Watching Nike Grow-Up

Nike

9. Industry, Innovation and Infrastructure 11. Sustainable Cities and Communities 12. Responsible Consumption and Production 13. Climate Action

Overview

Nike, the largest athletic footwear brand in the world. “Just do it!” Nike provides footwear for athletic usage or even casual. The company holds itself accountable and ultimately values brand loyalty.

Author

Desiree Celestin

Desiree Celestin

School

Rutgers Business School

Rutgers Business School

Professor

Joe Markert

Joe Markert

Innovation

Nike's mission statement and goal are “to bring inspiration and innovation to every athlete.” The company is innovative and inspiring, so they decided to find newer ways to produce and make their product. Nike had taken responsibility for its impact on the environment in 2009 and began the journey of becoming more sustainable. Goal #12 of the United Nations Sustainable Development focuses on Responsible Consumption and Production. Nike ultimately took action by examining how they were conducting business in the past and how they could positively change. The company needed to update its business model and make sustainability a priority.

The company's first move toward sustainability was replacing the gas previously in their Nike Air sneaker with nitrogen. The subtle switch led to newer ideas and the creation of the Nike Air Max 360. The company then found that small changes led to positive changes in the environment. Greenhouse gasses can be harmful to the environment, and consistently producing a shoe that includes such harmful gas does not align with the United Nations Sustainable Development Goals. The company began to reassess how they are creating products and how they could become more environmentally responsible; they began to consider:

How the products are being produced

The materials that are being used

The methods of transportation for their products were they using

How the company could improve began to be the focus for the company.

Nike went public and took responsibility for its environmental community and sought to improve its production. As a result, the company was supported by its stockholders and investors and could fund its new mission.

Watching Nike Grow-Up

Inspiration

As Nike stated in its mission statement, its inspiration came from all customers, not only athletes. Mark Parker, the former Nike CEO, said "The innovation that we are putting out there, I think we are just getting better at how we are leveraging that across the entire offense." Nike has the talent to think outside the box and put its inspiration into action. Nike listens carefully to its customers to deliver a unique experience and involvement. Moreover, Nike wants to maintain superior competitors. Parker added, "I feel like this has always been a competitive advantage for Nike as the source of brand energy but also tremendous growth for us. I have never seen or been at Nike during a period where there is such robust innovation that's relevant to consumers across the portfolio." Nike's goal is zero waste and to leverage sustainable innovation to reduce emissions at their facilities. For example, Nike uses 71% From Recycled materials. Also reached 100% renewable energy in the U.S. and Canada. Nike changed the game of technologies and products.

For example, Nike Innovation includes:

Flywire Support system

Nike Hyperdunk Basketball shoe

Nike Air Trainer 1 shoe

Lunarlite Form Cushing

New generations of free footwear

Furthermore, Nike partnered with Discovery Education to create a curriculum, open-source information for parents and primary teachers. Nike inspires its employees to join in building positive impact. They call it 'Give Your Best.' To add, they match employee donations and offer volunteer reimbursement of $10 per hour for each hour they volunteer. Also, they give their employees time to volunteer in their communities.

Overall impact

This assignment guided us to Nike’s website to gain more insight into the company's current path to a more sustainable future and hear what the CEOs have to say. Overall, Nike has restructured the inner workings of their factories to ensure that they are all compliant with the new sustainability requirements. In doing so, they have a rating system for their factories and use a color code-based system. For example, the company strives for all factories to be rated ‘Gold,’ indicating a world-class factory that adequately follows the updated sustainability guidelines.

The company has also taken significant measures to ensure all employees understand the new mission. They have done so by implementing up-to-date company training, conducting more on-site audits, and encouraging more communication with contract managers and Human Resources. In addition, the company began to take responsibility for its impact on the environment in 2009; by looking to lessen its uses of natural resources such as water and decrease its carbon impact. Another way that the company has revised its procedures is also by using more recycled materials. The long-term goal of the company is to have a positive impact on the environment. The company’s short-term goal was to reduce their waste percentage, and they have done so by 10% as of 2021.

Due to the company’s focus on being more sustainable, they have seen an increase in their customer base. Although Nike is the largest seller of athletic wear, a Nike employee (who preferred to be anonymous), shared that “there has been a large increase in the number of customers that are looking for more recycled footwear. It makes them feel better like they are doing their part in trying to save the world, I guess? I think it is pretty cool.”

Business benefit

What are the benefits?

Nike has been experimental to comply with consumer wants and needs while shifting to more sustainable practices. They have differentiated themselves from other footwear brands by making sustainability their mission hence having a competitive advantage. Holding themselves accountable and taking responsibility for their global impact has made them more attractive to consumers. The company has also seen an increase in sales and investments. Since the push for more eco-friendly brands, the company has seen an increase in stockholders and investors.

While making this shift, the company has made tremendous efforts to take care of its staff through this change. “We scaled up our efforts across traditional channels like executive recruiting, campus recruiting, and sourcing, and were especially excited about the innovative programs we have launched to proactively expand our reach and diversify our talent pool,” according to Nike’s current impact report. The company has provided internships and apprenticeships for their workers and placed much importance on employee well-being. “We have continued to see high rates of conversion to full-time positions,” says the Nike employee. The company has maintained a high retention rate because of its attention to its workforce and implementing services to keep them. Due to the company promoting their employees' ideas and looking for innovative and out-of-the-box leadership; There have been many new sustainable shoe designs and ways for Nike to improve on their mission. While following their mission, they can reuse materials and use them to make new products. Their recent and sustainable sneaker is the Vapor Max 2020.

Social and environmental benefit

Globally everyone benefits from the company's decision to become more environmentally conscious. Our team leader directed us to Nike’s website for quantitative data. We found that Nike has had a 35% reduction in their energy uses and lessened their carbon footprint emissions while dying their products. We also found that there has been a 20% decrease in their freshwater usage when dying products as well. Water is one of the concerns among a long list of others on the United Nations Sustainable Development Goal. In addition, Nike has found new ways to source the material, “Nike’s apparel and Converse increased its sustainable cotton to 100% in FY20. Our cotton was 90% Better Cotton Initiative, 9% organic, and 1% recycled.” They have revised their methods of transporting products and focused on creating more “green” footwear.

When we asked our interviewee what he observed about the customers that come in and ask for sneakers that are made from recycled materials, “These customers surprisingly are into fitness and overall health. They make sure to let you know they care about Earth and being healthy, hahaha. I think it’s great to know that there are still people that care.” There are many benefits for large companies to hold themselves accountable and genuinely consider how they affect everyone globally. Although we could not get much information from our interviewee, it still holds even in local stores that sustainability is a significant focus for the company, consumers, and overall the environment.

Interview

(this person did not want to me named; for confidentiality), Assistant Manager

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Nike

Nike

Beaverton, US

Business Website: https://nike.com

Year Founded: 1964

Number of Employees: 5001 to 10000

Nike is the largest athletic shoe retailer in the world. "Just Do It!" is there famous slogan that rings a bell for everyone!