What’s Up in the Workplace 04: Why the Leadership Changes at Nike are a Lesson for Businesses

What’s Up in the Workplace 04: Why the Leadership Changes at Nike are a Lesson for Businesses

Lacey Partipilo and Brandon Laws discuss the recent shake up at Nike at the senior leadership level and why it’s a good lesson on diversity for other businesses.

 

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Brandon Laws: Hey Lacey, it’s good to be back so soon.

Lacey Partipilo: Yeah. I know. We just did this!

Brandon: Yeah, we did. What’s Up in the Workplace – this is our monthly segment that we’re doing, fourth episode.

Lacey: Yeah.

Brandon: And excited to talk. We’re actually going to talk about just one article. I think it’s going to be pretty meaty though. It’s national news but it’s also local news.

Lacey: It is local for us.

Brandon: We are in the Portland, Oregon area – Nike, an international company, well-known apparel company. They’re local here in the Beaverton/Portland area. And there has been a little bit of a shake-up at the senior leadership level. So they’ve had some turnover as a result of likely internal investigations.

Lacey: Yeah, and concerns.

Brandon: Yeah. So we’re basically picking apart an article here from the Portland Business Journal. This was written by Clare Duffy. April 18th, 2018, the title is “Exclusive: With Four Exec Exits Confirmed this Week, Nike Clears Way for More Diverse Leadership”.

So this article really kind of lays out – not so many detailed words but it really just kind of talks about how there were some shake-ups in very specific departments at the senior leader level and it kind of goes on to say it’s – here are some of the words. Complaints about boys’ club. They dropped the word “diversity” a few times. I think it’s because the boys’ club – white males is what the article goes on to say. And I’m curious what your thoughts are on this. There’s not a lot of detail here.

Lacey: No, there’s not. I think this is an extremely public thing for Nike to go through. I think a lot of small businesses are taking a look at these types of things. We are getting a lot of requests from clients to look at diversity initiatives. So Nike is having to do this sort of center stage.

Brandon: Yeah.

Lacey: And really what they’re looking at is that there have been some complaints about it being a boys’ club particularly around the leadership team. So saying that they haven’t really gained any traction. They have not been able to address the issues where they’ve got folks in senior leadership positions for many years. I mean some of these people are like 20 years of tenure with the organization. So some shake-ups in moving those folks out of the organization to try to get more diverse leadership in place.

Brandon: It’s interesting because this article even says – this is right from the article.

“Nike’s head of HR Monique Matheson also sent an internal memo earlier this month addressing the fact that Nike has failed to gain traction in hiring diverse talent and that Nike’s leadership is still mostly white and male.”

Why is there failure to gain traction? Can you speculate? Why is it hard to hire diverse talent? Is it just because there are some ways that you’ve had it with the company for years and years? Is it just old habits are hard to die, or what?

Lacey: I think that that’s part of it. I think when you have a leadership team that’s mostly white and male, they’ve been in place for what seems like a pretty long time, probably fairly set in their ways in terms of their hiring practices. So it’s a really popular company. I mean everybody knows who they are.

If you live in the Portland/Beaverton area, people want to work at Nike. So I don’t think that it’s necessarily about being able to attract the talent. I think maybe it has to do with more retaining the diverse talent. I was reading some other stuff on this and there are some details out there about the leadership team kind of turning a blind eye to behaviors and things that were happening.

Brandon: Yeah.

Lacey: That maybe made it uncomfortable for females to work in the organization or people that are diverse in other areas. So it comes from the top. When the leadership team is allowing that kind of stuff to occur or not encouraging diverse hiring practices, it makes it difficult to really make headway there.

Brandon: So this article says four executives exited, right? So what’s not clear to me is what happened. Was there an incident? Was it over time or was it just – it’s time for a shake-up?

Lacey: It could have been that they’re – they’re not being super transparent about that. I’m going to be really interested to see because of how public this has become.

Brandon: Yeah.

Lacey: Whether they feel like they owe the community here an explanation about some particulars. Probably not going to be so specific in terms of sharing confidential details of an internal investigation. But maybe the content of the types of concerns that were brought forward and I would imagine that shake-ups like this, there has been – there’s a significant amount of evidence either to support the need to exit these gentlemen or maybe specific things that occurred within the organization that they were a part of.

