Elliott Hill spent his entire career at Nike. But he spent a full year as its CEO before giving his first media interview in the role. In mid-October, the company invited a select group of global journalists to Beaverton, Oregon, to see the latest in Nike innovations.
We tried a slew of ambitious products that will hit the market over the next year plus: mind-altering footwear, exoskeleton sneakers, and a jacket that inflates to keep you warm. And a few of us got to speak with Hill.
Hill is the third Nike CEO I’ve interviewed for Fast Company. He’s not as introspective or soft-spoken as the design leader Mark Parker. He’s not as unapologetic or headstrong as the bean counter John Donahoe. Truth be told, after our brief chat, I’m still wrapping my head around who he is. But something about his manner—quick speech, a lean-forward posture, and a penchant for hitting you in the knee to make a point—that makes it hard to avoid the obvious sports metaphor.
As he discusses reshaping his team and fixing Nike’s culture, Hill sounds a lot like Nike’s head coach.
For a full tour of Nike, don’t miss my deep dive on the 48 hours I spent on campus. Below are my most pressing questions since Hill took over the company last year.
And if there’s any single takeaway, it’s that Hill doesn’t like talking about structure (despite deeply restructuring the company to drive innovation again). Instead, he wants to talk about wholesalers, sport, culture, expanding the brand, and the greater possibilities lying ahead, as the company works under a new mantra developed by his new chief innovation, design, and product officer, Phil McCartney: “Make epic shit.”
The interview has been edited for length and clarity.
I think this is my fourth trip to Nike over the past 13 years. I would say, though, the energy feels really good on campus right now—whether that’s staged or not!
By the way, that’s not by accident, right? If I may respond to that, I know that wasn’t really a question, it was a statement. But one of the first things that I, and we as a leadership team, wanted to do was to win back the locker room. You had to get back to a strong sense of purpose and culture. Because ultimately—and it’s not just Nike, I think it’s any business—I’m a firm believer that if you have the best strategy in place and the right structure and the processes but you don’t have the right culture, you’re not going to have the success that you expect, and certainly won’t meet your full potential.
So I’m glad that you at least see it and feel it. We’ve put a lot of time, energy, and effort into it.
Culture is a nebulous term.
It is.
It’s one of those words like love, which means a little bit too much, and it means something different to everyone you talk to.
No question, it does. We’re close to 80,000 employees, which is why I think it’s important to try to define the type of culture that we want and expect. And we’ve spent a lot of time doing that . . . through how we communicate, through all employee meetings, through written communication, and just how you show up day to day.
We have a book. I don’t know if you’ve seen our maxims; it’s what we believe in. There are five maxims. And then each of those maxims has three to four actions. What can I and we collectively do to help bring those maxims to life? And I know it sounds, again, pretty textbook, but if you live them and breathe them, it does start to come to life and help to define what you want the culture to be. And, more importantly, you start to see it come to life.
I am curious about structure. You completely restructured development teams when you returned to Nike. And they look like they did before [John] Donahoe, right? It seems like it’s a rewind to that structure, which was clearly proven at Nike for a long time. Is your plan fundamentally different than that?
Here’s what I would say: I’m a big believer in having clarity of purpose and strategy, and then that drives structure and processes. All of them have to work together to help deliver the type of results that we want to try to drive.
And so the first thing we wanted to do is get back to strategy. Why do we exist? And our sense of purpose is that “We exist to serve the athlete.” It’s about inspiration and innovation. For all 8 billion consumers in the world, if you have a body, you’re an athlete. And the whole idea is, if we can invite consumers, more and more athletes, into the world of sport, fitness, and lifestyle, we grow the overall marketplace. So that really anchors in sport.
Then we said, “Okay, what [is] important?” We’re a consumer products company. People buy stuff from us. So we have to have the most beautiful, innovative, and coveted product, first and foremost.
And then we’ve got to tell emotional, inspiring stories. And finally, we’ve got to pay it off in a marketplace where consumers shop. Not everybody shops Nikedirect.com or Nike digital commerce. And so that was the fourth action. We had lost how we connected with consumers down in cities that create influence. And again, whether it was cultural icons in those cities or sports icons, we lost some of that connectivity.
So those are the actions we put in place. And then you started to think, Oh, how do you do that across Men’s, Women’s, Kid’s [introduced by Donahoe], and it’s kind of hard to do! So we then decided, let’s shift. Let’s take the $45 billion-plus of revenue, and let’s break it down by brand: Nike, Jordan, Converse. What are the sports that are most important? Let’s [have] small, cross-functional teams with a general manager who are empowered to run and move at the speed of the consumer.
This is what I’m saying—that’s classic Nike structure, no? You organized the company by sport rather than the Men’s, Women’s, Kid’s teams that Donahoe adopted.
Yeah that’s classic Nike structure. But what is different is, the whole idea is it makes us more responsive with consumers and athletes, and more competitive.
Let me just say, when I reported the last feature, when Donahoe was here, the criticism I heard from people internally at Nike was “We left the structure that works.”
It’s not about structure! Everybody keeps going back to it. What is it [really] about? It’s about sports. It’s Nike running. It’s Nike basketball. It’s Nike training. It’s Nike football, soccer.
Because the consumers who play those sports are very different. There are some who cross over, but the elite consumer who runs, or the everyday runner, could be very different than the elite footballer, soccer player, and/or the everyday soccer player. So they want and need different things from us, from a product perspective and a storytelling perspective.
And oh, by the way, the competition in both of those sports is very different as well. So being structured by sport gives you the sharpness and crispness on the athlete or consumer that we’re serving, but it also gives us a sharpness and crispness against the competitive set as well.
And you empower [these teams]. You let them run.
Okay, what has changed then?
