Conscious Leadership: Notes Taken from Bob Iger and Jim Dethmer

Notes from a podcast interviewing Robert Iger

While I respect Iger’s mind, the podcast was not strong (felt the interviewer was ill prepared and the conversation was not original, so not leaving much here from what I listened to and will not leave link)

Be generous and efficient
Have great teachers
Never, ever complain about work
Iger worked 30 years with the top bosses and mentors
“You must be in the business of changing with or ahead of the times”

Notes from Shane Parrish’s Farnam Street’s Knowledge Project Podcast Episode 60 ft. Jim Dethmer (coach, speaker, author, and founding partner of The Conscious Leadership Group)

Fantastico. First 20 minutes are a lot of common sense, and then for the rest of the podcast, Dethmer proceeds to unpack familiar concepts with great originality of reasoning – conversations that really excited and inspired me! Such a thought provoking man and highly recommend you listen to the actual podcast recording.
State of Beings (Always operate out of a place of love and play over fear, rage, anger, guilt, or shame):
Being “above the line” vs “below the line”
Above the Line: Open, curious, trusting, open to learning, presence of candor
Below the line: Contracted. Curtness came from contraction. Contracted living can lead to self-criticism, which will probably lead to even more curtness. Defensiveness, Being in a state of threat, attached to proving you are right.
Acting below the line can lead to short term desired outcomes/results, but will leave toxic residue.
Can I accept myself for being where I am? (Acting out from below or above the line)
  • Acting out from below or above the line.
  • Can I accept myself for being reactive?
  • Order of states: acceptance follows awareness
    • Self-awareness in his words: creating a feedback rich environment/ or developing feedback rich tools for self-reflections
      • ‘If you are constantly getting feedback you are on a rocket-ship to self-awareness
    • Constructive Self-acceptance
      • Susan’s view: Centering on God’s delight in you, regardless of your state of being, mistakes, or how you acted. That you can accept and just strive to be better.
      • Dethmer’s view: Being present with “I am okay just the way I am” Kill the belief that something at the core is missing.
On Motivations
Purpose/Calling: 1st level of motivation that doesn’t lead to toxic residue
  • Jim Dethmer calls this level the “zone of genius” – what it is that lights me up to do in the world
Play: 2nd level of motivation
  • When work can start to lookalike play
    • Ex.) Dethmer’s: “When I am coding, it is like a child at play. I love it.”
    • Ex.) Susan’s “When I am designing or making new products, it is like a child at play. I love it. When I’m creating or solving something challenging, I get a huge adrenaline rush.”
  • The sooner you return to PLAY, the better for best leadership or results or work
Love: highest level/form of motivation
  • the love of the thing
    • Ex.) Dethmer’s “I LOVE LANDSCAPING!!”
    • Ex.) Susan’s “I LOVE MY CUSTOMERS I LOVE SEEING ATEM IN MORE PLACES I LOVE PEOPLE GETTING HAPPIER FROM ATEM AND COMING BACK FOR MORE!”
Teams of the future must be motivated by intrinsic rewards, play and love. However, so many people are motivated from desiring approval (Susan: this was me until 2016!! and I decided to start fighting it!)
  • On desiring approval: “The core of this motivation too lies in fear”
At 36 minutes:
On Integrity in Work/Leadership/Relationship to Others and Yourself
“There’s no such thing as a small breach of integrity” – Jim Dethmer
Reconsidering the term “AGREEMENTS”
  • Definition: agreeing with oneself or with 2 people+ to do something.
  • What does it mean to make clear agreements (commitments)?
    • Agreements need to be incredibly clear.
      • Not, let’s plan to meet around noon/in the morning, but let’s meet at x at y for z and we’ll do r, t, and c.
        • Who, what, when
  • Only make agreements you have a whole bodied agreement to
    • Wholebodied agreements: When it’s a yes from you in mind, body, and heart.
    • If you don’t do this, you make agreements you don’t want to make
      • This includes little details even with things like times that are less convenient for you. Either be whole bodied agreeing in compromise, or say “if we could do it at 7:30 that would be better for me”.
  • Most organizations keep between 40-60% of agreements
Broken agreements are a broach in integrity
Integrity is about my agreements
  • How impeccable I am about making and keeping my agreements
  • How impeccable I am about renegotiating agreements before I break them OR if I break them, cleaning them up
    • If you break an agreement, immediately acting: “Before we go on I want to say sorry for being xyzzy. I was to see if there is anything I can do to make it up for you.”
    • Taking acts of responsibility is the commodity of trust.
  • High integrity people will meet this 90% of the time
On Having a Victim Mentality
Do you live by a victim mentality or a creator mentality?
Victim Mentality: Is this happening to you?
Creator Mentality: Is this happening by you?
At 1 hour , 11 minutes:
On Improving EQ
Step 1. Decide if you are willing to improve your emotional intelligence
Step 2. One must be emotionally literate before one is emotionally intelligent
  • Being emotionally literate: Capable of knowing what you yourself are feeling, when you are feeling it. (Susan: I struggle with this, and naming my feelings and the why in the “present”).
    • Something people often do, thinking it’s their feeling “I feel you are wrong” “I feel overwhelmed” – A thought followed by a feeling is not a feeling.
Step 3. Can I feel my feelings?
  • Dethmer: Statistics support that feelings last less than 90 seconds if one doesn’t feed the feelings.
Creating a Feedback Rich Environment
  • Identify your feedback filters
    1. This person needs to give me feedback by this deadline, I need experts in the subject matter, this person isn’t smart enough” etc etc
    2. Dethmer: your state of mind should be about “I want feedback given any day, any time, by anybody
  • Being thoughtful about your feedback filters and being conscious about which ones you want or decide to keep
  • When asking for feedback, ensure the other person if they are concerned abut reputation or junior; “don’t worry about being right, constructive, or giving actionable feedback” “Anything I did less than 10, tell me what I can do better.” “Anything I did better than 1, tell me what I can do better.”
    • Susan: Things I can do: Ask family “What is one thing I can do to be a better sister?” “What is one thing I can do to be a better daughter?”
  • When receiving or getting feedback, always, ALWAYS ASK: “How is their feedback about me true about me? (Feedback is based off their projection of you or your work, but how is it true?
  • When you give feedback or give out a projection of another, take that feedback of yourself in and see how it is true about you.

