Mark Parker: A Seasoned Veteran Takes the Helm at Nike
I n January 2006, Phil Knight replaced CEO William Perez, his hand-picked successor, after only 13 months on the job and replaced him with Mark Parker. Reflecting on his resignation, Perez said, “Nike is an incredible organization with tremendous growth opportunities. However, Phil and I weren’t entirely aligned on some aspects of how to best lead the company’s long-term growth.” In naming Parker as CEO and a director, the board turned to a seasoned Nike veteran with 27 years of experience at the company who has been involved in many of Nike’s most significant product innovations and integrated brand companies. He also has been one of the key executives leading the company’s long-term strategic planning. Mark Parker is described as someone who has a proven track record in driving creativity, innovation, and growth. “He’s an experienced, talented executive and has played an instrumental role in building our business and making the Nike brand as strong as it is today,” said Knight.155 Parker, 51, joined Nike in 1979 and has served in various management capacities in product design, development, marketing, and brand management. He is widely recognized as the product visionary for the Nike
Air franchise and many other industry-leading product design and performance innovations. Prior to heading the Nike brand, Parker ran the company’s multibillion-dollar footwear and apparel businesses. “I’ve spent my life building the Nike brand, and I’m excited to lead one of the world’s most dynamic organizations,” Parker said. 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, he estabished a group for pursuing long-range innovation, called Explore. He describes Explore as a multidisciplinary group pursuing “deep space” innovation possibilities with academics, inventors, and other companies. Explore, he points 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 is a wireless system that allows Nike + footwear to talk with your iPod nano to connect you to the ultimate personal running and workout experience.156 According to most analysts, Parker’s biggest strength is his ability to key into consumer trends. In addition to being a product guru, he fits the Phil Knight mold and therefore will have a better working relationship with Knight than did Perez, who was an outsider to the athletic industry. Mark Parker has taken the helm of Nike at the time when the stakes in the U.S. market are particularly high, especially as Adidas has become more powerful with the acquisition of Reebok. However, Parker believes he is the right person to lead Nike through the challenges of the future. As he sees it, Nike’s success depends upon its continuous focus on the customer. “At Nike we all work for one boss—-the consumer,” he said. As long as Nike stays connected to the consumer, it will be able to keep its products innovative and relevant.157 Parker believes his job is to help carry the torch to make sure Nike’s passion for real innovation continues to thrive. Nike is still the world’s largest sportswear company with over $18 billion in annual sales, employing more than 32,000 employees, and operating in more than 200 countries. How long this leadership position will last depends on the leadership effectiveness of Mark Parker and his team. GO TO THE INTERNET: To learn more about Mark Parker and Nike, visit their Web site (http://www.nike.com). Support your answers to the following questions with specific information from the case and text or with other information you get from the Web or other sources.
- What external and internal pressures did Mark Parker face when he assumed the leadership of Nike, and how did he respond to these challenges?
- Strategic management is about formulating strategies that align an organization’s internal capabilities with external opportunities while avoiding or minimizing threats. How effective has Mark Parker been as a strategist so far?
- Part of strategic management is accomplished via SWOT analysis. What is the evidence that the leadership at Nike is making use of this tool?
- As revealed in the text, an effective strategist develops strategies that (1) enhance value to its customers, (2) create synergistic opportunities, and (3) build on the company’s core competencies. What evidence shows that Mark Parker is pursuing this course or shares this viewpoint?
CUMULATIVE CASE QUESTIONS
- According to the Big Five Model of Personality, what traits would Mark Parker consider critical for his managers to possess (Chapter 2)?
- The interactions among power, politics, networking, and negotiation are a common occurrence in organizational life (Chapter 4). CEOs have to deal with various stakeholders (shareholders, employees, board of directors, customers, suppliers, unions, government and state regulators, and so on). Describe how a CEO like Mark Parker would employ power, politics, networking, and negotiation as effective tools of leadership.
- Communication, coaching, and conflict management are said to be skills that have a direct and significant impact on a leader’s career success (Chapter 6). Given the weak market and financial position that Nike was in prior to Mark Parker’s appointment, how critical are these skills in his efforts to reposition the company and address its weaknesses?
CAS E EX E R C IS E AN D RO LE -P LAY Preparation:
Assume you are part of the leadership of an organization or organizational unit that is in need of training the management team of its foreign subsidiary to embrace and practice diversity at the highest levels. Under Mark Parker, Nike is leading the way in diversity. Nike’s vision is for every team to be high performing, diverse, and inclusive. To achieve this vision, Nike strategy is to
• cultivate diversity and inclusion to develop worldclass, high-performing teams;
• ignite change and inspire critical conversations around diversity, inclusion, and innovation;
• create venues and environments for open dialogue, diverse opinions, and a multitude of perspectives. A multinational corporation like Nike wants to ensure that all its subsidiaries around the world have high diversity standards (visit Nike’s Web site at www.nike.com for more information). Your task is to help your foreign subsidiary develop diversity standards for its respective units that are in congruence with the overall diversity standards of the parent corporation. Role-Play: The instructor forms students into small groups (representing top leadership of the foreign subsidiary or partner) to develop a diversity statement of no more than 100 words. Here are some guidelines:
- Make a case for diversity by identifying key benefits of a diversified workforce.
- Create a list of core values that your organization now holds or you would want it to have, and incorporate them into your diversity statement.
- Share your diversity statement with other members of the class, and vote on who has the best diversity statement.