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Case StudyNike


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Today, Nike is the world’s leading provider of athletic footwear, apparel, equipment, and accessories for a wide variety of sports and fitness activities. In 2015, the company controlled 60 percent of the U.S. market for all athletic footwear. While it’s hard to imagine Nike as a tiny startup, this athletic empire began with a single, innovative pair of running shoes. The mission that has driven Nike’s innovation is to bring inspiration and innovation to every athlete* in the world.

*“If you have a body,you are an athlete.”

—Nike co-founder,

Bill Bowerman

Phil Knight and legendary track coach Bill Bowerman founded the company as Blue Ribbon Sports (BRS) in 1964. As the story goes, Bowerman used a waffle iron to cook up a new sole for a pair of running shoes (a feature that is now a hallmark of Nike designs). It was the first of many uncommon approaches for addressing customer needs that have consistently set Nike apart from the competition. Today, Nike is expanding

its FlyWeave woven sneaker technology to all shoe categories - setting themselves apart from competitors once again with its more flexible shoe designs.

Innovation at Nike has always been a driving force, and company leadership continues to underscore its importance in everything Nike does today. By aligning the organization around this clear strategic mission, Nike has been able to launch brilliant partnerships, overcome major image setbacks, and consistently release top-notch products year after year. The secret to Nike’s success is its ability to treat innovation as a marathon and not a sprint. The company invests in early stages of emerging product ideas and then completes the course by running with partnerships and key consumer groups that help drive new demand and growth. In 2016, insights from Nike+ user data will inform new products and services.

The company has been ranked #1 in Fast Company’s “The World’s Most Innovative Companies of 2013,” and CEO Mark Parker is Fortune’s 2015 “Businessperson of the Year.”

Read on to discover some of Nike’s secrets to taking a long view on innovation, and learn how you can apply them to your own organization.

A Marathon, Not a Sprint


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The Four Innovation Capabilitiesfuturethink’s Innovation Case Studies are designed to provide insights on today’s leading innovators. For each featured company, we cover four key innovation capabilities: Strategy, Ideas, Process, and Climate.

Set a foundation that defines innovation objectives and mobilizes your efforts. The notion of “serendipitous innovation” is dangerously outdated. The secret to success lies in crafting an action-oriented strategy. It means setting a vision for your company to follow, and viewing innovation as an expected result, not a lucky one. Innovation should be handled like any business initiative: with an eye on growth, results, and profit.

Think differently to develop original ideas that drive business value. In today’s economy, the ability to continually fuel innovation is what separates winning organizations from the rest. Idea generation should be managed, purposeful, and clearly linked to business objectives. Leading innovators succeed by balancing out-of-the-box thinking with sound management principles.

Create a streamlined and flexible approach to shepherd innovative ideas to market. The reality in every organization is that money is limited. To make sure you’re spending effectively, you must have a streamlined process for innovation. A good process will help to consistently identify your best projects and enable you to move them forward more efficiently.

Build a thriving work environment that drives innovation across your organization. We live in a world where the new replaces the old very quickly. Only organizations that keep pace with the shifting marketplace will be able to sustain an advantage. So how do the best companies adapt? They cultivate a climate in which employees are encouraged to innovate in a continuous and consistent manner. The companies that stay ahead have made innovation part of their DNA.

futurethink analysts develop case studies by drawing from a mix of extensive research, by conducting organizational and customer interviews (where possible), and by experiencing first-hand interactions with the organization. We want to thank those individuals who contributed to this case study and provided the information found herein, which made the Nike story so fascinating.


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A Vision Driven by InnovationAs Nike President & CEO Mark Parker points out, it’s often difficult for people to see the potential of innovation before it happens. To some people, shoes are shoes. Lacking a clear vision, it’s impossible to understand how a company built on athletic shoes could ever become as successful as Nike. But that’s the advantage Nike had: a clear vision for innovation. And at Nike, innovation is about more than tweaks to the shoes (though of course, that’s a big part of it). Innovation is about products and services. It’s about partnerships. It’s about strategy and process. It’s about transforming the experience of the athlete. This clear vision for innovation is well supported by the company’s leaders, who promote this strategic imperative by outlining a defined method for implementing it. Parker uses the word “innovation” constantly - saying it 21 times on a quarterly conference call in 2014, and 5 times in a single response to an analyst’s question – which shows how entrenched it is to Nike’s philosophy.

At Nike, the innovation process occurs in two ways: at the business unit level (where each sport group has its own product development team to come up with new or incremental ideas) and within a separate group called the Innovation Kitchen, a team tasked with coming up with “what’s next.”

The Innovation Kitchen designers, led by Vice President for Design and Special Products Tinker Hatfield, focus on special products such as the groundbreaking (in terms of product and price) Air Jordans and the FlyKnit—the industry’s first thread-woven sneaker. The Innovation Kitchen is also the name for the group’s physical working space at Nike headquarters, cluttered with unusual elements ranging from violins and Irish

architecture to commissioned artwork and bits of Nike history. By working in a visually stimulating atmosphere, these Nike designers find inspiration in the details of the unexpected. They’re able to corner the market, rather than have the “Next Best Thing,” thanks to their “constant dissatisfaction.” Competitors figure out a new shoe, then build on it, conversely when Nike comes up with something new and great they’re already working on seven things that are going to be newer.

Nike ‘Stat Shot’:

• 35: Number of buildings on the Nike campus near Beaverton, Oregon, named after legendary U.S. athletes, including John McEnroe, Michael Jordan, Rory McIlroy, Ken Griffey Jr., and others.

• 300+: The number of patents Nike has filed on average each year since 2007. Their portfolio is the largest in the foot apparel industry.