Brandon: Yeah, and maybe – maybe it wasn’t specific incidents. Maybe it was just over time the trickle-down effect of just having the same male – white males in leadership positions really just – maybe it stifled growth. Maybe that’s how they saw it. Maybe it made it uncomfortable for women. So there’s another – there’s a follow-up article. Same author Clare Duffy, Portland Business Journal. The title is “Nike Leadership Shuffle Continues with New Leaders for Women’s Running Category”.

So they’re making progress it sounds like. They’re bringing in – I don’t know if they – they might have promoted them from within.

Lacey: I think there have been some promotions there.

Brandon: So that’s great and a couple of more exits. So they’re making progress.

Lacey: They are.

Brandon: This is probably a public –it’s a response to probably the public backlash.

Lacey: I think so and I think they will be able to track any change or anything that’s happening within the organization as a result of these moves in promoting these women. So I think it’s going to be really interesting and it does – I mean from what we can tell in the article, I think most of the women that are moving up have been with the organization for a while and so providing those opportunities, what a cool thing for Nike to do.

Brandon: Yeah. So do you think just by promoting these women into these executive leaderships, do you think – is that enough to have this trickle-down effect and make it more comfortable or does real change need to happen beyond just hiring a few women in key leadership positions? Do you change your hiring practices? What do you think Nike is going through right now?

Lacey: I think that – I would imagine that their head of HR is really looking at all of their people systems. So moving two women into leadership positions is not going to change the organization. So Nike is a massive ship that to move, you think about like a ship in the ocean. It’s not going to turn quickly. So – and they’ve got practices that have been in place probably for many years and it’s not just about senior leaders making changes. Really it’s that trickle-down effect, like you said, that we’ve got to get middle management and employees onboard too.

Brandon: Yeah.

Lacey: So I would imagine they’re going to be looking at their hiring practices, how they retain employees. We may be able to bring more women in because of this – you know, these types of moves. But do we have a culture and an environment that encourages them to stay?

Brandon: Yeah.

Lacey: So I think those are things that Monique will probably be looking at.

Brandon: It’s interesting how all this stuff becomes so systemic in nature where if you – you have the same old thing forever. How it just – it can trickle down and it becomes so ingrained in what your culture has become. That’s why I always – change is hard but change is also good sometimes because if you think about it, change – you want your personnel to ebb and flow and you want your culture to sort of flow with the people that are within the organization. It doesn’t need to be rooted from 20, 30 years ago when it was first created, like Nike was first created. This goes for any organization.

The culture is going to change with your people. So you need to look at that on a regular basis.

Lacey: I think it’s the same as any organization that’s looking at how do we continue to appeal to our customers, right?

Brandon: Yeah.

Lacey: Your employees are your internal customers. So what worked 20 years ago for Nike in terms of selling their product and advertising, they’ve changed the way that they’re doing that, right? So they’re going to have to continue to look at that when it comes to their people practices as well.

Brandon: There’s a huge spotlight on Nike and they’re a huge, huge company. You know, billions in revenue, billions in sales and a huge spotlight because they’re a public company and they have investors. So all this comes to light. Whereas a company who may be going through something similar, a private company, this probably wouldn’t – you might hear of executive turnover. You probably wouldn’t hear about the details to this extent. What do you think it’s like to balance kind of the public side of this to, “I’m just trying to do my job as an investigation,” and then make lasting change without being totally scrutinized while you’re doing it.

Lacey: I would imagine that it’s incredibly difficult. So to manage an investigation like they’re probably having to do and it sounds like it’s still open. It hasn’t yet been completed.

Brandon: Yeah. It’s probably why we haven’t had too many specific details on this.

Lacey: I know. Yeah. It’s going to be really interesting to see what comes out once they have shared with the community that it’s done. So to do that even in a vacuum, even within an organization without having the media all over it, is challenging. So you add that extra layer of scrutiny and I can’t imagine having to go through that. That would not be my preference. But I – you know, surrounding yourself with experts in those fields.

So obviously they’ve got an incredible group of PR folks that are helping to support that.

