Nike is working to address its cultural problem.
In recent weeks top executives, including marketing veteran Trevor Edwards, have left the company amid reports of “behavior that is inconsistent with [the company’s] values.” Last weekend, The New York Times published an investigation into what exactly that culture was allegedly like and how working for the brand had become “toxic” for some women.
Since then, Mark Parker, CEO of the behemoth brand, which has roughly 75,000 employees, has reportedly apologized to employees in an all-staff meeting and two women, Kellie Leonard and Amy Montagne have been elevated to vp positions (Leonard is now vp and chief diversity and inclusion officer, a new position for Nike; Montagne is vp and gm of global categories).
“We recognize and acknowledge that behaviors inconsistent with our values have prevented some employees from feeling respected and doing their best work,” said Sandra Carreon-John, global corporate communications director for the brand, in an email.
Carreon-John continued: “We are determined to take insights we have gained to build a culture that is truly inclusive, respectful and representative of diverse thoughts, backgrounds and experiences. We are already taking action—holding our leaders to higher levels of accountability, investing in a dedicated diversity sourcing team and accelerating manager training to be clear on our expectations around culture. And we will continue to drive change.”
But will that be enough to fix the brand? Analysts believe that Nike needs to retool its leadership team and truly listen to women—not just have women in leadership positions—to fix its culture.
“We’ve seen this cycle happen again and again—when you have a non-diverse, male-only leadership team, bad decisions get made, valuable employees leave, and the business suffers. Once again a lack of female leadership is corresponding with a dip in their market share, in this case in the super hot category of women’s products,” explained Cat Lincoln, CEO and co-founder of influencer marketing agency Clever. “That’s a huge miss for Nike that demonstrates how a failure to value all employees equally leads to a decline in business.”
Lincoln continued: “It sounds like they’re being proactive—now—about putting women in leadership roles, but their failure to listen to women in the past has already cost them quite a bit of female talent. In order to gain back the interest and trust of women executives, they’re going to have make a concerted effort to demonstrate that they are willing to change.”
Zarina Mak, managing partner at production shop PS260 agreed: “How can brands be marketing to women, but not be open to input or ideas from women at those companies in the first place? This isn’t about putting women in leadership roles just to fill them—this is about listening to your female co-workers and treating them with the utmost respect, welcoming their thoughts and ideas alongside everyone else’s.”
The company is working to remake its leadership team and put women into influential positions at the company, according to Nike’s Carreon-John, who pointed to the recent promotions of Montagne and Leonard: “We believe it takes leaders and systems in place to listen and take action. … We will continue to invest in our teams to create a culture of empowerment and respect while putting a sharper focus on increasing diverse representation through promotion, retention and recruiting.”
According to data from YouGov BrandIndex, the recent reports of cultural issues at Nike haven’t permanently damaged its brand perception. When news first broke in March the brand did drop in consumer perception, the data shows, but it has since leveled off, which according to YouGov BrandIndex CEO Ted Marzilli, is thanks to the company’s “teflon” brand.
Still, that doesn’t mean Nike can sit pretty. “This is a teaching moment to any brand who believes they are beyond reproach; the past does matter,” said Christopher Skinner, founder and principal of the creative branding agency, School House. “Businesses cannot change mistakes. It is how they recognize and handle them, and the measures they put in place to safeguard their people, that defines them.”
Skinner continued: “Nike needs to focus on the relationship between not just their customer but also their employees on a day-to-day basis. They have, along with other brands, the responsibility of putting human experience ahead of profitability, which will bring a positive reaction from consumers and business partners alike.”
Brands marketers looking to learn from Nike’s current situation should “listen to the women on the team now, and actively work to bring in diverse voices for all roles, especially leadership roles,” explained Lincoln. “We all have blind spots, but if your workforce draws from a wide range of experiences you have a better chance of catching a mistake before it becomes a disaster.”
Another lesson, according to Geoff Cook, partner at Base Design, is that “HR has become one of the most important roles within companies today. Whether it’s facilitating or ensuring a healthy culture, the decisions HR departments make have an increasingly profound effect on how a brand is perceived.”