• $35: Fee paid to design student Carolyn Davidson in 1971 for Nike’s original Swoosh design.

• 832: Number of Nike retail stores globally.

• 62,000: Number of Nike employees globally.

• $30.6 billion: Revenue for the 2015 fiscal year, up 10 percent vs. previous year.

• $6.6 billion: Direct-to-Consumer sales channel and projected to reach $16 billion in this category by 2020.

• $50 billion: Revenue target for 2020

“Leveraging our portfolio is one way we sustain growth, the other of course is through innovation. We showed the power of our scale this quarter as we share technologies from one category to another and from one brand to another. This is how innovation can create

separation, and this is something only Nike can do.” —Mark Parker,

President & CEO of Nike


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Simply gathering the most creative minds from across an organization to collaborate in a fun workspace wouldn’t be nearly as productive without a strong leader setting guidelines to align the team. Setting clear definitions of “how to work” gives groups the inspiration they need, and it lets them know what types of outputs are expected. Many times, employees need to know that they have explicit permission to undertake activities that may not deliver immediate results. At Nike, there are maxims that are ingrained in employees.

• It is our nature to innovate.

• Nike is a company.

• Nike is a brand.

• Simplify and go.

• The consumer decides.

• Be a sponge.

• Evolve immediately.

• Do the right thing.

• Master the fundamentals.

• We are on the offense—always.

• Remember the man (the late Bill Bowerman, Nike co-founder).

Employees know the maxims so well that people joke that they often quote them like the Ten Commandments. But it is this unified vision to constantly create, evolve, and learn that has driven Nike to its success today.

All About the AthleteNike focuses its innovation efforts on one goal: serving the athlete. Because it believes that every person with a body is an athlete, the company strives to serve all people at all skill levels, across a wide range of sports. To that end, Nike’s business is organized by sport, not product type. There are divisions for soccer, football, golf, etc. Each division has its own product development team and these teams work only on products that meet the performance needs of their particular sport.

“Nike is the most connected, authentic, and distinctive

brand in the industry.”—Charlie Denson,

Former Nike Brand President

As a result, the focus at Nike is on the specific athlete’s needs, and explicitly designing products to meet them. This approach lies in stark contrast to many competitors, who focus on making products that can be applied to as many customers and businesses as possible.

The Nike Sport Research Lab demonstrates Nike’s obsession with catering to athletes’ needs. Their 16,000-square-foot facility has state-of-the-art equipment such as 3D motion capture to collect data and insights that provide the foundation for Nike products. Their environmental chambers allow physiologists to bring the heat of Rio de Janeiro or the frost of Antarctica to the facility, thereby allowing products to be created that lower athletes’ body temperature, or reduce their energy expenditure.


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Nike follows a four-stage process for research and development. First, researchers work with elite athletes across sports to understand the demands of their respective sport, and the environments in which they train and compete. Then, scientists explore advanced concepts that would alter performance, protection, and perceptions for athletes at all skill levels and sports. Next, the applied research teams divide and conquer, so they can develop sport-specific innovations. In the final stage, a group evaluates the product concept against Nike’s high standard for excellence.

Mike Nurse, Senior Director of the Nike Explore Team Sport Research Lab, explains that failure is a necessary part of the innovation work he does. He says, “There are plenty of examples where we have a good solid understanding of a particular sport or an athletic attribute, and we make an educated hypothesis at what we think might make it better. We build some prototypes, and more often than not, they don’t make the athlete better.” Nurse embraces the learning gained from each failure, and recalls that each misstep leads the team to a least two new ideas.

An example of this “think like the athlete” approach is the Nike Mayfly. Nike realized that customers don’t always know exactly what they need. Connecting with athletes directly helps designers discern not just their blatant, stated needs, but their latent ones as well. That’s how the lightweight Mayfly sneaker was born.

According to Nike engineers, every ounce of weight on a sneaker adds up to an extra 55 pounds carried per mile for a runner. In order to address this problem, they came up with the Mayfly. The sneaker is named for the insect, which is light, nimble, and lives for only a few minutes. Like its namesake, the Mayfly sneaker is incredibly

lightweight, just 4.8 ounces, and is only intended for use up to 100 kilometers before being discarded. How’s that for targeting a specific need?

Be the Leader Consumers SeekNike continually strives to stay ahead of emerging trends and market developments. One of its goals is to anticipate the needs of various consumer groups—not just to respond to them. It does this by expanding its role in consumers’ lives. Instead of seeing itself as simply a provider of running shoes, it looked at the entire act of running and came up with a way to make each aspect (shoes, music, time, speed, etc.) a more cohesive experience (see below). In addition, Nike understands that for many people, their products aren’t simply functional—they’re an expression of style. Recently, the company has started establishing brand leadership in new trends at the intersection of personal data and services that guide behavior change.

Nike+: When Nike Met Apple. Today, Nike is one of the most tightly integrated digital and physical product brands in the world. Treating their investments in digital as a marathon, not a sprint, has allowed the company to leverage key partnerships while growing their own internal capacity to bridge the digital-physical divide. In 2005, Nike CEO Mark Parker called Apple’s CEO Steve Jobs with an idea: synchronize running shoes with iPods. That conversation led to Nike+, a sensor that attaches to shoes so that runners with iPods can monitor how far they’ve gone, how many calories they’ve burned, and more. By uploading their stats to www.nikeplus.com, runners can join a community and see how their performance stacks up against other runners’.

In late 2008, Nike and Apple expanded the concept, rolling out Nike+iPod for the Gym, which allows users to connect with gym cardio machines and record their workouts directly to their iPods.


