Nike’s recent CEO appointment of Elliott Hill, during a challenging year for the company, is a masterclass in leadership succession without internal chaos or market disruption.
This seamless leadership transition is especially significant because employees have a considerable impact on company culture and can influence the success of leadership changes. A study published inside of the Strategic Management Journal affirmed this, as they found that when employees approve of CEO leadership, there was a negative correlation with CEO dismissal.
During a time of organizational crisis, it’s also important for business leaders to communicate with and listen to their employees and stakeholders, as Nike has modeled. Refusing to do this can lead to unnecessary issues with retention. Gallup’s research affirmed this, as they found that almost a quarter of employee turnover could have been prevented if managers addressed the company’s issues.
“It’s a leader’s responsibility to set the tone and standards in the workplace, and strong leaders lead by example. The right leadership can help build an optimized workplace culture where everyone is invested in the organization’s growth. Misaligned leadership can create chaos, confusion, and a lack of employment engagement, thus affecting your bottom line,” says Marshall Terrin, a leadership consultant and business owner.
“Be the leader who inspires your team through your efforts to establish a healthy workplace culture. Your ability to handle hard times and situations where a leadership transition is reqeuired is your best opportunity to lead by example. Remember: change is not bad; it’s an opportunity for growth,” says Terrin.
Nike’s leadership shake-up and their graceful navigation of it hold valuable insights for business leaders. It illustrates the need for companies to be agile in their leadership approach, adaptable when seasons change, and innovative in their ability to cultivate a workplace culture that can persevere through stages of transition. Let’s explore three lessons from Nike’s leadership playbook that business owners and corporate leaders can use to improve workplace culture and navigate change.
Implement Smooth Transitions That Consider All Stakeholders
There are many parties impacted whenever a company undergoes change. These are the stakeholders, and they can make or break the success trajectory of the strategy that’s being implemented. Examples of stakeholders that influence the culture and morale of your company are the customers, clients, employees, board members, suppliers or shareholders. Regardless of the size of your organization, your stakeholders dictate the direction your company will go.
This is why fostering trust with those who have a vested interest in your organizations’ success, goes a long way in ensuring your company’s stability. One of the ways you can do this is by making a concentrated effort to implement a smooth transition that considers the stakeholders perception. For example, Nike demonstrated their ability to do this by deciding against abruptly removing John Donahoe from the company entirely. Alternatively, they chose to have him remain on Nike’s advisory board until January 2025. This transition minimized disruption and demonstrated respect for all the parties involved.
Recognize Your Company’s Current Season
Navigating change can be challenging for leaders, and that’s not to mention the added pressure that comes with guiding a company during tumultuous times. This is why it’s important for professionals to recognize the season that their company is in and align its direction accordingly.
Many organizations get stuck in what worked in seasons before, and have a difficult time innovating and adapting to what the market needs now. While the past holds nuggets of wisdom for the future, they can’t be the only metric of success that guides the strategy of your company. This is especially true for Nike, as they recognized that while John’s expertise was necessary during the height of the Covid-19 pandemic, his leadership style was no longer a fit for the current season that Nike is in. Different seasons in business require an adjustment of leadership styles, and this was demonstrated in how it was handled at Nike.
Revisit Successful Approaches
An under-appreciated skill that many companies overlook is revisiting methods that previously worked. Some of the reasons that this skill is overlooked are the belief that it signals a lack of creativity, absence of progress, or leadership failure. These reasons are far from the truth. I would argue that revisiting strategies that worked before are examples of what can work again, given the right circumstances.
Nike illustrates the necessity of returning to strategies that work with their replacement of Donahoe with Elliott Hill, a former Nike executive. Hill not only has a positive track record as former president of consumer and marketplace, but was also responsible for helping the company grow during his tenure there. These examples further demonstrate that an organization’s track record of successful approaches is a goldmine of valuable information.
Every decision you make in business leadership matters. Whether you’re a corporate executive or a business owner, you’ll be faced with complex decisions and tough calls. This is where reflecting on one of the lessons from Nike’s leadership crisis could be pivotal in deciding the approach you want to take. Regardless of whether you’re a small business owner or a Fortune 500 company, these observations from Nike’s leadership playbook can support you in navigating organizational change with confidence and conviction.