Organizational Change
Nike could have avoided the downturn had it been more receptive to ongoing change. One of the things it could have done differently was to "periodically analyze the organizational environment and identify forces for change." It is evident that Nike did not do this until it saw its sales slump. There were several underperforming divisions, and more importantly there were several untapped new product areas. An environmental scan would have allowed Nike to identify those much sooner, and perhaps respond more quickly. By being slow to respond to its external environment, Nike put itself in a more vulnerable position. Nike was forced in the to embark on revolutionary change, rather than evolutionary, because of its slow response. Ultimately, it could have adopted the revolutionary approach by being in tune with its environment, and by creating an organizational culture that was in general more receptive to change.
That said, even when Phil Knight recognized the need for change, he had trouble creating the motivation for change. Nike had a strong track record, and there were still many things that the company was doing right. As such, the designers in particular were resistant to change. They were set in their ways, believed their own hype, and essentially were slaves to organizational inertia. An organizational confrontation meeting -- or a regular series of these during the revolutionary change described above, would have helped Nike be more open to change. One of the most important traits of an organizational change meeting is that it is forward-looking. The company and its people are challenged to look to the future, rather than to continually examine the past. The mindset of the Nike managers, the idea that they were successful in the past and that was good enough, was toxic for the company during this period. If these designers and managers had been continually thinking forward, they would have recognized the trends earlier, been more receptive to change, better embraced the company's role as design leaders and possibly even pre-empted the arrival of some of the new competitors.
Ultimately, the issue for Nike was that it had such a long, sustained run...
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