Basic Principles of Color Theory

Overview of Color Usage in Art History

  1. Local color
    1. Byzantine mosaics, decorative art of the medieval, stained glass of the Middle Ages, folkart, Chinese/Japanese painting.
  2. Perceptual color (Atmospheric color)Started in Roman Art, developed in Renaissance, Rembrandt (1606-1669), Turner (1775- 1851) and others, intensively studied and fully understood by the Impressionist (Monet, 1840-1926).
  3. Optical color (scientific, divided color into points/dots) (Pointillism – Seurat’s painting, printing technology)
  4. Logical construction (substantial, return to continuous internal modulation)
    (Cezanne’s painting, 1839-1906 – to modulate a color meant varying it between cold and warm, light and dark, or dull and intense)
  5. Arbitrary colorExpressive – play between warm and cool colors, over and above those of the objects(Matisse, Bonnard and others).
  6. Symbolic colorCreate a sense of visual tension and emotional imbalance (Van Gogh, Kandinsky and Surrealists).

Why Study Color

  1. 1)  Intuition in strong moments
  2. 2)  Doctrines are for weaker moments. If one is unable to create masterpieces in color outof one’s non-knowledge, then one ought to look for knowledge
  3. 3)  All great master colorists possessed a science of color
  4. 4)  Personal expression with color supported by adequate knowledge

Bases of Color Theory We Study in This Course
• The Elements of Color, by Johannes Itten, 1961

(Johannes Itten, Switzerland, b. 1888, in 1913 studied under German color theorist Adolph Holzel, 1919 joined the Bauhaus, colleague of Paul Klee & Kandisky)

Color Physics (Newton, 1676)
1) A triangular prism disperses white sunlight into a spectrum of colors (rainbow):

Red, Orange, Yellow, Green, Blue, Dark blue and Violet

 

Each hue (color) can be accurately defined by specifying its wavelength of frequency. The light waves are not in themselves colored. Color arises in the human eye and brain. Each spectral hue is the complement of the mixture of all the other spectral hues.

2) Light generates the color: Colors are the children of light, and light is their mother. An object does not have any color in itself. A red object looks red because the molecule constituting its surface absorbs all other colors of light, and reflects only red.

3) Color Temperature:

Standard IncandescentHalogen Tungsten Fluorescent Daylight Temperature 2700 Kelvin 3000K 3200K 4200K 5000K

Two Kinds of Color Process
1) Subtractive Color (reflected pigment): color resulting from absorption of light. Their

mixtures are governed by the rule of subtraction. All color, when mixed in certain proportions, the subtractive result is black. (pigmentary, objects, printed matter & CMYK

color)

Primary color of pigment

Cyanine (Blue) +
Magenta (Red) +
Yellow +
Mixture of 3 primaries of reflected pigment: Black (Brown) Complementary + Complementary = Gray

2) Additive Color (projected light or reflected light): All colored light, when mixed in certain proportions, the additive result is white. Color resulting from projection of light. (TV

screen, computer screen, web color & RGB color)

Primary color of light

Primary

Secondary

Red +
Green +
Blue +
Mixture of 3 primaries of projected light: White

Color Wheel of the Pigment Color (artificially augmented spectrum, added purple)

Primary

Secondary

Magenta = Yellow = Cyanine =

Violet Orange Green

Green = Blue = Red =

Yellow Cyanine Magenta

Three Main Qualities of Color
1) Hue (color): The relative position located on the color wheel 2) Value: Intensity of tone, lightness or darkness of the color 3) Saturation (Chroma): Purity of the color