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A year later, Apple announced the iPhone 3GS, which includes built-in Nike+ capabilities. They’ve even developed specific devices just for Nike+, such as the Nike+ SportBand watch. Nike+ Running runs on the Apple Watch, relased in 2015, allowing runners to track their data on this multi-purposed wearable device.

Nike+ is the world’s largest running club, with more than 28 million members as of November 2015, who had logged more than 1.2 billion miles collectively. Nike aims to triple that number and reach 100 million members worldwide. The company offers two applications to this audience: Nike+ Run Club and Nike+ Training Club. The Training Club app featues 135 workouts, available in 17 languages, while the Run Club app matches users to running groups in their community. These communities of runners receive expert guidance from pacers and coaches in each session. The clubs reinforce brand loyalty and opportunities to connect runners with the Nike products they need to meet their goals. They’ve also added the Nike Trainer’s Hub, a mobile experience that lets any athlete chat and learn from elite trainers - some of which have trained world-class athletes.

Innovative Nike+ features include the ability to set up and share challenges and running routes, and broadcast workout successes via social media. In 2015, Nike diminished its presence in the hardware space by retiring their wrist wearables, FuelBand’s, and focused its efforts on becoming a leading provider of fitness software API’s for wearables. They launched a software incubator called the FuelLab, to help hardware makers integrate its fitness measurement system into their devices. By leaving the hardware manufacturing and selling to the experts, Nike can leverage its presence on

many more devices to collect and organize consumer behavior data. Using data about seasonal running behavior, and location metadata across continents, gives them product devleopment and marketing insights.

For example, Nike’s AeroReact winter exercise apparel was derived from customer insights about running in the winter. Cold temperatures inhibit performance as the body strives harder to maintain thermal balance. AeroReact fabric adapts to the runner’s temperature as the body heats up, which eliminates the need for layers. Reacting with water vapor, it knows when to engage active cooling - a process that removes heat from the body. These products allows athletes to run or exercise outside 365 days a year, and that means getting more Nike gear.

Moving forward, Mark Parker plans on digital ecosystem expansion to amplify consumer loyalty and engagement. Parker hopes to partner with best-in-class experts to levergage digital expertise in all areas of the Nike system, from product development, to supply chain, to personalized feedback with Nike+ users. Parker credits the company’s success to its deep relationship with athletes, one that he knows they need to earn every day.

One way they engage athletes with new product lines is through innovative marketing. During the “Fastest Day on Earth” event the company challenged runners to run their fastest mile ever. At the end of their race, Nike celebrated each runner’s fastest mile with a personalized video that included the runner’s name, mile time, and clips from their route using Google Street View. This storytelling campaign was a resounding success, reaching millions across social media.

NIKEiD Studio: Where Consumers Become Designers. Nike has realized the upside to empowering consumers with tools to design products appropriate to their needs. Today the company’s direct-to-consumer business is $5.3 billion and growing. It began more than a decade ago, in 1999, when it launched the NIKEiD website (http://www.nike.com/us/en_us/c/nikeid), where consumers customized products to their individual sense of style. With choices on everything from material type to shoelace color, the possibilities for customization are endless.


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NIKEiD was a huge success, inspiring Nike to expand the concept beyond the online world into appointment-only studios. In these sessions, professional athletes, celebrities, and other trend influencers could design limited-edition shoes with the guidance of Nike staff designers. Then, in 2004, on the fifth floor of Niketown in New York City, Nike opened the first fully public NIKEiD Studio. (Now Niketowns around the world feature NIKEiD Studios.) If any customer isn’t sure about taking the design plunge alone, Nike design consultants are on hand to guide them through a 45-minute design process. NIKEiD is also an example of how digital innovations can grow into brick-and-mortar retail-driven growth. Nike exceeded their 2015 direct-to-consumer revenue goal of $5 billion almost a year earlier than planned. The growth is driven by e-commerce sales and new store openings.

NBA Partnership: Starting in 2017, Nike will be the National Basketball Association’s sole uniform provider —the first apparel partner to have its logo on all on—court uniform designs. This eight year deal cost Nike $1 billion, but will give the brand high profile exposure. Parker promises to integrate sensor technology that controls body temperature into the uniforms, building off the NBA’s aim to improve the game by knowing everything about the players. In 2014, players on four NBA teams began wearing small devices that track fatigue, body temperature, heart rate, and sleep. Nike will be a tech-apparel partner for the NBA in upcoming years as they expand behavior and health data tracking for players—using uniforms as the next wearable technology.

“When you sit down to create something new, what you do is a combination of everything you’ve

done and seen in your life.”—Tinker Hatfield,

Vice President for Design and Special Products, Nike

Encourage Diverse ApproachesInnovation from Obscure Places: The Air Max. The Air Max (pictured below) is a perennial bestseller for Nike. Leading innovators understand that being open to new things is critical, because you never know when inspiration will strike like lightning. The Air Max shoe is a perfect example.

Designed in 1985, when Nike’s revenue was down 75 percent year after year, the Air Max was revolutionary because it was the first shoe that showed its insides on the outside—exposing its “air cushion” technology through a window in the heel. The designer, Tinker Hatfield (who had previously worked as an architect for Nike, designing offices and retail locations), was inspired by the Georges Pompidou building in Paris. This was a building that basically “showed its guts”—pipes, elevators, interiors—and made them visible from the outside, shaking up the world of architecture as a result. The idea of transparency was to become a major influence on shoe technology at Nike.

Tinker Hatfield discusses the Pompidou building as inspiration


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In 2012, Nike launched the Flyknit, a shoe so innovative that it was named one of TIME Magazine’s Best Inventions. The Nike Flyknit was the industry’s first thread-woven shoe that has broken from traditional multi-piece shoe assembly, as the shoe has 35 fewer pieces to assemble and its upper is machine-woven from a single-piece of fused yarn.

