Dean Speaker Series | Elliott Hill | President & CEO, Nike, Inc.

That was a little strange for him to call me Elliott. Yeah. Yeah. I don't think he ever has to, Joe. I'm E. That's what he calls me. So, I thought you would have thrown one of those in. But anyway, thank you, Joe.

I think I counted you... have to watch to the end here. 34. Oops. Oh, there's a Hoka in there. So, I thought I had 34, but I have 33.

Yeah. I think I may buy four to five pair of running shoes a year. Thank you. Let's say it's been 13 years. No, that's not true. How can we get that to six or seven now? That's what we got to... No, it's been like two or 300 pair just just me. And now I have to go on the internet because I need to look for those Air Max 2017s.

No, no. Hey, by the way, there's nothing better than a third party authenticator telling you brand keep going.

Thank you so much for having me. I think equally as important, thank you for the lifelong testimonial that you just gave. But you know what's interesting? You know, I think everybody here takes that one photo of you running with all men, you kind of take it for granted today that when you go out and run a 5K or a marathon that of course it's half and now, by the way, more women than men. It wasn't until 1984 that women were even allowed to run the marathon. Yeah. In the Olympics. Think about that for a second. And so, it's just interesting how and exciting to see how far we've come. But anyway, thank you for sharing the journey with us.

I was close, but I wasn't that deep. So, in the backstage, she said, 'I have a surprise for you.' And I go in my head, I said, 'I think I know you're a runner. I knew some things about running at CU Boulder.' Right. Yes. And I knew that you had a relationship with Nike, but I didn't know that you still have all those shoes. Well, that was just... We have a house in Tahoe and there are a bunch more there, but I didn't count those. So, good. Let's get another house.

So I grew up playing sports like a lot of kids in our neighborhood where I grew up. I grew up in a middle class neighborhood in Austin, Texas. And was raised by a single mom and she kept me busy. Whatever the season was, I was participating in sports and that kind of became my second home, you know, away from home, being around my friends and so sport was always a part of my life including went to university. I wasn't good enough to play a division one level, but I worked as an athletic trainer, worked my way through school. Coming out of school, I knew I wanted to be in sports but I didn't really know what that meant. And so I worked for the Dallas Cowboys, grad school, and then ended up at Nike.

And to answer your question specifically, I think, you know, why sports for me, it's always about potential. You know, someone pushing themselves to run a marathon, to have your best PR in the 10K. It's about working as a team with common goals. And so, it was only natural that I wanted that kind of environment to be a part of the place that I built my career. And that's why I ended up at Nike. And so I think the message for all of you is whatever you're passionate about and it can be as bold and that's what it was for me is I want to work in the world of sports. I didn't know what that meant but I took a job with the Dallas Cowboys as an athletic trainer knowing that's not what I wanted to do but it got me into sports which then led me to grad school in the world of sports which then led me to doing a paper all night. So the point there is whatever you're interested in, chase it. Start with a big dream and then just don't look for perfection that first job. But get some experience and then continue to move on. So anyway, it's been a wild journey.

Well, when I left, I truly thought I was retiring. So, but here, how about I'll start this. How many of you worked and then came to graduate school? Raise your hand. Yeah. And then I want you to think about that time period from when you finish undergrad till you worked to how different you approached school now having that window. Think about that for a second. How important that window was to you emotionally, whatever you needed physically, you needed a break and that's I think I didn't intend to come back to work, all right, I retired, but what I would say is that break helped me in a lot of ways personally, ability to reset physically.

I'd been working 32 years, I'd flown 4 million miles, 114 quarters, I had a number and a deadline to deliver a number. It just kept getting bigger and bigger and bigger and I ended up running the P&Ls for seven years. It helped me reconnect with my family, my friends, my hometown. I hadn't been there for 39 years. It helped me dream and chase. I started a baseball team. I play baseball now. I started a music festival. I started a nonprofit. And I got to do the things that I had always thought about. And so that gave me perspective.

