new
Corporate Responsibility report,
which is available online at
www.nikeresponsibility.com.
First, we’re working to help
bring about systemic change
to benet workers and fac-
tory conditions in the supply
chain — eliminating excessive
overtime, converting to lean
manufacturing, and supporting
workers’ right to Freedom of
Association.
Second, we’re acting on the need
to address climate change —
reducing our CO2 emissions and
moving toward carbon neutrality.
Third, we’re aggressively innovat-
ing around environmental design.
Our Considered Design ethos
creates product that is better for
the athlete and the planet.
Fourth, we believe that sports
can change a young person’s
life. Let Me Play is a program to
help ensure that every young
person has access to sports.
What’s most inspiring for me
is that CR is not some adjunct
cost of business at NIKE. CR is
demonstrating an increasing
return on investment. It’s a
chance for us to apply our in-
novation and creativity to help
build a better world. And it’s
being driven by and embraced
by employees.
ON THE JOB . . .
What is your job?
I love my job. I grew up in this
company. I’ve been here almost
30 years. I’ve seen the best
athletes compete all over the
world. And for all the time I’ve
been here, I’ve worked shoulder
to shoulder with the brightest,
the most creative people in
the industry.
I am incredibly grateful for my
history with NIKE, but I don’t
dwell on it. NIKE is a company
that is always looking to the
future. I believe that human po-
tential is unlimited. So, I believe
that NIKE’s potential is unlim-
ited. And my job is to make sure
that NIKE and our consumers
keep growing.
You started as a designer.
Do you miss that?
No, because I’m still very
engaged in design. But I want
to make a distinction here.
Design is not merely a func-
tion at NIKE. Design is a way of
looking at the world and seeing
problems and solutions that
others can’t see. In fact, I would
broaden the denition of design
to include systems and processes
outside the product realm.
In the end, great design is about
enhancing the human experi-
ence. In that sense, it’s the job
of every NIKE employee to be
a designer.
I still draw shoes, by the way, but
these days it’s more for therapy
than it is for production.
What is your working relation-
ship with Phil?
Everybody works for somebody,
and I’m glad to work for Phil.
We have a long history together,
and we’ve developed a lot of
mutual respect and trust. He
gives me a lot of support and
freedom in my job, and I thrive
on that.
Phil is a tremendous source of
inspiration. He really represents
the values that dene NIKE,
and I share those same values,
as do the 30,000 people who
work here.
Design is a way of looking at
the world and seeing problems
and solutions that others
can’t see.