What Is the Core of NIKE's Philosophy? We Believe in Potential
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Q: A: What is the core of NIKE’s We believe in potential, not philosophy? limits. The 4-minute mile was safe, until Roger Bannister. Lou Gehrig’s 2,130 straight games was safe, until Cal Ripken. No one would ever clear 29 feet in the long jump, until Bob Beamon. Nobody would ever beat Bob Beamon, until Michael Powell. That’s how it is with NIKE. We believe. Mark Parker President and Chief Executive Officer, NIKE, Inc. ON GROWTH . represent a more diversified This is really about maximizing business as part of an optimi- on the best opportunities for And we have a lot of both. So our mission is to take the How much more can NIKE grow? portfolio, and they help keep the our supply chain efficiencies zation plan, making sure we the company. There’s just a deep competitive things we do best and share I don’t believe in limits, but I NIKE brand focused, allowing and minimizing costs. Since leverage our resources, manage fire that makes us try to be a them with the world and, hope- believe in goals. Our goal is to us to develop new business op- 2001 we’ve had nine successful our costs, and invest wisely in What should shareholders leader in everything we do. fully, inspire and enable individ- reach $23 billion in revenue by portunities where we don’t want supply chain implementations. growth opportunities. understand about NIKE? uals to reach their potential. fiscal year 2011, and I’d say we’re the NIKE brand to go. There is That helps us better manage I think as a shareholder you ON NIKE . well on our way. also a lot of opportunity for forecasting and inventory. What role will acquisitions play should look at NIKE and ask NIKE’s mission statement is to What makes NIKE different? complementary growth across There’s a lot we do to manage in the NIKE growth plan? yourself, Are they really focused bring inspiration and innovation I think there are a few things I Seventy-five percent of that the portfolio through sharing product costs — lean manufac- We are always looking for ways on the right things? Is the product to every athlete in the world. see everyday that really set us growth will come from the NIKE resources and efficiencies. turing, raw materials consolidation, to expand our growth potential, innovative and compelling? What does that mean to you? apart. First, we’re innovators by brand. The strength of the NIKE making sure we optimize our but within certain principles. Is the consumer experience rich I think sports is a healthy and nature. We’re fixated, obsessed brand is our most valuable asset. In fiscal 07 the NIKE subsidiaries SKU management, focusing We ask a lot of tough questions. and relevant? Are we being a positive expression of our by innovation. I think that NIKE It’s intangible, it doesn’t show up grew revenue 16 percent to on the most profitable styles. responsible corporate citizen human nature. We’re competi- represents a passion and an on the balance sheet, but really reach $2.3 billion. We saw record We’re also ramping up our “Does it improve our ability to in the world? Are we completely tive, we’re physical, we’re insatiable appetite to go deeper it’s our most valuable asset. revenues and PTI for Converse digital samples and 3-D model- grow existing businesses?” focused on the consumer? drawn to challenges. We like with an athlete within sports and Hurley, record revenue ing to reduce costs in product When the answer is yes, we to achieve things on a personal and to take those insights and We see tremendous opportunity for Cole Haan, and record PTI development. There is a buy a company like Impact Golf And that’s really what our job is level, and we like being part translate those creatively into in both established and emerg- for NIKE Bauer Hockey. Over the lot of discipline around the Technologies, which allowed us — to make sure that we’re clear of teams that share a passion innovative concepts and prod- ing markets around the world. last five years, the subsidiary company on becoming leaner to become the leading innovator about our potential. Kind of like and a common goal. ucts and stories. In the U.S. revenues grew seven brands have more than doubled and stronger. in golf club design. percent in fiscal 07. NIKE is the their revenue contribution. To me sports, at its best, We have incredibly wide pe- fastest growing running brand The second big lever we pull We ask, “Does it expand our is a noble part of the human ripheral vision, the ability to see in Germany. In Russia we’ve To see the potential of the sub- to create value is cash deploy- consumer base within our culture There’s a lot of pride at NIKE experience. and be inspired by things that doubled revenue in the last sidiaries, you just have to look ment. We target a dividend of sports?” When the answer ... our intentions, our influence, happen in sports, but also in film three years. We’re the No. 1 at Converse. Revenue increased payout between 20 and 30 is yes, we buy a company like NIKE is a part of that experience. and music and digital technol- athletic brand in China, a market 23 percent, and PTI increased percent of our trailing 12-month Converse, which is delivering our results are all really very We’re athletes, so we under- ogy — everything in youth we expect to be our second 133 percent. In fact, Q4 was the EPS. Since 2003, we’ve raised tremendous growth by evolving stand sports and what athletes culture around the world. We’re largest within three years. biggest global sales quarter ever our dividend payout from 20 franchise concepts like the Chuck positive. But that doesn’t need to compete. We’re inno- incredibly curious, but we’re also for Converse. to 24 percent. I’m proud of our Taylor, and by creating new ideas vators, so we’re able to create incredibly focused. Our promise is to deliver con- performance there. in footwear and apparel that mean we are satisfied. products that enhance perfor- sistent, profitable growth over And next year is the 100th an- resonate with young consumers mance. And we’re passionate We continually challenge our- the long term — high single-digit niversary of Converse, so we’re We also return cash to share- all over the world. an athlete. We’re actually made about what we do. selves to be better. There’s a lot revenue growth and mid-teens busy cooking up some special holders in the form of share up of a lot of athletes, and I think of pride at NIKE. We believe in EPS. Since we introduced this concepts to celebrate the cen- repurchases. We’ve increased We ask, “Does it give us entry that permeates our culture. NIKE There’s also an asterisk in our what we do. We are a youthful growth model in 2001, we’ve tennial of the brand. our share repurchases in each into new consumer cultures has tremendous resources, but mission statement — “If you and a premium brand. Our inten- generated a revenue CAGR of of the last three years and have that can benefit from the cross- we have even more opportuni- have a body, you’re an athlete.” tions, our influence, our results nine percent, grown EPS at 18 How do you convert revenue finished our last two programs over of NIKE technology?” ties. So we have to make sure That’s actually a quote from Bill are all really very positive. percent, and seen ROIC grow growth into value for your well ahead of schedule. We are When the answer is yes, we buy we are making the most of both. Bowerman. He was the legend- But that doesn’t mean that we from 14 to 22 percent. In other shareholders? currently buying shares under a a company like Cole Haan, which And that requires a superior ary track coach at University are satisfied. words, we’re keeping our promise. For growth to be good, it has to $3 billion, four-year, repurchase uses NIKE Air to redefine the management team, which we of Oregon, and co-founder of be profitable and sustainable. program approved in June 2006, concept of comfort in fashion have. We have the best team the company. That asterisk How do you keep a $16 billion What strengths do the NIKE There are two big levers we pull and we’re well on our way to footwear. in the business. Every leader at means a lot at NIKE. It speaks company fast and nimble? subsidiaries contribute to your to drive health and value into completing that program on or NIKE brings a unique point of to the removal of barriers, the To stay quick and nimble, growth plan? the business. ahead of schedule. This is the benefit of a strong view to the table. Consensus refusal to accept the limitations you have to organize against Our subsidiaries are critical to balance sheet, being able to ag- is important, but not nearly as of others, the right for every- specific opportunities and em- NIKE reaching its potential. They The first is operational excellence. I look at every part of the gressively investigate and act powerful as ideas and debate. body to play and to compete. power people to attack those opportunities. There are some vertically oriented and connect- who takes their competition runners approach training — What is your approach to What’s most inspiring for me outside the product realm.