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Volume 22 No. 18
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For Knight, early hardships shaped Nike’s culture

Nike announced on June 30 that co-founder Phil Knight had retired from the company’s board of directors. Hours before the announcement, Knight spoke with SportsBusiness Journal correspondent Matthew Kish. In a wide-ranging interview, Knight (who will now carry the title chairman emeritus at Nike) discussed the company’s history, its corporate culture, and the advice he’d give to CEO Mark Parker, his successor as chairman.
Following are excerpts. Read more from the interview here.

After a meeting with Japan’s Onitsuka company in 1962, you spent $26.56 on samples and became an importer of Japanese track shoes. After the meeting, you thought, “This was a business situation which had a lot of potential,” according to a 1974 deposition. What made you so confident?

“I had the best job in the world. If I was
feeling sorry for myself, it was my own fault.
I could make my own hours.”

Photo by: GETTY IMAGES
KNIGHT: It was basically [a] paper I had written at Stanford which kind of made up a company from nothing on the premise that Japanese athletic shoes could compete with German shoes. When I walked into Onitsuka and found someone that was not only thinking that way but already produced samples, it was just everything I could hope for. It spoke to what the paper had concluded.

In your 1982 shareholder letter, you wrote it was critical to Nike’s success to observe the management style of Japanese companies. As you look back today, how important has Nike’s Japanese heritage been to its continued success?

KNIGHT: Very. Obviously in the early years of Nike, our product, and then ultimately our key financing, came from Japan. We had exposure to the management of various Japanese companies. They operated well. They had a very collaborative style. When we would talk about what was our style, we said we couldn’t be Japanese but we could be collaborative, and what better lesson than that is teamwork off the athletic field.

In 1965, you worked 50 to 55 hours a week at Price Waterhouse, talked to coaches on lunch breaks and spent weekends selling shoes at track meets. As far as I can tell, you didn’t take a draw on company profits until 1969, when you bought a house. How did those lean early years shape you and shape Nike?

KNIGHT: The hardships of the early years [including a lawsuit against Onitsuka and customs fights], all of those things tempered what was to become Nike. It’s a big part of our culture today and it’s part of our success.

What was the key lesson then? Overcoming adversity?

KNIGHT: Yes. Learning the lessons firsthand. Not reading them in a book.

In the 1991 book “Swoosh,” it’s reported you discussed selling Nike in 1983. It also claims in 1986 you “stopped just short of signing a letter of intent to sell.” How close did you come to selling the company?

KNIGHT: I don’t remember two times. I do remember that I had two conversations at one time in that time span. It was only a couple of conversations, and I never really came close. In some ways, business was getting hard. Those who had ownership could make a lot of money and they wouldn’t have to go through the hardship. But at the end of the day, as I got into the reality of having to sell it, I said, “When my grandkids ask what I did, and I say I founded Nike, and they say what’s that?” — that ended the discussion.

Nike has been criticized for its role in the commercialization of athletics. You addressed the criticisms eloquently after the Atlanta Olympics in your 1996 shareholder letter. What do you say to the critics today?

KNIGHT: The idea that Nike is responsible for the commercialization of athletics is frankly absurd. If there was no Nike, athletics wouldn’t be any less commercial. As much as anything, it’s television-driven. There’s nothing quite like a great athletic event for drama. The prices for TV rights to sporting events keep going up, and that’s what drives it more than anything.

You are a somewhat singular figure in the history of American business. You founded a company and steered it from infancy to global icon. How did you manage to stay motivated and engaged?

KNIGHT: There have been times where I’ve talked about burnout and there was the conversation about selling the company. But at the end of the day, I had the best job in the world. If I was feeling sorry for myself, it was my own fault. I could make my own hours.

I think for everyone else, and for the young people working here today — we have thousands of applications every month — it’s the most interesting industry. It’s the most interesting work. At the end of the day, if you can’t keep yourself motivated here, you have a problem.

Can you share anything about what advice you will offer to Mark Parker, your successor as chairman?

KNIGHT: Yes I can. Absolutely nothing. Mark Parker and I have worked together for almost 40 years. He finishes my thoughts before I even know I’m having them sometimes. When he becomes chairman, I won’t have any words of advice for him at that time as he’s already gotten any wisdom I’ve got.

Matthew Kish writes for the Portland Business Journal, an affiliated publication.