Should Nike Hook The CEO Or Draw A Fork?

For Nike, a farewell to a term of 13 years CEO means more or less the end of an era.

On October 22nd, according to CNBC, Nike announced that Mark Parker, CEO of the company, will be leaving in January 2020. After retiring from CEO, Mark Parker will continue to serve as executive chairman of Nike. His successor is John Donaho, chief executive of ServiceNow, an enterprise cloud service provider, and John Donahoe, Nike's board member. Donaho served as CEO of eBay and is currently chairman of PayPal's board of directors.

Mark Parker is a veteran employee of Nike. So far, he has been in the world's largest sporting goods company for 40 years.

In 1979, he joined Nike as a footwear designer in the R & D department, and then gradually promoted to vice president and vice president of the company. Before becoming CEO, he worked with Charlie Danson as co chief executive of Nike. In 2006, Mark Parker took the position of CEO from Nike Phil Knight, and then led Nike for 13 years.

At that time, Phil Nate once said to him, "Mark's achievements in promoting creativity, innovation and growth are obvious to all."

The difficulty and pressure can be imagined if we take the relay baton of the founder and lead a company that is inevitably coloring and relatively mature to a broader market.

The CEO's achievements in the past 13 years should be cut into two sides: one side is the rapid growth of performance and share price, the other is the controversy over Nike in recent two years. Will Nike hook the CEO or draw a fork?

Good performance and innovative vitality.

In 2006, when Mark Parker just became CEO, Nike's stock price was still hovering around $10. 13 years later, Nike hit a record high price of $96.87 on Monday (October 22nd), closing at $95.60, bringing Nike's market value to 119 billion 120 million dollars. From the beginning of this year to now, Nike's stock price has increased by 29%.

The support price has nearly doubled ten, which is a steady growth and convincing performance.

In September 25th, Nike released its first quarter of fiscal year 2020. In the three months ending August 31st, Nike's global revenue reached $10 billion 660 million, an increase of 7.2% over the previous year, which is higher than the top 10 billion 440 million of the analyst's expected range. It is worth mentioning that China's revenue has maintained double-digit growth for 21 consecutive quarters in the Greater China region, with revenues of US $1 billion 680 million, which is also higher than market expectations.

In addition, the net profit, gross profit margin and other indicators in this quarter have also maintained steady growth.

In general, during the whole CEO term of Mark Parker, despite the increasingly fierce competition in the sporting goods market, especially in the North American market, Nike still maintained the status of the world's largest sporting goods brand, and constantly launched innovative products.

How to make a large company with more than 60000 people remain innovative? In addition to effective management practices, perhaps Nike also needs to thank CEO for its former "designer" status.

In an interview with the weekend pictorial in 2016, he said that Nike was first an innovative company. Nike and its co founders Phil Nate and Bill Bowerman had obsession with product innovation. After becoming a CEO 10 years later, he needs to take charge of all important management matters. Parke will still participate in the design of a limited number of product lines with Nike's famous designer Tinker Hatfield.

But controversy has been around.

The other side of the coin is that since 2018, the accusations against Nike have begun to be clamour. The key word is sex discrimination.

At the end of 4 2018, the New York Times revealed a survey report compiled by female employees inside Nike. The report shows that Nike is full of gender discrimination, the ability of female employees is seriously underestimated, its status is more marginalized than men, and it is difficult to get promotion opportunities. It is also excluded from key sectors of basketball, and even male executives have tried to harass female employees.

Female employees who were subjected to unfair treatment were reported to the personnel department, but they were not effectively resolved. So the female employees inside the company began to investigate the employee's workplace voluntarily, forming the report.

The workplace equality campaign ended with Nike's 9 consecutive executive dismissal, and promoted two female employees to senior executives (respectively, vice president and chief diversity officer of the global category business department, which is Nike's newly established executive position). The management of the company has made great changes, but Parke has remained in the CEO position.

Then in May, Nike was labeled "sex discrimination" again.

On the mother's day, the New York Times revealed a video recorded by three American track and field women athletes, saying that Nike reduced or even suspended sponsorship of athletes during pregnancy.

It can be said that the time of Nike's "crumbling" -- more than two months ago, Nike launched an advertising film "Dream Crazier" for female athletes, which shows the persistence and "Craziness" of female athletes when facing unfair treatment. The advertisement was broadcast at the Oscar prize presentation ceremony. The harvest network was well received. Its solicitude for realistic issues and the characterization of women inspired many netizens. The video disclosed by the New York Times has made Nike's brand image "diversified, tolerant and feminine" collapsed, and the public is in an uproar.

The outcome of this event is that three months later, Nike global vice president John Slusher sent an email to all Nike signed female athletes, saying that Nike will not cut any original rights in any sponsorship contract because of the pregnancy of female athletes. This provision applies to 8 months before the due date and 10 months after delivery.

If the first two things haven't been touched on by Mark Parker himself, the recent doping problem is somewhat fatal to the CEO of the world's biggest transport brand.

In September 30th this year, after two rounds of investigation, the United States Anti Doping Agency banned the Nike Nike Oregon Project coach Salazar for four years in the track and field activities in violation of Anti Doping regulations. The Oregon project is a long distance running event launched by Nike in 2001. The outstanding long-distance runners include Mo Farah, Galen Rupp and Sivan Hassan.

For Parke himself, more importantly, the decision of the American Arbitration Association on the case shows that Parke and other Nike executives have repeatedly appeared in the ~2011 in 2009. The court involved medical experiments confirming physical fitness and enhancing the effectiveness of drugs.

After the resolution came out, Parke sent a memorandum to his staff on 1 October. He said in his memo: "Nike has never been involved in any attempt to systematically provide" prohibited drugs "for runners, which in itself makes me feel sick. He also mentioned that Nike had investigated the allegations against Salazar and confirmed that the latter was not illegal.

In October 10th, Mark Parker announced that the Oregon project would be closed.

In Parke's leave of absence memorandum, he did not mention whether his resignation is related to the "drug abuse incident". He spent a certain amount of time describing the next CEO Holzer.

John is no stranger to the management team. He has the same passion for sports as we do. He will help Nike speed up the digital transformation. John's global leadership in business, technology and strategy will be a great help for our team.