The Flyknit went through 195 major reiterations, demonstrating Nike’s approach of running a marathon, not a sprint, in creating great products. Many of their early prototypes resembled ballerina slippers until a team member suggested experimenting with yarn. This unique manufacturing process yeilds 80% less waste than a typical Nike design. The innovation required Nike to develop new tools for designing and making shoes, rather than simply incrementally innovating around existing capabilities. The innovation also left room on the table for further advances.

Nike has expanded its use of knit into running, soccer, training and basketball, and integrated the Flyknit within their NikeiD program. The second generation of this technology, FlyWeave, is designed to be “a bionic second skin,” and a supportive fit allowing a maximum natural range of motion for the foot. With computer-aided engineering the technique can be tuned to the demands of very different sports. The FlyWeave technique is so lucrative, that Nike took the top soccer cleat-maker spot from competitor Adidas in 2015. In the future, knitted technology will be in all shoe categories.

Experimentation Is the GameThe City Knife II. Experimentation is critical to innovation—and this often involves working in new or unfamiliar territory, as well as allowing for failure.

It’s essential to create an environment in which people feel safe enough to do these types of things. If Nike designers were afraid to push boundaries, they would never be able to come up with the brilliant concepts that they do.

It’s apparent how important this is when considering the various tactics Nike uses to spark ideas. In the Innovation Kitchen, designers often use the “deep dive” technique to explore possible enhancements and innovations to existing products. A deep dive is an in-depth study of a subject unrelated to athletic gear with the aim of finding ideas that can be translated to benefit Nike products.

For example, in an origami deep dive, designers were taught the ancient art of Japanese paper folding. Then they applied their learnings to sneaker design. How could they create shoes that would be collapsible and easily portable? How could a sneaker be made from one piece of fabric or rubber to cut down on waste? The answer to the questions raised at the origami deep dive was 2009’s City Knife II, a lightweight shoe easy to fold up and stick in a bag, purse, or pocket.

In 2014, Nike looked outside of their industry to employ the technology of 3D printing which allowed them to accelerate customer testing. While Nike was conducting discovery interviews with football athletes they realized players make adjustments to their speed and direction to compensate for how their cleats perform on the turf (i.e. inproper traction). Using 3D printing, Nike was able to make mutiple design variations in a matter of hours, which athletes could then test back to back. This technology and these insights created the plates used on the Nike Vapor Carbon 2014 Elite Cleat product.


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Nike started construction on an 125,000 sq ft innovation lab, the Advanced Product Creation Center, at its headquarters to “turbo-charge” efforts with 3D printing and bring corporate closer to the action. Currently, Nike uses 3D printing in protoyping, and eventually hopes to bring 3D printing to large-scale manufacturing - However, they need the right partner first, so for the time being they plan to use the technology to produce custom cushioning systems. They envision future consumers buying a Nike shoe design file, then 3D printing the shoe themselves (at home or in neighborhood printing hubs). Thinking futher into the future of personalized, rapidly-delivered product, Nike announced a partnership with Flex, a global manufacturer. This move gives them a more innovative supply chain and advanced manufacturing - from experts outside the footwear industry.

In 2015, Nike moved into the realm of 4D technology (self-assembling parts) with the release of MAG, a shoe that can lace itself with “power laces” inspired by the shoes that appear in the cult classic movie, “Back to the Future.” Without a strong culture that encourages risk-taking, this sort of exercise would never work inside Nike.

Innovation in Corporate ResponsibilityLike many large corporations, Nike has faced scrutiny for some of its practices, from environmental policies to labor issues. Instead of continuing to view this scrutiny as a hindrance to success, Nike stepped back and considered how it could transform the attention into an opportunity for advantage. The company innovated by bringing greater transparency to the supply chain and a common set of data standards that could be embraced by other apparel industry partners. It is now recognized as a leader in corporate social responsibility, winning awards for their initiatives. For the latest news and updates, visit www.nikeresponsibility.com.

In 2012, Nike partnered with Walmart, JCPenney, and Target to establish an index to measure the environmental impact of products across their entire supply chains.

In 2013, CEO Mark Parker highlighted to their shareholders Nike’s desire to be a catalyst for positive change in the world. Initiatives include “Designed to Move,” a campaign to get children active since physical activity has dropped up to 45 percent in some countries and “Girl Effect,” a movement to help girls get out of poverty.

A centerpiece to Nike’s corporate responsibility efforts is its Nike Sourcing & Manufacturing Sustainability Index document. Rather than keep the document hidden on a shelf, the company has embraced the open source philosophy. Nike partnered with the global problem-solving initiative Random Hacks of Kindness in 2012 to create the Open Challenge for Sustainable Materials. The contest invited apparel designers and developers to develop products using sustainable materials listed from the Nike Sustainable Materials Index.

“We see corporate responsibility as a catalyst for growth and

innovation. It is an integral part of how we can use the power of

our brand, the energy and passion of our people, and the scale of

our business to create meaningful change.”

—Mark Parker,



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Considered Design. A hallmark of the corporate responsibility initiative, Nike’s “Considered Design” ethos challenges designers to use environmentally preferred materials, reduce waste, create sustainable manufacturing processes, and use innovation to help reduce the overall environmental impact. The Making App shows designers the immediate impact of sourcing a certain textile or incorporating a specific plastic material into a shoe or apparel design. Nike’s long-term vision is to design products that are produced using the fewest possible materials, designed for easy disassembly, while allowing them to be recycled into new products or safely returned to nature at the end of their life.