To answer your question specifically, I became a consumer, right? And so now all of a sudden I'm in the world. I'm not working there. I'm a consumer. But sadly I still do shoe count. I don't know if you noticed me looking down. Did you notice me when I walked in? It never leaves you. So even when I was retired, I was doing shoe counts and I knew something was a little off because you could just see the market share and the innovation. I mean, you guys could have worn your Nikes today, right? Like not judging, but so I think it helped me get a perspective personally and then professionally becoming a consumer again, I think has helped me as I've entered in as the CEO role, and I'm sure we'll talk about as we get through it, the importance of we call it the athlete, putting the athlete at the center of every decision we make, and that helps steer and guide where we're heading strategically.

If it's okay, I'm going to maybe take all of you on a bit of a journey. So, I was fortunate that I got in with Nike in 1988 when it was still fairly young and about to grow. And it was pretty much a US-based business, primarily footwear when I joined. And I knew it was the place I wanted to be. And I never dreamed I'd sit in this chair. I didn't have the vision, the audacity. But I always had I was curious. I like to learn. I like to grow. I like to develop. And I always had like I could look two steps ahead of me. And so I saw the company starting to diversify revenue outside of the United States. And about this is now around year 8 for me. So call it '96. And at the end of you if you start doing reviews when you get reviews, performance reviews, have a force yourself to have a career conversation with your manager at the end of the year. I started doing that and I started I want to go to Europe or I want to go to international, I said international I'd go anywhere at the time we had an office in Hong Kong anyway long story short I end up in Europe and part of it was it was personal because we wanted to have that journey but it was also strategic in terms of my career development because I could see the company starting to become more global.

So, we were fortunate. Nike does a really nice job of moving talent around the world, not just us to out, but Europeans in and Asians and wherever country. And I got to go on that journey. And you want to talk about life-changing. Those we were there almost 5 years were transformational. I use that word. It was transformational for us as a family. My wife and I, our friends, but then me from a professional perspective. There was a moment when I was managing 12 people and they were from eight different countries. And I know you probably do that when you guys have your small group sessions where you got to manage cultures, language barriers, perspectives, geopolitical ideology, all those sort of things. And so it was transformational for me in terms of learning how to have a more global perspective, be open to thoughts, ideas, and again I think it was without a doubt the best five years of my life and an unbelievable investment of time and I'm grateful that Nike invested in me. Yeah. Frankly.

So let me start with before the pandemic and I was still there. We were making a move to be quote more direct to consumer and I think it was a lot of brands it's important to have direct relationships with fans like yourself and be in your closet. And I think strategically why do you want to have a direct relationship with a consumer is you don't want to get disintermediated right? And so there was an idea that our business would become more direct to consumer but we were going to let it happen naturally we were going to have to earn the right for the consumer to shop directly with us.

The pandemic hits, supply gets constrained because manufacturing shuts down, demand goes through the roof, physical retail gets shut down, the team rightfully so had to survive. They're in survival mode. I'm not there, by the way. I'm retired. But to go to survival mode, well, let's go direct to consumer to keep cash flow coming for the company because all of your wholesale business is shut down. Yeah. And through the roof it goes. Stock goes to 170. And so, you know, it was without question the right strategic move to make. Now, in hindsight, and it's easy to sort of look backwards, and there was one other move I'll get to in a second. What you have to think about if you're building a business or a product, where will that consumer interact with that business? And when retail opened back up, we didn't flow back. And so, we opened up all that shelf space and opened it up to buy to the competitors. So you lose market share, you lose space. And so that was probably the big strategic miss because we thought ah we'll just keep going direct to consumer.

And so again where do we have to be bold and there was one other move to create efficiencies. We started centralizing to invest in technology. You know growth isn't free. You have to invest in it. And we moved to an organizational structure around men's, women's, kids. So, we started designing product for men, for women, for kids, which seems logical, but if you're a designer and you're in charge of designing the men's line, where do you start? So, what we've done is we shifted back. We call it the sport offense. It's a consumer-led offense. So, in product creation, we've aligned up against 12 sports. You have small cross-functional teams having a relationship with runners, having a relationship with basketball players, having a relationship with golfers, tennis athletes, you get it. And you have different competitors there. Yeah. And so those teams are creating product and innovation. On the marketplace side, you got to sell it somewhere. We have a more balanced approach. Yeah. Because there are 80% of the consumers will never shop direct to consumer. Yeah. They want to shop choice. They want to shop brands. And we should be there in a meaningful, thoughtful way. So that's what we're moving to a more balanced approach and sport-led and athlete-led focus on product. And the same thing on the marketplace.

