Winning Is A State Of Mind At Nike

Three running enthusiasts teamed up and turned a fad into a national movement. Phil Knight has turned that winner's attitude into a corporate philosophy.

Tweet

Back in 1965, Phil Knight, cofounder of Nike Inc., had no idea he had just launched a company that would shortly become a front-runner on a fast track. Knight, only 27 at the time, was an auditor with Coopers & Lybrand in Portland, Oreg. After work and on weekends, he'd load up his station wagon with Japanese sneakers, drive to local track meets, and hawk the sneaks from his tailgate. He is still a bit bemused by what happened.

"I hope nobody ever starts thinking this company is some kind of institution," he says. "We're still just a bunch of guys selling sneakers."

Back in 1965, Knight's partner, 54-year-old Bill Bowerman, a widely respected track-and-field coach at the University of Oregon, also had no idea what the future would hold. Bowerman had dug up $500 to finance half of Knight's tailgate inventory, and used to spend his evenings at a kitchen table tinkering with the imported sneaks, a stitch here, a little more padding there, anything to squeeze out a few more seconds for future Olympians.

Nor was there any way Jeff Johnson could have foreseen the physical fitness hysteria that would soon sweep the country. In 1965, 23-year-old Johnson, a former graduate student in anthropology, became Nike's first employee, while toiling full-time as a social worker for the city of Los Angeles. After work, he ran a makeshift retail store in his apartment where he sold Knight's Japanese sneakers.

"I believed in Knight," he says. "I knew I could sell those shoes and I knew exactly how I was going to do it."

The combination of their individual talents -- Knight's marketing, Bowerman's commitment to athletic excellence, and Johnson's energetic salesmanship -- with the growing national awareness of physical fitness had the power of a nuclear reaction.

When Nike went public in 1980, the country saw for the first time that the "sneaker guys from Oregon" had built a company with annual sales of $270 million, net income of roughly $13 million, and annual production of 30 million pairs of shoes. This was all the more impressive because in 1972, the company's sales were under $3 million.

When anything is moving that fast, it's difficult to describe how it's being done. In Nike's case, for example, it's possible to look at this fortuitous arrangement of individuals swept up in a national trend as just another case of being in the right place at the right time. There is, perhaps, something of this in every story. But in the Nike story, providence gets a lot of human help.

Nike is primarily a company created by athletes for other athletes. As a result, the company dwells on winning. Bowerman, for example, has devoted his life to winning and even today, at 70 years old, is still coaching. When Phil Knight was a middle-distance runner on his track team at the University of Oregon, Bowerman used to holler at him to "run faster." Knight wanted to win and eventually ran the mile in 4 minutes, 13 seconds. Nor was Johnson any slouch. Once, during his own running career, he ran the mile in 4 minutes, 14 seconds.

All three of these men had been winning and thinking about winning for so long that when they started out in business, they couldn't think any other way. Winning was exalted to a corporate philosophy and has since become something of a tribal ritual vigorously performed by a horde of Nike employees at the aptly named "Annual Beer Relays," where various departments form teams to race against each other.

It's a way of doing business captured in the company's name. Contrary to what many people still think, the name is not Japanese for "sneaker," but the Greek name of the goddess of victory. "My impression of this company," says Johnson, "is that we're a bunch of athletes trying to beat everybody."

Phil Knight, who was still good enough at 43 to run a brisk 800-meter leg in this year's Beer Relays, traces Nike's roots all the way back to the late '50s when he was on Bowerman's track team. "Bowerman was totally dedicated to running," he says. "He wanted to do everything he could to help you win. Even then, he was playing with shoes.By today's standards, they were very crude. I mean they were all leather and very heavy. If you wore them in a race today, you'd think you were wearing street shoes."

In 1960, Knight entered Stanford's Graduate School of Business. During his second year, he took a course in small business management. The course required that he write a paper on emerging business opportunities. "Everybody was writing about computers and electronics," he says, "but all I really knew about was running." Knight's research convinced him that the market potential for running shoes was tremendous. At the time, the only companies that were making athletic shoes anything like today's models were the West German firms Adidas and Puma. A few Japanese companies were only in the early stages of shoe design, but they were making rapid progress. Knight concluded that the Japanese could become the dominant market force in athletic shoes.

In the fall of 1962, Knight celebrated his graduation from business school with a trip around the world. An early stop on his schedule was Japan."I hadn't gone there with the intention of doing business," he says, "but I kept thinking about the paper I'd written and decided to check things out." Knight wandered through several department stores looking at the various brands of running shoes. He chose the Tiger brand as the most attractive and functional.

 1 | 2 | 3 | 4  NEXT 

Read more:

Sign-up for our Innovation Newsletter

Email Address: