The culture of an organization has a lot of bearing on the functioning of the organization. An organization’s culture consists of values, beliefs, and norms which influence with behaviour of the people who are working with it. According to Kotter and Cohen (1992), organizations have different types of cultures and subcultures. Past research has demonstrated that culture is one of the six key factors that contribute to the long-term success of the organization. An organization’s culture can also have a significant on the organization’s bottom-line, i.e. the financial performance of the organization. Unlike other aspects of an organization like its marketing strategy, the culture of an organization would be built over a long period of time. The values which are believed even by the founders of the organization will also determine the value system that will be followed by the organization. Since the culture of an organization would be generally built over a long period of time, it is very difficult for managers to change like it is done in the case of regular organization’s policies. The current report details the culture management at Nike and the way it is practiced.
CULTURE MANAGEMENT AT NIKE
Nike was found in the year 1962 and has been emerged as one of the leading manufacturer of sports related products. Right from the days when the company was founded, Nike focused on developing a creative culture that focuses on harnessing innovation and inspire new innovative ideas. It has created a vibrant corporate culture rich with employee loyalty and team spirit. Red ‘Swooshes’, its brand logo, were seen at every place at the company’s headquarters in Beaverton, Oregon. It adopted a team management approach where employees were referred to as players, headquarters as campus, managers as coaches, and meetings as huddles. Thirteen after the company was founded (in the year 1985), the company faced new competition from innovative multi-coloured shoes from is competitor Reebok. Nike realised that it didn’t have any innovative ideas to effectively counter competition from Reebok. It was then that Nike came out with the idea of redesigning its culture around innovation called as the Nike way of life. Since then, Nike had embarked on a culture management approach through which it strived to achieve an inner culture that reflected this new mantra. Culture management at Nike got a further boost when Mark Parker took over as the CEO of Nike in the year 2006. Parker believed in reinvigorating the culture of Nike on a regular basis.
PRACTICE OF CULTURE MANAGEMENT AT NIKE
The ultimate aim of culture management at Nike is to build a strong culture of innovation in the organization so that it can stay ahead of competition (Krentzman 1997). Below are some of the ways in which culture management is practised at Nike which created a strong sense of purpose and motivation among the employees ultimately leading to its excellence and progress in the long-term:
INVESTING IN PEOPLE
In order to spread the culture of innovation, Nike believes in investing in its people heavily. Nike’s employees are trained in all the requisite skills necessary for their continued growth in the organization. A general problem faced by many other organizations who also invest heavily in training and development for its employees is the lack of interest among employees to attend the training classes. In order to overcome this difficulty Nike tries to recruit only those factory workers who have expressed some interest in educational programs. At all of its factories across the world, Nike offers junior and high school equivalent courses for its workers. The end result of all this was that Nike has a highly talented employee pool at all times and it hires most of the senior team from within the organization (Nike, n.d.). Training and development of an innovative and dedicated workforce resulted in ensuring the growth and continuity of the company for the long period into the future. Another advantage of investing in its employees as part of their culture is the high employee retention rates enjoyed by Nike. People continued working at Nike for so long periods that, any employee who has been working for a period of less than 10 years in the organization is called a ‘rookie’ (Jackson 2013).
LISTENING TO THE EMPLOYEES
Listening to the ideas and opinions of the employees can play a vital part in Nike’s culture of innovation. The management of the company has created an open door policy where employees working at the low and mid-levels of the organization can freely communicate the ideas with the tops management. Nike had traditionally followed a team management approach where employees work as a group for the purpose of achieving the goals set up by the organization. In order to listen to the opinions of these various groups of employees, Nike has set up an upward feedback tool called ‘Manager 90’ that makes it easy for team managers to pass on the insights they get to the top management (Nike, n.d.).
INSPIRE IDEAS THAT IGNITE INNOVATION
In order to further the innovation centric nature of the organization, Nike created a practice where new ideas are inspired that can ignite more innovation in the future (Nike, n.d.). Nike creates new and creative models of engagement, Nike equipped its leaders and teams with tools to foster a culture of innovation and openness. New perspectives and ideas from anyone in the organization are summoned, received, and considered for implementation. Nike considers that more ideas lead to better ideas and better ideas foster innovation in the organization.