Brandon: Yeah.

Lacey: Working with legal counsel to navigate what gets shared, what doesn’t. They’re responsible to their investors too. So I think some of this shake-up I imagine – you know, large companies like this, they want to make big moves to appease those folks, which I think is good. But really where the rubber meets the road is what that HR team and all of the leadership team does to continue to move forward in terms of diversity initiatives.

Brandon: At the end of the day, they would want a high-performing and great culture. Nike has been really known for its people.

Lacey: They have.

Brandon: And its great product. And you can’t have great products without really good people doing really awesome work. So I mean all this is – it’s probably in response to appeasing the investors as you said. But I think they really do care about the culture. So if I’m going to make some assumptions, I think they really want this great culture. And change is good in this case.

Lacey: Yeah, it’s going to be kind of fun to watch and see and obviously it’s a local company here for us. So to see what changes that they’re able to bring forward and what that does to the talent market too because unemployment rates are low here too. So they’re having similar struggles that smaller businesses do to attract talent.

Brandon: So if this same situation happens to a smaller company, what do you think they go through? They don’t have the same resources as the Nikes of the world. So translate this to our audience. What does this mean?

Lacey: I mean they’ve got a massive team of HR professionals that are skilled in navigating these things. So that’s one thing. A small business doesn’t necessarily always have that expertise.

Brandon: Yeah.

Lacey: So we find that our clients are leaning into us when that happens. That’s sort of the value I think of the program.

Brandon: Sure, yeah.

Lacey: You don’t always have a big investigation. But when you do, you want an HR business partner that can support you. So I think that’s probably one difference. I would also say you – in a small company, removing one person in a leadership position, especially whose got 20 years of tenure – that is historical knowledge that is lost.

Brandon: Yeah. But hopefully that leader was – you know, giving that knowledge down to the people below.

Lacey: You hope. When one person is out, even out sick for a couple of days in a smaller company, people feel that. So you’ve got let’s say an immediate exit of someone. That has an impact and then just rebuilding trust too. So I think about that, just the outcome of this. So Nike is really admitting pretty publicly here that we’ve got a problem. We’re going to be specific about the problem being around diversity and now we’ve got to work to rebrand who we are to our employees. So small businesses have to go through that too and work to retain the employees and find creative ways to do that.

Brandon: Yeah. Now I think that’s admirable to admit a mistake, say there is an issue and then say, “Maybe we don’t know what we’re going to do next. But we’re going to put a plan together and we are going to make change because we care about –”

Lacey: I think other companies have done that too. We’ve seen it like with NBC and some of the changes that they’ve made.

Brandon: Yes, that’s right, and they make quick change too. I think that’s the thing is you can’t let it fester and just let it keep being an issue because –

Lacey: Right.

Brandon: You don’t make it comfortable for the other employees to be there.

Lacey: Right. That would be maybe something that seems unique to me in a larger organization that’s pretty public is the changes feel really set in, a quick exit of somebody who is a pretty public figure. But what we don’t know is what has gone on maybe behind the scenes and the risks if they don’t make a quick change and just things getting leaked. I think they’re more at risk for that than a smaller organization. But I think the message really should be to all companies out there – if this kind of stuff is happening, you’ve got to do something about it.

Brandon: Absolutely.

Lacey: Things don’t generally get better on their own.

Brandon: Yeah. So I mean since the first article came out in the Portland Business Journal, this was April 18 and today we’re sitting mid-May. It’s the 15th of May right now. So it’s a month down the road and they’ve made change happen pretty fast.

Lacey: They have, big change.

Brandon: Yeah. So I think that’s probably the lesson for anybody listening to this is like if you’ve got issues, probably make changes pretty fast. Would you agree?

Lacey: Yeah, be strategic about it. Think about the impacts. Surround yourself with really smart, business-minded people that can help you navigate through it. But yeah, if you are noticing that something needs to happen, do something about it.

Brandon: Yeah.

Lacey: I think we should continue to follow this.

Brandon: Yeah.

Lacey: And pay attention to what’s happening out there.

Brandon: What’s your overall thought on what companies like Nike just ran into where it became a boys’ – a good old boys’ club as this article says? These are the words in the article.