“We have two favorite questions at Nike. Is it innovative? Is it authentic? We’re committed

to building a better product, a better experience, and a better

world because we know we can do it in a way that is new and

genuine.”—Mark Parker,



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Innovation Through CollaborationNike knows that in order to grow inside the company, you must look outside for new ideas. Getting locked into a “not invented here” mentality is dangerous, even if an organization has its own strong pipeline. Fresh perspectives and new ideas keep the innovation engine running. No stranger to trying new things, Nike has struck some extremely innovative partnerships to venture into new territory beyond traditional sports.

“Ideas are in charge. And they come from people who work inside Nike and from people

who work outside Nike.”

—Trevor Edwards,

Nike Brand President

One area that many people have noticed is Nike’s unexpected launch into the hardware, software, and services industry. Nike is aware of their digital limitations and therefore seek to evolve their business through partnerships. CEO Mark Parker explains, “Now is the time for big, bold solutions. Incremental change won’t get us where we need to go fast enough. Innovation is most powerful when it’s activated by collaboration between unlikely partners.”

Nike continuously looks to partners to help them reach their goals, including their ambitious sustainability objectives. Their partnership with NASA and the U.S. Department of State to create LAUNCH aims to introduce innovations to tackle the urgent problems facing society. The 2013, 2014 and 2015 LAUNCH challenges have focused on sustainable textile and material innovations. Submissions including nano imprinted plactic surfaces and natural fertilizers from residues. Nike began a partnership with MIT’s Climate CoLab to continue their work in sustainable materials innovation. Similarly, the company announced that they plan to reach 100 percent renewable energy in company-owned or operated facilities by 2025.

Innovation in MarketingInnovation doesn’t stop with products—it also happens at the promotional level. Wielding the prestige (and budget) that Nike does, it’s no surprise that celebrity endorsements are a huge part of its marketing strategy.

What’s interesting, however, is the way Nike starts with a celebrity, and then takes things to the next level. Consider the Air Jordan, quite possibly one of Nike’s most famous and successful shoes ever - surpassing $2.2 billion in annual sales. Originally developed for the legendary basketball player, the shoe’s popularity has long outlasted his own athletic career and repeatedly sets benchmarks for performance and design in the industry. Instead of pulling the brand when Jordan retired, Nike continued to invest in the innovation that made the shoe such a success.

When the former NBA star turned 50 years old, Nike celebrated his birthday month with the release of an additional 13 new Air Jordan sneakers. Nike’s year-long celebrartion of the 30th anniversary of the Air Jordan in 2015 kicked off with a dazzling interactive exhibit. It included an immersive basketball court simulator where fans could virtually recreate iconic shots from Jordan’s career, letting their “inner Jordan come out.” The exhibit also debuted new Air Jordans, and gave guests RFID bracelets to use to collect their favorite content from the installation.

In 2015, Nike signed their first lifetime endorsement deal with LeBron James, an American basketball superstar. James has been a longtime face for the brand from his first deal in 2003, to his signature shoes selling $400 million in 2015. This lifetime endorsement solifies James’ loyalty to the Nike brand. This secure partnership benefit Nike with the continuation of a successful shoe line, and association with a highly talented athlete.


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A “Sssh!” CultureFor other companies, secrecy has a negative impact on company culture, but for Nike, they’ve found a way to use it to their advantage. At Nike, employees believe that what they are doing is so valuable that it is important to protect, creating an atmosphere of exclusivity and mystery.

Nike’s Innovation Kitchen is like a historic museum with reminders on what has helped the company achieve its success in the past, such as co-founder Bill Bowerman’s waffle iron that was used to make shoes in the 1970s. This sense of history and value has a strong effect on employee culture, elevating Nike to the heights of Apple and Disney, where employees identify with their companies with almost cult-like status. At Nike, it is not unusual for employees to tattoo a “swoosh” on their legs.

This attitude of mystery and secrecy features in Nike’s public image as well—employees love being part of the secret and customers can’t wait to get in on the latest remarkable innovations as well.

Leadership That Never Sits StillWhen examining what makes a company innovative, it is useful to look at leadership. Nike’s President and CEO, Mark Parker, has been named “The World’s Most Creative CEO” by Fast Company and has helped steer its 62,600 employees to make Nike what it is today.

Despite Nike’s position as being one of the most innovative companies in the world, Parker is not sitting back and reveling in its success. He says, “One of my fears is being this big, slow, constipated, bureaucratic company that’s happy with its success. Companies fall apart when their model is so successful that it stifles thinking that challenges it.” Instead, employees are encouraged to constantly question things, and it is this way of thinking that results in the evolution of successful products and the introduction of new ones.

Parker makes a point of showcasing ideas from employees at all levels to celebrate that ideas can be from anywhere. He explains, “There’s real value to show everyone in the company that you can make a difference.” Parker’s own career was elevated when he introduced the Nike Air, a “little side project” that has driven huge success for the company. Part of this culture to experiment and innovate is driven by Parker, who encourages employees to look at everyday challenges as opportunities to improve, create, and innovate.

“Nike always tries to improve. They never say, ‘I’m No. 1, and

I’m happy.’ They always say, ‘How can we get better?’ ”

—Serena Williams,

World Champion tennis player

Their management approach is one that is taken from the culture of sports. Intuition is strongly used to determine what will work, and it drives many decisions. However, in a world where change is frequent and consumer preferences are fickle, Parker notes that they don’t always get it right. What they do have is an attitude of going along with the change (instead of fighting it), and they oftentimes help accelerate the change themselves. This has helped Nike become the flexible, dynamic, and adaptable company it is today.

