Nike’s boss says remote work was hurting innovation, so the company realigned and is ‘ruthlessly’ focused on building a disruptive pipeline

In a recent interview with CNBC, Nike CEO John Donahoe shared insights on the company’s innovation strategies and performance trends. Donahoe pointed out that while Nike has seen steady revenue growth of 9% over the past four years in constant currency terms, largely driven by gradual, iterative innovation, the company faced challenges with bold, disruptive innovations during the remote work period. 

**Impact of Remote Working on Innovation:**

- According to Donahoe, significant product innovations were stifled when employees worked remotely during the pandemic. He cited the closure of factories in Vietnam for three months as one of the logistical challenges, but he emphasized that the remote work environment posed significant obstacles to creative collaboration necessary for breakthrough innovations.

- "It turns out, it’s really hard to do bold, disruptive innovation, to develop a boldly disruptive shoe on Zoom,” Donahoe remarked, reflecting on the challenges faced while employees worked from home.

**Realigning for Innovation:**

- 18 months ago, teams at Nike returned to in-person work, which helped them realize the gaps in their innovation processes when working remotely. 

- In response, Nike realigned its structure to aggressively rebuild both its disruptive and iterative innovation pipelines. Donahoe asserts that their innovation pipeline is now stronger than ever.

**Organizational Changes and Future Directions:**

- Despite the strong pace of innovation, Nike announced a broad restructuring plan to cut costs by $2 billion over the next three years, prompted partially by weaker consumer demand. 

- Additionally, in February, Nike revealed plans to reduce its workforce by 2%, amounting to over 1,500 employees. Donahoe attributed some of the performance issues to leadership decisions, including his own.

**Debate over Work Models and Product Showcases:**

- Donahoe’s endorsement of in-office work adds to the ongoing debate about the future of work, contrasting with the popular sentiment among many workers who prefer remote or hybrid models. Despite preferences, the frequency of in-office days at major American companies has increased significantly since 2021.

- Amidst this strategic shift, Nike is set to display its innovative products at the upcoming summer Olympics in Paris, showcasing top athletes in Nike gear, a testament to their continued focus on advancing sports technology, particularly in running shoes, where Nike claims to lead with significant innovations over any other brand.

This focused approach to melding in-office collaboration with strategic cost management and innovation prioritization highlights Nike’s adaptive strategies in the face of changing work dynamics and market challenges.  

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