3 Reasons Why Nike is Effective at Driving Growth
One of my favorite companies to watch is Nike. They keep doing things right, including driving growth at more than 10 percent annually even with sales of $30.6 billion last year.
But that’s not what inspires me; their big numbers are just evidence of their effectiveness. What’s inspiring about them is three-fold — their mission, strategy and customer focus.
1. Mission
Their mission is to “bring inspiration and innovation to every athlete* in the world (*if you have a body, you’re an athlete).”
Like other great branding firms, Nike understands that they are not in the business of selling athletic shoes and apparel. Instead, they inspire people to become better athletes and achieve their personal best (Just Do It!).
All great brands recognize that their products and services are ultimately just vehicles for addressing higher aspirational needs. By defining their business according to what customers aspire to accomplish rather than limiting their identity to current products, Nike also encourages employees to innovate and explore new and better ways to fulfill their mission to “bring inspiration and innovation to every athlete.” This now goes well beyond athletic shoes and apparel, well beyond anything founder Phil Knight could have imagined.
2. Strategy
Additionally, a key part of Nike’s strategy is its “category offense.” In 2008, the company reorganized operations around individual sports and, according to Nike, sales have risen 70 percent since. They dominate the athletic shoe market in many different sports, blitzing the nearest competitor with 62 percent market share vs. Skechers’ 5 percent.
3. Customer focus
According to Mark Palmer, Nike’s CEO, the reason they are so successful with each market is their focus on the athletes’ needs in each sport or, in my vernacular, according to what athletes in each sport are trying to accomplish.
Nike embeds researchers within sports teams at different levels. The researchers observe what athletes are trying to accomplish and identify where certain products may fall short in helping the athletes achieve those objectives.
Sometimes existing products aren’t sufficient, and sometimes the void is unfulfilled due to the absence of a product. This insight into their target customers’ unmet needs enables Nike to bring to bear their full array of technologies and capabilities on the biggest opportunities in the market, thereby fulfilling their mission “to bring inspiration and innovation” to athletes, and dominating their markets.
Lessons we can learn
There are important lessons for all of us in this. First, never define your business according to the product, service, or technology you sell; they are just means to a greater end. Instead, sell the aspirational goal that your solution enables customers to achieve.
Second, implement your own category offense by determining all the tasks your target customers are trying to accomplish within your strategic domain, and where they struggle given current solutions. The insights you discover can enable you to bring to bear your full array of capabilities on what matters most to customers, generate new and improved solutions, and establish competitive advantage.
(This article first appeared in The Business Journals, June 28, 2016)
TIGER Talk – June 24, 2016
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