Co-founder Bill Bowerman’s waffle iron used to make the first Nike shoes.


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What’s Next for Nike?Innovation continues to be a central business strategy for Nike. It is an organization that is laser-focused on continually improving the athlete’s performance, so expect to see products that incorporate new technologies and socially responsible materials that don’t just make a difference on a personal level, but on a global one as well.

With their shoe products, Nike perceives the knitted upper as “foundational technology” that will be used in every product going forward. They have engineers with doctorates in biomechanics working alongside industrial designers to expand and deepen this technology. The lower cost, efficiency, and reduced waste of making knitted uppers marks a signal for how all shoes will be designed moving forward and Nike will be at the forefront of this sustainable shoe movement. The construction of Nike’s Advanced Product Creation Center in 2016 marks the company’s commitment to 3D printing in shoe production. Nike makes protoype designs with additive manufacturing, but plans to use it in their supply chain in the near future.

Growth in emerging markets will continue to be a focus for Nike in the years to come. Russia and Brazil became billion dollar markets in 2015, and they have an increased focus on reaching $4 billion, their goal for China. With the Olympics coming up in 2016, Nike is using the opportunity to increase their presence in Brazil. Parker is confident about the full pipeline of products and digitial technology that will debut at the Games and amplify their brand.

The brand is also already looking ahead to the Olympics in Tokyo in 2020, and have been studying ancient Japanese armor to inspire their designs. Nike’s women’s business is expected to double, rising to $11 billion in 2020, and will be a focus area for marketing and product innovation.

As an example of their efforts to expand into Greater China, Nike partnered with agency AKQA to build an LED basketball court in China that has built-in motion sensors. With these light markings on the court floor, players can be lead through training sessions, respond to their mistakes, and see performance statistics in real time. The gamification of the court experience can expand interest in the sport and unleash new business possibilities for Nike. For the past two years, they’ve used the court as part of the Nike RISE campaign, an online reality show in which aspiring Chinese basketball players are mentored by professional NBA players and vie for a spot in the Nike World Basketball Festival.

Nike is striking innovative partnerships that will help them get to market faster in the digital space. Moving forward, Nike will expand its digital ecosystem to amplify consumer engagement. Parker aims to partner with best-in-class experts to levergage digital expertise in all areas of the Nike system, from product development, to supply chain, to personalized feedback with Nike+ users. Nike will leverage consumer behavior data from Nike+ to give insights into product development and timing of marketing efforts.

Nike management continues to reinforce that the organization is focused on elevating design, accelerating their innovation agenda, sharpening and improving their supply chains, and more. At Nike, there is no finish line to their innovation process. And because of that, the possibilities for Nike are endless.


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What Can You Learn from Nike?

Set a foundation that defines innovation objectives and mobilizes your efforts. Nike’s basis for innovation is to develop customized experiences for the consumer, using environmentally friendly materials, to help them achieve their specific performance needs.

• What are the guiding principles that define innovation for your organization?

• How can you define innovation in a way that goes beyond mere products and services?

Think differently to develop original ideas that drive business value. Nike believes ideas can come from anywhere, and that having eclectic skill sets, experiences, and interactions spur groundbreaking ideas.

• How will you get new ideas and inspiration from outside your organization?

• What are your customers’ unmet, unarticulated needs? How can you delight them and generate value for your business?


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Create a streamlined and flexible approach to shepherd innovative ideas to market. Nike innovates at the business level, while simultaneously incubating fresh thinking at its Innovation Kitchen.

• How do you ensure that your innovative ideas are successfully implemented?

• What workflows do you have in place to move ideas forward?

• Does innovation have a home in your organization?

Build a thriving work environment that drives innovation across your organization. Nike’s management encourages uncommon thinking and actively participates in the innovation process. Being safe is not an option.

• How do leaders in your organization actively participate in innovation?

• How do you encourage smart risk-taking in your organization?


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ArticlesAhmed, Kamal. “Nike Boss Mark Parker Sees Greener Bottom Line.” The Telegraph (February 27, 2010).

Burke, Monte. “On the Run.” Forbes (February 11, 2008).

Calem, Robert. “What, No Shoe Phone?” Fast Company (November 1, 2006).

Greenfeld, Karl Tao. “How Mark Parker Keeps Nike in the Lead.” The Wall Street Journal. (November 4 2015).

Hypebeast. “NikeiD App for iPhone and iPod Touch.” (October 23, 2009).

Kuang, Cliff. “Inside Nike’s ‘Adaptive Traction,’ the Wolverine of Soccer Shoes.” Fast Company (March 3, 2010).

McClusky, Mark. “The Nike Experiment: How the Shoe Giant Unleashed the Power of Personal Metrics.” Wired (June 22, 2009).

“Most Admired in Innovation.” Fortune (February 28, 2013).

“In Recession, Nike Is Likely to Cut Marketing.” New York Times (November 2, 2009).

Siemers, Erik. “Nike’s Flyknit Has a Sustainable Business Story to Tell.” Sustainable Business Oregon (March 23, 2012).

“The World’s 50 Most Innovative Companies 2013.” Fast Company (February 11, 2013).

Watford, Michael. “Corporate Social Responsibility: Case Study of Nike, Inc.” GRIN Verlag GmbH. (March 3, 2014).