MAKING THE TOP MANAGERS COMMITTED TO CULTURE
In the book Blue Ocean strategy, Kim and Mauborgne (2005) suggest a tipping point approach for successfully managing the culture of an organization. According to this approach, the people who have some significant influence on the functioning of the organization like senior managers and vice presidents should be committed to its culture. Once these people embrace the culture of the organization to their heart, the achievements made by them by committing to culture should be put under spotlight so that others too could follow them. Nike too follows the same approach by making the top managers of the organization committed to the culture of the organization. Stories of success by senior managers are given legendary status and are told and retold to the employees of the organization again and again. This creates a sense of belongingness among the employees of Nike and increases their retention levels.
CORPORTE SOCIAL RESPONSIBILITY
Other than the focus on innovation, Nike made corporate responsibility as part of its organizational culture. The company continually sponsors a lot of development projects in developing countries and strives to grow in a sustainable economy where people, money, and the planet are in perfect balance (Nike CSR, n.d.). It also created different avenues for the employees to be a part of the company’s social responsibility initiatives. Unique platforms created for its employees like Nike WE Portal and Nike Employee Grant Fund where its employees can participate and contribute to the initiatives of the company. An active participation in the community related programs gave Nike an image of a responsible citizen in the eyes of both the employees and the society in general.
EMPOWERMENT AND PARTICIPATION
Employee empowerment results in employees owning the work and do and take responsibility for the end results (Menon 2001). Some of the above specified ingredients of help in improving empowerment and participation of employees at Nike.
Initiatives like ‘Manager 90’ empowered the employees to openly express their ideas and opinions. The resulting increased participation of employees in the innovation process of the organization made them realise the importance of the work they are doing. The result is that more than other organizations, employees at Nike believed that what they doing was valuable and important enough to be protected (Jackson 2013). As part of the commitment to listen its employees in decision making, Nike organized a series of group exercises and brain storming sessions regarding the future of sustainability at the company in 2005 (Nike CSR, n.d.). The inclusive nature of these exercises meant that employees from all the departments of Nike could freely participate in them. A scenario planning conducted by bringing some external voices concluded that the way business was conducted at that time would not serve the interests of the company in future. Insights from those exercises helped Nike to shape its vision on sustainability and empowered employees in delivering it.
The platforms created by Nike in order to make its employees as a part of the corporate social responsibility initiatives increase the participation of employees and empower them to be a part of sustainable change. The Nike WE Portal is now used by nearly 7,000 of its global employees to donate their time and resources (Webb 2010). Nike WE Portal allows its employees to exchange the donations they make for products of Nike. Similarly, Nike Employee Grant Funds makes it possible for employees to donate up to US$ 500,000 per year to local non-profits and schools. For Nike, both the WE Portal and the Nike Employee Grant Fund empower employees and help in fostering a more creative and innovative employees.
Despite the value given to the opinions of employees, some of the high end decision making at Nike is still restricted to top level managers. While creative idea generation is open to all the employees of the organization, the people who curate the ideas and make the decisions is a closed group of top level employees of the organization. Nike could do better to open the top level decision making to the employees so that they can feel more empowered. An open voting system where all the pooled ideas from the employees are voted before taking the final decision is one way to make the employees more empowered.
- Jackson, L 2013, Strong Organizational culture: How Nike drives innovation. Available from: < http://www.corporateculturepros.com/>. [26 April 2014].
- Kotter, JP, & Cohen, DS 2002, The Heart of Change. Harvard Business School Press, Boston.
- Krentzman, J 1997, The force behind the Nike Empire. Available from: <http://alumni.stanford.edu/get/page/magazine/article/?article_id=43087>. [26 April 2014].
- Mauborgne, R, & Kim, WC 2005, Blue ocean strategy. Harvard Business School Press, Boston.
- Menon, S 1997, ‘Employee empowerment: An integrative psychological approach’, Applied Psychology, vol. 50, no. 1, pp. 153-180.
- Nike, n.d., People & culture. Available from: < http://www.nikeresponsibility.com/>. [26 April 2014].
- Nike CSR, n.d., Corporate responsibility report. Available from: < http://www.nikebiz.com/crreport/>. [26 April 2014].
- Webb, K 2010, Empower employees for sustainable change. Available from: < http://www.sustainablebusinessoregon.com/>. [26 April 2014].