“We wanted Nike to be the world’s best sports and fitness company,” says Knight. “Once you say that, you have a focus. You don’t end up making wing tips or sponsoring the next Rolling Stones world tour.” From day one, Knight has had a clear vision about what he wanted his company to be, and where he wanted it to go. There have been many setbacks along the way, but it was in focusing on the larger end picture that Knight was able to keep Nike on track.
The early days for Nike were not easy ones. Knight knew what he wanted his company to be about, but he didn’t know how to get it there. “We had no master plan,” he readily acknowledges. “It was totally seat of the pants.” Everything about Knight ran counter to the conventional corporate culture. Employees went to work in running shoes and shorts, made a habit of partying regularly, and made decisions on the run. Nike’s headquarters was dubbed The Campus because of its collegiate, fraternal nature. At one company event, Knight went out of his way to show he was an atypical CEO by dressing up in drag.
However, Knight’s irreverence would only last so long. After one fatal mistake in the mid-1980s, Knight would quickly realize that he needed to have a more well-defined and executed focus. At the time, Nike was the industry leader for athletic shoes. But, when the aerobic fad hit in the 1980s, Nike fell behind; Knight had forgotten about the women. Stepping in to fill the gap was Boston-based Reebok, which had created an attractive – but not necessarily high quality – shoe whose sales surpassed Nike’s in 1987.
Knight was – and still is to this day – peeved about the experience but it was a wake up call. His lack of focus was costing him dearly, but it was by regaining it that he would soon overtake Reebok once again. Knight knew that he didn’t want to just create a pretty shoe to rival Reebok’s, but that by focusing on what he had set out to do from the beginning – create high quality athletic shoes – he could win out in the end.
“We’re not in the fashion business, as the Wall Street Journal wrote the other day,” says Knight. “We’re in the sports business, and there’s a big difference.” Knight regained his focus, streamlined the company, and reorganized it along more conventional lines. Whereas once he made decisions based purely on gut instinct, today Knight uses statistics and focus groups. He still takes risks, but more focused ones that are targeted towards keeping the company on track.
In 1989, Nike overtook Reebok at the top of the industry, where it has remained ever since. And, it did so by sticking to Knight’s vision of creating the ultimate athletic shoe. It was by maintaining that vision that the company has remained an industry leader while its competitors have floundered by the wayside.
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