Mark Parker’s Race to Make Nike a $50 B Company with Digital as the Catalyst
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Phil Knight, the co-founder and inspiring entrepreneur who created Nike is Chairman Emeritus as of June 30, 2016. The company appointed Mark Parker as the Chairman in addition to the CEO role that he has held since 2006. Now it is Mark Parker’s turn to forge a path forward towards 2020 seeking to be a $50 Billion company.
His roadmap and success will depend to a large extent of Nike’s portfolio of digital capabilities and relationships in ecosystems. Here are some noteworthy moves that Mark Parker has already put in place. And many more may be forthcoming.
One: During the same meeting, the Board appointed Tim Cook, CEO of Apple as the lead independent director. To my best knowledge, this is the only corporate board that Tim Cook sits on — and that itself is important. Though Nike and Apple have had rich history of collaboration, I believe Nike’s relationship with Apple could be an example of how companies in traditional industries compete and cooperate with digital giants. This is a theme that I discuss in my book, The Digital Matrix: New Rules for Business Transformation through Technology.
In late 2016, Nike and Apple annouced a special version of Apple Watch. And, I am sure there will be other innovations from this joint collaboration. Nike has abandoned its hardware ambitions and my guess is that it will work closely with Apple to co-create products and services as part of interconnected ecosystems.
Two: in February 2016, Nike appointed Adam Sussman as Nike’s first Chief Digital Officer. The title by itself may not reveal much but the focus of digital as Nike seeks to become a $50 billion company by 2020 is clear in his scope of responsibilities. Nike announced that: “Sussman will lead the team responsible for the development of industry-leading digital products and services across Nike.com, Nike+ and Brand Digital platforms. Sussman’s team will also drive Nike’s consumer engagement, while accelerating the collective power of all of Nike’s digital products and services for consumers.”
Nike views digital as a vital accelerator, not just in connecting athletes with knowledge and services, but in everything it does. From amplifying how it gives consumers access to the Nike Brand in new and innovative ways to manufacturing and delivering the products and experiences athletes need to achieve their potential…
Sussman reports to Trevor Edwards, President of Nike Brand. Digital is central to the future of Nike Brand and in Edwards’ view:
Digital offers a fundamental transformation of our business, as we create an industry-leading digital ecosystem that flows through all that we do..
The Chief Digital Office is in effect the chief strategist and the chief orchestrator of the ecosystem; and Apple is an important co-creator in this digital ecosystem.
Three: its new Nike + app is designed to allow its customers to have personalized experience.
…an all-access pass to their potential, assisted by the right gear, expert guidance and incredible events via one seamless sign-on. What’s more, the plus, the company declared, now meant “personal,” with everything in the app tailored expressly to its user.
We will also see conversational bots from Nike. I have no doubts about that.
On December 1, it launched a revolutionary product — HyperAdapt — interestingly described by Nike itself as “first performance vehicle for Nike’s latest technological breakthrough, adaptive lacing. The shoe translates deep research in digital, electrical and mechanical engineering into a product designed for movement.”
If this is 1.0, what might we see in future versions?
Four: Nike, under Mark Parker, has focused more on patents including some that focus on next-generation design and 3D manufacturing.
Nike in 2015 announced a partnership with DreamWorks and its newly formed technology company, NOVA. “Using the NOVA visualization platform, Nike is building a 3D digital design system that will transform our product creation process. The partnership will deliver cutting-edge capabilities, such as nearly instantaneous digital print applications, photo-real 3D visualizations and ultra-rapid prototyping.” Nike has been well known for his supply chain partnerships in Asia during the initial days of the company history. Digital is expected to profoundly change the locus of manufacturing and the required capabilities to deliver near-shore, personalized products. In Mark Parker’s words:
“the expertise of two design leaders, Nike with the human body in motion and DreamWorks with the animated body in motion. I have been talking with our design teams and they see great potential in NOVA’s platforms to advance our creation process in capability, precision and speed.”
Nike has also entered into a partnership with Flex that has expertise in ‘sketch-to-scale solutions’ and through this partnership, Nike could further lead with footwear innovation and greater customization options to the consumers.
These partnerships are starting points of a series of relationships taht we could expect Nike to structure to lead with the next wave of manufacturing.
The Road Ahead: The road from $32 plus billion in 2016 to $50 billion is steep but not insurmountable.
We are in the early stage of digitization of our lives — beyond apps to conversational bots; beyond mass production of products delivered through efficienct global supply chains to solutions for individual fitness needs and goals. Wearable fabrics are showing signs of promise and acceptance. Quantification of health is in its infancy. Health and fitness will be more intricately connected with data and analytics.
Nike’s historical competitors are well known: Adidas, Reebok, Puma, Under Armour, Polo, Lulelemon and other brands in footwear and apparel. But Nike’s future is digital tech — in its products, manufacturing processes and how it delivers superior personalized services.
Nike’s not alone. Every major traditional company in established industyries face this inflection point. Past performance is not a guarantee of future success. Digital is no longer an afterthought.
How well does your business roadmap towards 2020 take advantage of digital technologies?
If this theme is of interest to you, you may find the discussions in my book relevant and useful.
It is available for pre-order from Amazon.
Originally published at medium.com on December 30, 2016.
