Leading Others: Leadership Review
Length: three pages maximum, double spaced – APA style required for all citations and references
Read the attached case about NIKE, a worldwide sporting goods retailer.
Analyze Mark Parker’s leadership style and determine whether or not he is an effective leader for the organization.
Support your thinking with concepts from the course readings and discussions and link them to examples from the case.
Nike CEO Mark Parker and His Executive Team
Impress Shareholders and Analysts
In late 2004, when Nike was looking to fill the CEO position after Phil Knight offered to step down, Mark Parker, a seasoned 27-year veteran of the company, was passed on in favor of William Perez, an outsider. Many at the time quietly wondered if Mr. Knight’s action was an indication that he was not confident in the leadership abilities of Mark Parker. Then in 2006, just 13 months into the job, Phil Knight and the rest of the Nike board decided to replace Perez with Mark Parker. Why Mr. Parker was passed on in the first place was baffling to some because of his past track record at Nike. Parker, 54, joined Nike in 1979 and had served in various departments including: marketing, manufacturing, research, design and brand management. He was widely recognized as the product visionary for the Nike Air franchise and many other industry-leading product design and performance innovations. Mr. Parker was appointed divisional Vice President in charge of development in 1987, corporate Vice President in 1989, General Manager in 1993, Vice President of Global Footwear in 1998, and President of the NIKE Brand in 2001. Even Phil Knight described him as an experienced, talented executive who had played an instrumental role in building and making the Nike brand as strong as it is today. So why was he not selected in the first place was the question many people had in mind.
Given the way Mr. Parker came to the job, there has been interest in how well he will perform as CEO. It is worth looking back to see how Mr. Parker has defied the odds and surprised those who doubted his readiness for the job in the first place.
Since assuming the role of CEO of Nike, Parker’s team has overhauled the way Nike runs, shifting the brand away from the previous sub-brand and product-based structure to a customer-driven structure. He has structured Nike into six “customer-focused” categories, such as running, basketball, and women’s fitness. Parker has personally shaped Nike’s innovation processes. For example even before becoming CEO, he established a group for pursuing long-range innovation, called Explore. He described Explore as a multidisciplinary group pursuing “deep space” innovation possibilities with academics, inventors, and other companies. Explore, he pointed out, was chiefly responsible for the cooperation with Steve Jobs and Apple that led to the launch of the Nike Plus program in 2006. The Nike + iPod was a wireless system that allowed Nike + footwear to communicate with your iPod Nano to connect you to the ultimate personal running and workout experience. According to most analysts, Parker’s biggest strength is his ability to key into consumer trends.
Mark Parker took the helm of Nike at a time when the stakes in the U.S. market were particularly high, especially as Adidas was becoming more powerful with the acquisition of Reebok. Parker said at the time that he believed he was he right person to lead Nike through the challenges of the future. He said it was his job to help carry the torch into the future. He has always maintained that all Nike employees work for one boss – the consumer.
Nike has what it calls “Nike Sustainable Business + Innovation” program. Nike believes it can use the power of its brand, the energy and passion of its people, and the scale of its business to create meaningful change. Nike believes the opportunity is greater than ever for sustainable principles and practices to deliver business returns and create a positive social and environmental impact in the world.
Parker isn’t an attention-seeking sort of CEO, so until now it has been hard to get a sense of him. But, the imprint he is making as CEO is turning out to be as meaningful as his design work. Putting his stamp on Nike as forcefully as the much splashier cofounder Phil Knight did, Parker has reorganized the company into units based on particular sports, “a conscious decision to sharpen each piece of the business so we’re not some big, fat, dumb company,” he says; reshuffled its regions to put new emphasis on China and Japan; streamlined the reporting process and removed regional middle management; handled a rare round of layoffs; and weathered yet another scandal involving a high-profile endorser. He describes this set-up as more of a framework than a process.
On June 27, 2011, Nike reported financial results for its fiscal 2011 fourth quarter and full year ended May 31, 2011. Revenues and earnings per share (EPS) for both the quarter and full year hit record highs. Significantly better than analysts expected. Commenting on the results, Mark Parker said, “We delivered exceptional results in extraordinary times.” Forbes has described Parker as an effective leader of NIKE.
For the future, Parker has set some big goals for Nike: increase sales by more than 40 per cent, to $27 billion by 2015; meet a set of equally ambitious sustainability benchmarks; grow earnings 7 per cent a year; and keep 33,000 employees thinking as nimbly as possible.
Today, Nike’s passion for real innovation continues to thrive. Nike is still the world’s largest sportswear company with over $20 billion in annual sales, employing more than 30,000 employees, and operating in more than 160 countries. Nike’s vision is to bring inspiration and innovation to every athlete in the world. It is evident by the goals Mr. Parker has identified that he intends to push forward with this mission and continue Nike’s leadership in the industry.