In a Business Insider report from Matt Kish, the article discusses the loss of long-time employees at Nike. With people leaving the Berm who helped build the culture, there is concern that this could create a disconnect between the brand and its fans. “By financial metrics, Nike CEO John Donahoe is a success, but insiders worry about losses of veteran employees and erosion of the company’s culture.” Source: Nike CEO’s first 2 years have sent its stock soaring, but insiders worry about a talent exodus
But, what if the talent exodus of the old guard is simply a result of fine tuning and pruning old leaves for bigger blooms? Over the last six years I’ve been keeping a running tab on patents, trademarks and acquisitions by Nike. One of those acquisitions was of Grabit:
Grabit, allowed for an expedited ability to create footwear. This diminishes the need for certain positions within the company. Technology is a beautiful thing for businesses, but it isn’t a beautiful thing for employees. Technology allows for a company to generate more profit with fewer employees. Take a second to consider how much money Amazon makes with fewer employees and you begin to understand what’s happening here. You also need to consider that the Grabit Technology, along with Nike’s investment in renewable energy, is informing a lot of the development of distribution centers beyond Memphis:
Here is an important point, the tech from Grabit also applies to warehouse work and productivity solutions. When facets of the supply chain are improved, fewer employees are needed. Combine this information with Nike’s recent discussion on Supply Chain Innovation and quite possibly employees leaving the company could be a symptom of a faster operating machine.
Agile and creative approaches will pay off now and in the future. Source: Nike Supply Chain Innovation
“Within distribution centers, Nike has also deployed more than 1,000 “cobots” (collaborative robots) to aid Nike teammates in the sorting, packing and movement of products, increasing speed in order processing, alleviating physical challenges and allowing teammates to focus on higher-value activities.”
While the focus has been on C-Suite types, VPs and upper management leaving, the reduction in redundant roles at Nike also has to be considered. If product can be made faster, there isn’t a need for the same amount of employees. There is a need for more tech centered employees. A quick look at Nike’s job openings verifies this point. There are over 14 pages of job listings, with 30 jobs listed for people in technology. That’s 420 job openings for tech… an area where older Nike team members simply aren’t capable of filling. Nike is a well-oiled machine. While employees are leaving, it could be opening the door for new employees who will bring fresh ideas and execution into a company looking towards the next chapter. When you consider that hiring has always seemed like an internal, nepotism setup where if you didn’t know the right person, you couldn’t get in the door, Nike may be entering an era where employee competitiveness drives growth. I mean, think about it. Nike isn’t competing against other brands. The company is competing against its own benchmarks. You don’t beat those measurements with what has always worked.
UPDATE: After posting this discussion, I was able to connect to a few former Nike Team members who stated that there are a lot of internal adjustments taking place at the Swoosh. In 2020, after realignment, a number of employees stepped down as some employees had been moved into positions they weren’t interested in. The following quote offers considerable insight into some of the people inside the company:
“Nike is very against remote work (even though… they are testing it with a few departments) as campus is so much a part of the culture. And yes, campus is amazing, but is that what the new generation wants, I don’t think so. Nike is losing a ton of its engineering talent b/c they have to be in Portland vs other companies that let you work remotely.”
Nike is usually seen as a very progressive company in the public eye, but after writing a piece that places the Swoosh in a more positive light, I have to include some first-person information and perspective. If Nike is indeed losing employees because of WFH and the lack of Remote opportunities, then what is happening in Memphis is a completely different animal. According to employees Nike warehouse workers don’t have to be vaccinated like Nike Store employees. In Memphis, the warehouse and distribution is so intertwined with the stores, Nike Factory, Clearance and Employee, information spreads quickly from one branch to another. As unvaccinated store employees are no longer being scheduled to work, they are questioning why warehouse employees aren’t being held to the same standard. This means that Nike is playing a difficult game of balancing efficiency with a failure to consider the best interest of the people at the lowest end of the employee pool. Memphis is barely 50% vaccinated; one of the lowest rates in the U.S.