First of all, what I have done is flatten my organization, so I have 15 direct reports now; 11 of them are new roles. I’m really excited about the talent that we have in the roles from the experience that they bring, the depth of knowledge in the industry, people from outside the industry who joined us—that helps round us out.
So I’m excited about my leadership structure. The challenge that I’ve given that structure is two things: It’s pretty simple, individually and collectively. Individually, each one of us should be inspiring and aspirational. People should look up and be inspired by and aspire to be us, individually and collectively. That’s our challenge as a leadership team.
What then is different—and I’ll just jump into product: We have three brand presidents, and we have one leader over innovation, design, footwear, apparel, and accessory. The craft of making product that cuts across all three brands will enable us to leverage what I believe is one of our strongest core competencies, and that’s product management.
If we choose to add other brands, we can do that, so that then sets us up for the future. Once we get the machine running, generating the cash and the revenue that we all expect, it allows us then to leverage some of our core competencies for the future.
You just touched on something that’s been on my mind, which is this idea of Nike being such a big brand. Wall Street or analysts can criticize Nike’s growth, but it’s a gargantuan company. It is profitable, right? And it’s touching a lot of the world all the time. I guess my my curiosity is—
—and not all one percents of revenue are created equal! There’s a quote for you. Think about that. You know, no one really thinks about it: 1% of growth for us is $400 million to $500 million. That’s a company. We grow the size of a company annually!
Scaling a company your size is daunting. You bring up this possibility of introducing different brands. I wonder if there can be a sort of monolithic brand like Nike, or even two or three others like Jordan and Converse. I feel like you need even more sub brands to reach more people.
I think that might be a part of the conversation, and it’s our responsibility to set the structure up and our capabilities up, that if we choose to do that, we can do that—we can use the balance sheet to go acquire brands if we choose to. Here’s what I would say: I still think there’s tremendous opportunity in the core of our business.
I didn’t even mean acquire. I meant spin off.
Of course. Spin off and create. And we have some that we’re already starting to see, Nike ACG being one of them, going after the outdoor industry that I think is roughly $130 billion total addressable market, going at it through trail. Very unique Nike way and point of view.
Skims is another interesting opportunity. But even beyond that, we believe there’s tremendous growth still in the core. Because if you think about sport, it exists in every country, and we’re doing business in almost 190 countries. When we get down to countries, we’re not meeting our full potential.
In some of these countries, we haven’t been able to make the investments that we believe we need to make to inspire and attract the consumers in those countries as a truly global company. I could go through the list: Southeast Asia is a tremendous opportunity for us. Pick a country there, whether Malaysia, Indo—you pick it. We have tremendous opportunity to still grow there, when we run our offense, and we’re still in the process of getting our offense in place. Not only from a product creation perspective, but out into the marketplace, where we truly connect with consumers.
And the last thing I’d say, the sports industry is growing 3% to 5% a year. It’s about growing the overall marketplace versus getting worried about market share. And when we grow the marketplace, I like our chances of growing. It’s a pretty intellectual sort of conversation, but I’ve seen it work, and I believe in it.
When Trump’s tariffs were announced, I remember being like, Does Nike have to pull a lot of manufacturing out of Vietnam? Obviously, we learned in the last quarter how much tariffs are cutting into profit.
It’s significant. $1.5 billion.
How are you responding to that right now? And how much is that affecting your strategy? Is it worth shifting manufacturing internationally? Can you even get ahead of tariffs, given the changing rules week to week, given that a lot of other countries are being affected with really high tariffs, too?
[It’s] clearly making an impact. We talked about how we’ll offset it. The good news is we do have a sourcing base that we’ve built up over 50 years. It’s global, and it’s expansive, and we’re pulling each of the levers to try to offset the tariffs at a super high level, working with our manufacturing partners to share in some of those costs, our retail partners. And then ultimately we have to, as a company, share in some of that. We’re looking for efficiencies here, inside of our business and our own P and L to help offset that. So that’s what we’re doing, short term.
Longer term—you know, we can build factories anywhere. Setting up a factory and building lines, we know how to do. The challenge is, in our industry, we have tens of thousands of materials.
Yeah, exactly that. It’s the supply chain.
It’s the material sourcing that is the bottleneck. And so that is what we’re working on right now. The simple idea there, conceptually, is to go: “Well, just make fewer materials.” But then you change choice, and you put designers and innovators and creatives in a box. That’s what we’re working through right now. We’re trying to figure out, “Okay, can we, should we, and where should our manufacturing base be for the future?” And it’s definitely something that’s top of mind.
Near term, I’m just telling our team, let a few of us deal with that, and you control what you can control. And that gets back to making beautiful products and telling stories and making sure our brand looks the way it should look at retail. Because that’s how we drive sell-through. So control what you control. Let a few of us deal with the tactical—and it is some tactical—moves that we have to make around tariffs while also thinking strategically about what does the supply chain of the future look like?
I haven’t checked out your new Project Amplify powered footwear yet, but I’m anxious to. I’ve used a couple of exoskeletons. I’m really bullish on these assistive technologies. And I’m curious: How key is that more electronic, or mechanical, innovation to Nike’s innovation pipeline of the future? Is it a really big growth category for you?
We’ve yet to put a number on it in terms of growth. We’re still working through what we believe it can be. We do think it’s, without question, a big part of positioning our brand as an innovative thought leader that’s willing to think outside the box. I think the biggest [idea] we keep using as an example . . . If you look at the sales of mountain bikes versus e-bikes—if you look at the growth curve—mountain bike growth has slowed. And then e-bikes are [growing] because people want to go further faster. We think there’s an insight there. How big [Nike exoskeletons] will become, I think the consumer is ultimately going to decide.
