John Donahoe, President and CEO of Nike.
Source: Nike
Nike Chief Executive Officer John Donahoe on Friday blamed remote work for the company’s lag in innovation and said it’s difficult to be disruptive when people are working from home. .
In an interview with CNBC’s Sarah Eisen in Paris, Mr. Donahoe was asked about the lack of fresh new products in the company’s assortment, which had been a concern among investors.
“What’s missing is the bold, disruptive innovation that Nike is synonymous with, and in retrospect, the reason for that is pretty straightforward,” Donahoe said.
He noted that footwear factories in Vietnam had been forced to close due to the COVID-19 pandemic, but “more importantly” Nike employees had been forced to close for two and a half years. He said it was because he was working from home.
“In hindsight, it turns out it’s very difficult to do bold, disruptive innovations, to create bold, disruptive shoes on Zoom,” Donahoe said. “Our team reassembled in person 18 months ago, and we recognize that. So we reorganized the company and last year expanded our pipeline of disruptive innovation along with our iterative innovation pipeline. We have been completely focused on rebuilding.”
Donahoe said Nike’s innovation pipeline is “as strong as ever” and that consumers will see new product launches each season and the fresh storytelling the brand has long been known for. He said he can look forward to it.
The chief executive’s comments come at a difficult time for the company. Some analysts and investors believe sneaker giants are lagging behind in innovation, attracting a new generation of runners, and losing market share to upstarts like On Running and Hoka, which have grown rapidly in recent years. It is criticized that there are
In December, Nike announced a major restructuring plan aimed at cutting costs by about $2 billion over the next three years. It also warned of a slowdown in demand in coming quarters and cut its sales outlook.
Two months later, the company announced it would cut more than 1,500 jobs, or 2% of its workforce, so it could invest in growth areas such as running, the women’s category and Jordan Brand.
Donahoe argued Friday that Nike is still “growing share” and remains a dominant force in running and sports in general.
Asked about On and Hoka, Donahoe said: “Over the past 50 years, we’ve done more to advance running than any other brand in the world, and we continue to lead elite runners.” he said.
“In running, as in other categories, innovation has always been a Nike hallmark, and we intend to innovate rather than just copying what others are doing.”