Where do we need to be bolder? Innovation. I put these on for a reason. I have really cool Travis Scott cool hip sneakers I was going to wear and I thought, nope, I'm wearing innovation on stage. And so, you know, we've got to push the boundaries around human performance and potential. I think that's the area that I'm pushing really hard around innovation, design, aesthetic, storytelling. That's an opportunity.

Your credibility just went from like you were... your credibility was already high. Your credibility just went here. Not many people know about... well first of all not many people spent time with Tinker and not many people know about the Kitchen and certainly very very few know about... No it's not a confidential thing but few people know about the Pantry and yeah it was... we have a group of innovators and their job isn't the quarter to quarter designing hitting targets for each season. We have a group of innovators that think more long term and that's they go to the Kitchen quote to cook things up.

Well, it doesn't have to be a tension, right? It goes back to it in a perfect world that innovation and that taking risk if you will in design and aesthetic and look does drive pricing, you know, price value relationship and you can start to drive price and margin and hopefully better consumer connectivity. So in a perfect world those two go hand in hand. And we've got some great examples. If you take our running business, which is where I focused first, the entire team did, and we've said this publicly, now we're on a third quarter back to growth in running, and it was just because we led with a very consumer construct and how we designed the line, price points, the innovation, the look, the feel, the design, those are all revenue, margin, accretive. Yeah. And oh, by the way, it's resonating with the consumer. So, in a perfect world, you get them both to line up. So, it doesn't have to be an either or. And I think that's the challenge for you as you go out in the business world is forcing yourself to find a way to get them to both line up so you're not having to make tradeoffs. Taking a lower margin to appeal to a consumer. You got to I think you got to take a consumer somewhere new and different so that you can drive that revenue and margin.

Yeah. Well, you know, it was interesting when I returned and again the company had shifted. I even was talking with folks and they were, hey, we're a tech company. And I understand why we were making huge investments in technology to drive all this revenue and growth and this connectivity, consumers, direct to consumer, all incredibly important. My first day on the job was October 14th, so 18 months ago. I had a slide. My first slide. We're a sport company and we're a growth company. And it was a reminder. No, no. It's not... tech's an enabler of the strategy and the culture and that we have to get back. And the next slide. We exist to serve athletes. Yeah. And you have to and this is for you. I don't care what organization. What's your why? Why does the organization exist? What's its reason for being? So, I stood up and said, 'Hey, we exist to serve athletes and we're going to get back to sport and we're going to put the consumer or the athlete with an asterisk.' Yeah. If you have a body, you're an athlete. I'll come back to that. All eight billion consumers. That's our job. That's our responsibility.

And so, I've rallied the team around sport. I rallied the team around our mission statement, our sense of purpose. It's about inspiration and innovation for every athlete in the world. And again, that asterisk on the word athlete, we have a quote from our co-founder, Bill Bowerman. If you have a body, you're an athlete. And so this our job and our responsibility is to try to inspire and invite 8 billion consumers into the world of sport. That's a much bigger purpose. Yeah. Than trying to sell you something on a website. Yeah. It's how do we inspire and invite 8 billion consumers into the world of sport because we believe it makes their world them better, stronger, fitter, oh, and by the way, it's good for business. And so, we've got everybody rallied around our mission statement and then I have a series of maxims that we live by. It's what do we believe in and what are the actions and how do we treat one another. And so that's helped to shape the culture that we all want to see and feel and be a part of.

Thank you. So, I hope that helps. And personalized. Thank you so much. You're so welcome. I feel like I need to hold it up for the camera so we can sell it. You know, I did start in sales, right? So, I tell our designers all the time, without sales, it's just one big giant art project. All right.

Trust me, I'm always... I think all of us have to continue to no matter where you sit in an organization, you have to remain curious. You have to...

Keep learning and so again, I appreciate it. I'll certainly crack it open.

I used one of them.

Yeah. So, students always is one of our defining leadership principles. We have four.

Confidence without attitude. Sometimes known as my favorite.

That's who these leaders are.