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Nike Decides To ‘Just Do It’ And Replaces CEO John Donahoe With Company Veteran Elliott Hill
Pamela N. Danziger
Senior Contributor
Pam Danziger reports on retail, focused on the luxury consumer market.
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Sep 20, 2024,11:05am EDT
Updated Sep 20, 2024, 11:08am EDT
Children play in front of the American multinational sport…
HONG KONG, CHINA – 2021/10/07: Children play in [+]front of the American multinational sport clothing brand Nike store, logo, with a slogan “Just Do It” illuminated banner in Hong Kong. (Photo by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Nike just announced that CEO John Donahoe will retire on October 13 to be replaced by longtime Nike stalwart Elliott Hill. Donahoe joined Nike’s board in 2014 and became CEO in January 2020. Hill came to Nike as a sales intern in 1988 and worked his way up to president, consumer and marketplace by 2020.
According to reports, Hill was on the shortlist to replace current executive chairman Mark Parker when he stepped aside as CEO, but Donahoe got the top post and Hill left the company shortly thereafter.
Now Hill is coming back as CEO and member of the board and there has been a resounding roar of approval from company employees and stockholders.
Nike stock jumped 9% in after-hours trading Thursday after the news broke, according to CNN. And Fast Company’s Mark Wilson reported that many “jubilant” employees left work early to celebrate.
Welcome Return
“I am excited to welcome Elliott back to NIKE,” chairman Parker said in a statement. “Given our needs for the future, the past performance of the business, and after conducting a thoughtful succession process, the Board concluded it was clear Elliott’s global expertise, leadership style, and deep understanding of our industry and partners, paired with his passion for sport, our brands, products, consumers, athletes, and employees, make him the right person to lead Nike’s next stage of growth.”
Hill is equally jubilant about his return. “NIKE has always been a core part of who I am, and I’m ready to help lead it to an even brighter future. For 32 years, I’ve had the privilege of working with the best in the industry, helping to shape our company into the magical place it is today.”
Strategic Missteps
As recently as April, Nike co-founder Phil Knight told the Oregonian that Donahoe had his “unwavering support” as the company rolled out a line of new products in advance of the Paris Olympics. But that confidence wasn’t widely shared, with its stock dropping 24% so far this year before yesterday’s bounc
On paper, Donahoe seemed to have the right stuff to guide Nike forward. He holds an M.B.A. from Stanford and previously served as president and CEO of Service Now and eBay after putting in over 20 years at consultancy Bain & Company as president and CEO.
Described as more of a numbers guy – “In his four years at Nike, he’s proven to be more of a calculator than a creator,” wrote Fast Company’s Wilson in an in-depth profile – Donahoe predictably used his calculator’s toolkit to turn Nike around.
Innovation Lacking
After six months at the helm as part of the “Consumer Direct Acceleration” (CDA) strategic plan, Donahoe aligned the Nike team around what was termed a “simpler consumer construct” based on Men’s, Women’s and Kid’s products and away from its previous organizational focus on the sport and enhanced performance for each.
It effectively turned Nike into any other fashion sportswear brand and diluted the company’s secret sauce of striving for enhanced sports performance. A notable lack of innovation resulted.
It “turned more lax on product innovation, particularly in running, as up and coming brands started to resonate,” wrote Oppenheimer analyst Brian Nagel.
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