Online References“10 Innovations That Could Create a Better World of Materials.” 29 Oct 2015. (24 Nov 2015). http://www.launch.org/about/news/10-innovations-that-could-create-a-better-world-of-materials

A Look Inside Nike’s Sport Research Lab. Sept 8, 2014. (Dec 17 2014). <http://news.nike.com/news/a-look-inside-nike-s-sport-research-lab>

“Accelerating Medical Device Innovation Using Additive Manufacturing.” 5 Nov 2015. (2 Dec 2015). http://www.designnews.com/author.asp?section_id=1386&doc_id=279104&dfpPParams=ind_183,industry_medical,kw_40,aid_279104&dfpLayout=blog&dfpPParams=ind_183,industry_medical,kw_40,aid_279104&dfpLayout=blo

Brettman, Allan. “As Nike Looks to Expand, It Already Has a 22-Building Empire.” The Oregonian (February 2, 2013)

Brownlee, John. “Nike’s 5 Lessons On Innovation By Design.” Fast Company (October 2, 2013). www.fastcodesign.com/3019090/innovation-by-design/nikes-5-lessons-on-innovation-by-design

Cardiner, Brock. “A Conversation with Nike’s Innovation Kitchen Studio Director Ben Shaffer.” High Noble Society (February 28, 2013). http://www.highsnobiety.com/2013/02/28/a-conversation-with-nikes-innovation-kitchen-studio-director-ben-shaffer/ Designed to Move: <http://www.designedtomove.org>

Carr, Austin. “Nike CEO Hints at Collaborative Future for FueiBand.” Fast Company (October 14, 2013). www.fastcompany.com/3019901/nike-ceo-hints-at-collaborative-future-for-fueIband


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Carr, Austin. “Nike: The No.1 Most Innovative Company of 2013.” Fast Company (February 11, 2013) www.fastcompany.com/most-innovative-companies/2013/nike

Find Your Fast. YouTube. <https://www.youtube.com/watch?v=bh8r6S2FNP0> (July 2, 2015).

Germano, Sara. “Sportswear Stoes Struggle in Race to Reach Consumers.” (27 Dec 2015). http://www.wsj.com/articles/BT-CO-20151227-701013

Germano, Sara. “Nike Sees $50 Billion Annual Revenue by 2020.” (14 Oct 2015). http://www.wsj.com/articles/nike-sees-50-billion-of-annual-revenue-by-2020-1444848407

“Growth and Innovation Make Nike a Huge Buy Today.” 11 Sept 2015. (2 Dec 2015). http://investorplace.com/2015/09/nke-nike-growth-stocks-consumer-discretionary-stocks-sportswear-athletic-footwear/#.Vl8fGnarTI

Here’s How Valuable the Wearables Business Is to Nike. May 23, 2014. (Dec 17, 2014). <http://www.forbes.com/sites/greatspeculations/2014/05/23/heres-how-valuable-the-wearables-business-is-to-nike/>

How Nike FlyKnit revolutionzed the age-old craft of shoemaking. Nov 27, 2013. (Dec 14, 2014). <http://www.theguardian.com/sustainable-business/partner-zone-nike1>

“Innovation at Nike Goes Beyond Product.” 13 Oct 2015. (2 Dec 2015). http://risnews.edgl.com/retail-news/Innovation-at-NIKE-Goes-Beyond-Product-102720

“Inside Access: Nike Flyweave Technology Takes Shape.” 18 June 2015. (2 Dec 2015). http://news.nike.com/news/inside-access-nike-flyweave-technology-takes-shape

Interview With Paul Francis of the Nike Innovation Kitchen. July19, 2014. (Dec 17, 2014). <http://www.designboom.com/design/interview-with-paul-francis-of-the-nike-innovation-kitchen-07-19-2014/>

“Is Wearable Tech Creating A Data Time Bomb?” 9 Nov 2015. (2 Dec 2015). http://www.business2community.com/big-data/wearable-tech-creating-data-time-bomb-01374156#feHyp5S5zwYQoyuR.97

Kish, Matthew. Cover story: The word. How Nike rode ‘innovation’ to global dominance. Aug 8, 2014. (Dec 17, 2014). <http://www.bizjournals.com/portland/print-edition/2014/08/08/how-nike-rode-innovation-to-global-dominance.html?page=all>

LAUNCH: <http://www.launch.org>

LAUNCH Innovation Challenge looks Northward. March 19, 2014. (Dec 17, 2014). <http://www.innovationintextiles.com/launch-innovation-challenge-looks-northward/>

Moynihan, Tim. “Immersive Michael Jordan Simulator Is The World’s Coolest Basketball Court.” (15 Feb 2015). http://www.wired.com/2015/02/michael-jordan-simulator-the-last-shot/

Nike 2013 Annual Report <http://s1.q4cdn.com/806093406/files/doc_financials/2013/index.html>

Nike CEO: Innovation Creates Separation. <http://video.cnbc.com/gallery/?video=3000424876> 24 Sept 2015.

“Nike CEO: Self-Lacing Shoes and Body Sensors Coming to the NBA.” 28 Oct 2015. (2 Dec 2015). http://www.digitaltrends.com/wearables/nike-nba-self-lacing-shoes/

Nike Corporate Responsibility: <www.nikeresponsibility.com>

Nike Corporate site: <www.nikeinc.com> NIKEiD Studio: <www.nikeid.com>


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“Nike Commits to 100% Renewables, Partners With MIT Climate CoLab on Materials Innovation.” 25 Sept 2015. (2 Dec 2015). http://www.sustainablebrands.com/news_and_views/products_design/sustainable_brands/nike_commits_100_renewables_partners_mit_climate_c

Nike Environmental Design Tool: <www.nikebiz.com/responsibility/nikeenvironmentaldesigntool>

Nike Explore Team Sport Research Lab http://about.nike.com/pages/nike-explore-team-sport-research-lab

