Nike founder Phil Knight on how to build an innovative culture

“I’ve always said a businessman can be an artist just like a painter or a writer or a musician. My work of art is Nike”

 
Nike chairman and co-founder Phil Knight

Nike chairman and co-founder Phil Knight. “Nike’s culture is young and irreverent and I’m neither. It comes from the people.” (Andrew Harrer/Bloomberg/Getty)

This interview originally appeared at Sportsnet.

On a warm spring afternoon, Phil Knight found the time to meet up with me at the Le Germain Hotel in downtown Toronto while in Canada for just a few hours promoting his book Shoe Dog: A Memoir by the Creator of Nike.

Entering the lobby, Knight had to navigate an impromptu “go-see” of aspiring models auditioning for a casting agency. The candidates all stood tall, portfolios in hand, looking to make an impression, unaware the ultimate talent-finder in the building was the 78-year-old who’d just come through the door.

Sitting with me in the hotel lounge moments later, the man who changed the sports apparel business explained how he made the world’s greatest athletes the models for his products by selling their personalities along with their performance.


When you started Nike, you’d just graduated from Stanford. Why did you pick that moment?

Well, I had written a paper at Stanford business school about the Japanese shoe business having a niche in the shoe-business market. I got a good grade on the paper. The entrepreneurship professor was impressed. Almost nobody else was, including my father, but the idea grew and grew and grew until when I graduated, I wanted to go see about it.

If your dad didn’t give you the money to start Nike, where do you think you’d be today?

I’d probably be a bookkeeper for a retailer. No, I don’t know. When I took the entrepreneurship class at Stanford, the first lecture was about an entrepreneur and his personality. They described it as being different than a businessman, who is an overall scientific manager. They said, “We have conferences for both. We have conferences for IBM middle managers and we have conferences for entrepreneurs in here.” He said, “When the middle managers go off to lunch, they all go off and discuss their problems. When the entrepreneurs go off to lunch, they all go off by themselves.” And I said, “That’s me!” [Laughs.]

In the book you write about going to Hawaii after school and being a salesman—and not a great negotiator.

Right. [Laughs.]

What did you learn about yourself there that you could carry forward in your business career?

One of the things was that I really didn’t enjoy sales. The big turning point in Hawaii was I was having a great time and [was supposed to continue travelling.] The guy who was going to go with me around the world decided he wasn’t going to go at that time. It was unclear when he would go. So I was either going to have to go on alone, stay there or go home. I ultimately decided that things that I wanted were more important than any social benefit and I went alone.

You mentioned you didn’t enjoy sales, but if we’re being honest, you are in the sales business.

I am in the sales business, but I do enjoy this product, so I guess that makes it easier.

Why does that make it easier?

I think I’m not a natural-born salesman, for sure, but If I have a product I really believe in I can overcome some of the shyness and get through the things that aren’t natural to me.

The book reads as a bit of an underdog story—both your story and the company’s—but if you polled most rooms, you’d find Nike is perceived as the Goliath. Do you try and keep that underdog mentality in the way you run the business?

Yes. The way we started and grew is definitely part of our culture. And it’s one of my goals to keep that as part of our culture.

Is that difficult now that you’re No. 1?

Yeah obviously things have changed. What makes it hard is you’re going to have so many new employees each year. We’re going to have over 60,000 new employees this year, so it makes it difficult to get the message out about who we are and what we want to be—the underdog culture. But we do a good job of preaching that message out and I’m really quite happy where the company is right now.

What do you think entrepreneurs reading the book should take from your journey?

I think one of the lessons is the hardship that any entrepreneur has to go through when you look at any story of start-ups on their way to success. Steve Jobs, for example—tons of hardship before he really made it at Apple. Everybody goes through those hardships; ours just lasted a little longer than most [laughs]. But any entrepreneur has to prepare for a lot of dark days and they’ve got to really like what they are doing and they have to have a reason for it to succeed.

You mentioned Steve Jobs and Apple, a company you do business with. What made you decide to partner with Apple?

Well, I think, obviously we admire Apple a lot. I mention in the book the company we looked at with so much respect was Sony. Well, Sony was just a forerunner of Apple. Apple is the new Sony. We just respect what they do so much with their innovation. With their ability to sell high- and low-end, from iPods all the way up to the most expensive products. We just admire them a lot. We’ve done some things together. We’re kind of entering a new era. It’s hard to define but one of the business journals described it as not the manufacturing era but the artificial intelligence era. So doing things together with Apple makes a lot of sense. We do share a director. Tim Cook, who is the CEO of Apple, is on our board. There is a good relationship there and I believe the cultures are similar.

Culture starts from the top and filters down. In your interactions with high-level athletes, have you learned anything that you’ve tried to impart in your business strategy?

First of all, I disagree with your premise a little bit that culture comes from the top down. The culture is sort of like an individual’s personality: you don’t get to dictate what it is going to be. Nike’s culture is not the same as me. I’ve said before that Nike’s culture is young and irreverent and I’m neither. It comes from the people. I have fingerprints on it but I didn’t dictate it at all. But [we’ve learned things] from athletes that we’ve dealt with over the years, yes. We are in a very competitive industry, and watching their reaction to competition and understanding the losses that have to come with the wins. I love the commercial that we ran with Michael Jordan that said, “I’ve taken the final shot 26 times and missed.” I just think that’s a great lesson.

That Nike culture you described seems to have come from Steve Prefontaine and Bill Bowerman, guys who were young and irreverent and close to you.

Absolutely. You’re right.

You made the choice to have Nike’s culture reflect those guys. Why was it important to you to continue to tell those stories?

Because, again, that gets to be who you are as a company and as a people. I think that becomes very important when you get into the fights and challenges that you have down the road. When you really understand who you are, it enables you to fight and believe. And Bowerman has been dead about 17 years and his fingerprints are still all around the company. And Pre [has been dead] longer than that. I’ve always said Pre is kind of the soul. So those lessons and those emotions are still part of the company.

You could be somewhere along the Amalfi Coast counting your money. What drives you to get up and go to work every day?

[Laughs] Well, I love the company. I want it to succeed in every way possible, and if I can help it succeed I will. I’ve always said a businessman can be an artist just like a painter or a writer or a musician. My work of art is Nike and so I’m devoted to helping it succeed in any way I can.

The company’s philanthropic efforts have also grown. Where did the desire to have that as part of your portfolio come from?

I’ve always believed—even from lecture one in business school—that good businesses are good citizens, so we’ve always contributed a significant part of our income to philanthropic causes. I think one of the ones we’re most proud of is the Girl Effect, which is basically lifting up women’s lives in third world countries in ways that ultimately will have huge economic benefit to those countries. So we feel great about that and we think that’s part of our DNA.

What did it feel like the first time you were walking down the street and saw people wearing your product?

It never gets old. It’s still a thrill to this day.

What do you most want people to take away from your book?

It covers a lot of things. Is it a book for a businessman? Is it a book for an athlete? Is it a book for a sneaker head? In 25 words or less: It’s a struggle to find your dream, but when you find it, never let it go.


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