Lacey: I’ve heard that before.

Brandon: I don’t know what the culture is there. I’ve never worked there. I’ve never really set foot inside there. But for companies that end up in that situation where it is a good old boys’ club, how do you recognize that and how do you do something about that?

Lacey: You know, paying attention to what type of employees we are attracting, how we are able to retain. You know, in this case, we’re talking about gender. So how can we make the culture and our practices support females in the workplace? So getting creative around that. There are a lot of, at least locally here in Portland, organizations that are really trying to help and support with that. So I think about the Technology Association of Oregon and some of the things that they’re doing just to get women into tech. I have some clients that are pretty involved in that too.

Acknowledging that it’s an issue for you is sort of the first step I think in any sort of like – you know, working to recover through something. And then finding ways to look at each individual issue that’s contributing towards that boys’ club, because it could be a lot of different things in one organization, but what is happening is probably different than another organization. An just chipping away. Small, little steps make an impact.

Brandon: It seems like there are two main issues with the diversity thing and there’s probably way more. But I’m thinking, on one side you have this situation where you make it uncomfortable for other people or you limit the opportunity for a more diverse workforce to go up through the ranks because people who have been in power forever have stayed in power. So maybe this is affecting culture.

And then the other thing is the attraction and retention of talent, right? So you might have more diverse minds as well as diverse people, people that don’t look necessarily like you. You know, more women leaders. You know, those sorts of things. And without having that within your culture, I think you’re going to limit the ability to attract people.

Lacey: Yeah.

Brandon: I don’t know which one comes first. How do we bring diversity into our workplace and then we’re going to be able to attract people like that later on. I don’t know what comes first. I don’t know how you make that change.

Lacey: Yeah. It’s the chicken or the egg.

Brandon: It seriously is. It’s complicated. But I think if companies aren’t addressing this now, it becomes a much bigger problem later on.

Lacey: Yeah, I agree. I think – like I said, really being mindful that it is a problem for your organization and taking intentional steps to attract certain demographics, or to just increase diversity overall, working with professionals who specialize in this and dealing with the culture that exists within the organization should be all happening at the same time. So I think it sort of in tandem addresses the issues, the jokes, the behavior that’s happening that makes it maybe uncomfortable for a female to work within the four walls of your business, and going out and really trying to find those folks that can help improve the diversity within your company.

Brandon: Well said. Anything else you want to talk about on this subject?

Lacey: No, I’m going to be watching, especially because the article that came out last week talks about that the investigation should be complete in the coming days.

Brandon: Yeah.

Lacey: So maybe we will have an update at some point this week from Mark Parker, their CEO.

Brandon: Yeah. I love Nike, the apparel. I love the company. They stand for everything I’ve loved and hearing stuff like this is really hard to swallow.

Lacey: I know.

Brandon: It’s unfortunate that they had to go through something like this, and let it happen. But what I appreciate is that it seems like there’s quick change happening, just on the surface. Again, we’re pretty spotty on the details of this. But from what I can see, it looks like they really want to make rooted change, so that way they can be a great company later on.

Lacey: Yeah. So we will kind of see where they take it from here and what other changes, other than just moving folks out, that they’re able to make.

Brandon: Awesome. Well, it was fun to discuss this, Lacey.

Lacey: Yeah.

Brandon: Where can people find you?

Lacey: I’m on LinkedIn. So you guys can find me on there.

Brandon: Cool. Yeah, same here and we will catch you guys next week.

Portland Business Journal articles referenced in this podcast:

Four more execs out at Nike, pushing total to 10 since misconduct investigation began

Nike leadership shuffle continues with new leaders for women’s, running categories

Three more senior exits at Nike, bringing the total to nine, start to raise questions with analysts

Brandon Laws

As Director of Marketing, Brandon Laws leads all marketing efforts for Xenium, providing oversight on all marketing campaigns, digital marketing strategy, events, sponsorships and public relations. Brandon brings a positive energy to every aspect of his role at Xenium—from internal initiatives around culture and wellness to industry thought leadership through the Xenium podcast and other social efforts. Active within the HR community, he currently volunteers on the board of the Portland Human Resource Management Association as the Director of Marketing & PR.

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