“Nike, Flex Enter Footwear Technology Partnership.” 14 Oct 2015. (2 Dec 2015). http://www.streetinsider.com/Corporate+News/Nike+(NKE),+Flex+(FLEX)+Enter+Footwear+Technology+Partnership/10972518.html

Nike, Inc. Reports Fiscal 2014 Fourth Quarter and Full Year Results. June 26, 2014. (Dec 17, 2014). <http://news.nike.com/news/nike-inc-reports-fiscal-2014-fourth-quarter-and-full-year-results-fiscal-2014-fourth-quarter-and-full-year-results>

“Nike Inc Q415 Earnings Report Transcript.” (24 Nov 2015). http://news.nike.com/news/nike-inc-reports-fiscal-2015-fourth-quarter-and-full-year-results

Nike Is Actually Making Marty McFly’s Self-Lacing Shoes. Feb 17, 2014. (Dec 17, 2014). <http://nypost.com/2014/02/17/nike-is-actually-making-marty-mcflys-self-lacing-shoes/>

Nike Is a Growth Company: Letter to Shareholders 2014. July 25, 2014. <http://investors.nike.com/files/doc_financials/2014/index.html#mark_parker_letter>

Nike: Last. YouTube. <https://www.youtube.com/watch?v=yMZB8X4CG6E> (October 12, 2015).

“Nike, NASA, State Department, and USAID Aim to Revolutionize Sustainable Materials.” Nike Inc (April 25, 2013).http://nikeinc.com/news/nike-nasa-u-s-state-department-and-usaid-seek-innovations-to-revolutionize-sustainable materials

Nike Plus: <www.nikeplus.com>

“Nike Reveals How It Plans to Reinvent Your Cold Weather Wardrobe.” 3 Sept 2015. (2 Dec 2015). http://www.businessinsider.com/nikes-new-and-innovative-cold-weather-gear-2015-9

Nike Rise Basketball Campaign Gets Underway in China. July 23, 2014. (Dec 17, 2014). <http://news.nike.com/news/nike-rise-basketball-campaign-gets-underway-in-china>

“Nike Sport Research Lab Incubate Innovation.’’ Business Wire (April 25, 2013) http://www.businesswire.com/news/home/20130425006914/en/Nike-NASA-State-Department-USAID-Seek-Innovations

Nike Store site: <www.nike.com>

Nike Vapor Carbon 2014 Elite Football Cleat Unveiled for Super Bowl XLVII. <http://news.nike.com/news/nike-unveils-vapor-carbon-2014-elite-football-cleat-for-super-bowl>

Nike was awarded 540 patents in 2013: Here’s what that means for investors. April 17, 2014. (Dec 17, 2014). <http://blogs.marketwatch.com/behindthestorefront/2014/04/17/nike-was-awarded-540-patents-in-2013-heres-what-that-means-for-investors/>

“Nike Was Just Granted a Key Patent for 3D Printed Shoe Technology.” 14 Oct 2015. (2 Dec 2015). http://www.digitaltrends.com/cool-tech/nike-patents-3d-printed-shoe-technology/


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“Nike’s 3D Printing Ramp-up: Which Companies Will It Partner With?” (24 Nov 2015). http://www.fool.com/investing/general/2015/10/24/nikes-3d-printing-ramp-up-which-companies-will-it.aspx

“Nike’s Master Craftsman.” Fortune. (24 Nov 2015). http://fortune.com/2015/11/12/nike-ceo-mark-parker/

“Nike’s New Innovation Lab Making Much Out of 3D Printing (Video).”15 Oct 2015. (24 Nov 2015). http://www.bizjournals.com/bizjournals/news/2015/10/15/nikes-new-innovation-lab-making-much-out-of-3d.html

Nisen, Max. “At Nike, Workers Quote The Company’s Maxims Like The Ten Commandments.” (February 13, 2013).www.businessinsider.com/nikes-corporate-culture-2013-2

“Product Desisn: Considered Design Index.” (24 Nov 2015). http://www.nikebiz.com/crreport/content/environment/4-1-1-product-design.php?cat=product-design

Quinn, Cassidy. Prepare To Be Amazed By Nike’s LED Basketball Court. Aug 19, 2014. (Dec 17, 2014). <http://www.kgw.com/story/sports/nba/2014/08/19/nike-led-basketball-court/14284095/>

Rovell, Darren. “LeBron James Signs Lifetime Nike Deal.” ESPN. (8 Dec 2015). http://espn.go.com/nba/story/_/id/14314807/lebron-james-signs-life-deal-nike

Safian, Robert. “How CEO Mark Parker Runs Nike to Keep Pace with Rapid Change.” Fast Company (November 5, 2012). http://www.fastcompany.com/3002642/how-ceo-mark-parker-runs-nike-keep-pace-rapid-change

Siemers, Eric. “Nike Report Debuts Sustainable Factory Index.” Sustainable Business Oregon (May 12, 2013). www.sustainablebusinessoregon.com/articles/2012/05/nike-outlines-new-environmental-goals.html?page=all

Summers, Nick. “Nike+ Reaches 18 Million Users.” The Next Web (August 21, 2013). http://thenextweb.com/insider/2013/08/21/nike-now-has-18m-members-logging-their-daily-exercise-with-a-fuelband-sportwatch-or-fitness-app/#gref

Tinker Hatfield interview excerpted in USA Today: <www.usatoday.com/educate/college/careers/rtn/hatfield.htm>

“Tinker Hatfield & Nike’s Air Jordans.” How I Rock It. Esquire. 10 Dec. 2013. Television.

Tsui, Bonnie. The Extraordinary Future of Shoes. Jul 22, 2014. (Dec 17, 2014). <http://www.citylab.com/design/2014/07/the-extraordinary-future-of-shoes/374657/>

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