Variation of Contrast:
1) Hue Contrast
• Undiluted colors in their most intense luminosity.
• Extreme instance of contrast of hue: red/yellow/blue (effect: tonic, vigorous, and

decided).
• The intensity of contrast of hue diminishes as the hue moves away from primaries,

secondary colors are weaker in character, tertiary colors are still less distinct.
• When the single colors are separated by black or white lines, their individual characters

emerge more sharply.
• White weakens the luminosity of adjacent hues and darkens them; black causes them to

seem lighter.
• Significance: The interplay of primeval luminous forces; aboriginal cosmic splendor and

concrete actuality.
• Contrast of hue found in folk art, embroidery, costume, and pottery testifies to primitive

delight in colorful and decorative effects. Matisse sometimes uses color in this way too.

2) Value Contrast (brilliance, brightness & darkness, intensity of tone)
• Strongest expressions of light and dark are white/black, and yellow/violet.
• Gray: mixture of black and white, or red/yellow/blue and white, or any pair of

complementary colors.
• Tonal differences: Low key Intermediate High Key
• Significance: sharpen one’s sensitivity to shading; develop the feeling for proportion; be

aware of the relationship between positive & negative forms.
• Monochromatic color is found in Chinese and Japanese ink painting. Seurat’s drawings

give the feeling that he is devoting thought to each pinpoint in order to evoke the most

delicate of shadings.
• Equality of light or dark relates colors to each other.
• Exercise: Matching Brilliance’s – the 12 equidistant steps of gray from white to black in

the first row have been repeated for the 12 hues of the color circle in brilliance equal to

the corresponding grays.
• Most saturated color in this scale: yellow 3, orange 5, red 6, blue 8, violet 9.

3) Cold & Warm Contrast

• Sensation of temperature related to the visual realm of color sensation.
• The two poles of cold-warm contrast: Red-orange is the warmest, and blue-green, or

manganese oxide, is the coldest. The hues intermediate between them in the color circle may be either cold or warm according to their relationship with warmer or colder tones.

Cold: shadow transparent sedative rare airy far light wet

Warm: sun opaque stimulant dense earthy near heavy dry

4) Complementary Contrast
• Projected light: Complementary + Complementary = white
• Pigment color: Complementary + Complementary = Gray-black

a) Two such pigment colors make a strange pair. They are opposite, but require each other. They incite each other to maximum vividness when adjacent; and they annihilate each other, to gray-black, when mixed – like fire and water.

b) All three primaries are always present:

yellow, violet = yellow, red + blue blue, orange = blue, yellow + red red, green = red, yellow + blue

c) The eye requires any given color to be balanced by the complementary, and will spontaneously generate the later if it is not present.

d) Stabilizing power: Statically fixed image. Each color stands unmodified.
e) Peculiarity: Saturated red and green have the same brilliance.
f) Graduated mixtures of a contrasting complementary as intermediates and

compensating tones unite the two into one family.

5) Simultaneous Contrast

• Afterimage: Eye simultaneously requires the complementary color, but as a sensation in the eye of the beholder, and is not objectively present. It can’t be photographed, just tinged for the eye.

• Any two colors that are not precisely complementary will tend to shift the other towards its own complement.

• Significance: Aesthetic utility. (amplify, cancel, suppress, or modify)

6) Chroma Contrast (Saturation, purity, intensity of color)
• The prismatic hues are colors of maximum saturation.
• Colors may be diluted into lower saturation in four different ways:

* Color + White = Tint Color (lighter, colder)
* Color + Black = Shade Color (heavy, color’s splendor is gone, deprives colors of their

quality of light, deadens them)
* Color + Gray = Tonal Color (Soft, dull and neutral)
* Admixture of the corresponding complementary colors.

7) Contrast of Extension (Area, size, proportion)

• Goethe’s light values:
Yellow 9, Orange 8, Red 6, Violet 3, Blue 4, Green 6

• The harmonious areas for colors (reciprocals of light values): Yellow 3, Orange 4, Red 6, Violet 9, Blue 8, Green 6

• Converting these values to harmonious areas:
Yellow: Violet = 1:3 Orange: Blue = 1:2 Red: Green = 1:1

 

• If other than harmonious proportions are used in a color composition, thus allowing one color to dominate, the effect obtained is expressive.

The Color Sphere (Philipp Otto Runge) & The Color Star
1) Symmetrical shape with six parallels and 12 meridians. Illustrates all fundamental

relationships among colors, and between chromatic colors and black and white. All

conceivable colors have a place.
2) Pantone color system for printing.
3) Colors we can construct by means of the color sphere:

a) The pure prismatic hues, located on the equator of the spherical surface;
b) All mixture of the prismatic hues with white and black are on the surface;
c) The mixture of complementary pair are in a horizontal section.
d) The mixture of any complementary pair, tinted and shaded towards white and black,

as represented in the corresponding vertical section.

Color Harmony
1) Itten’s theory:

• Dyads: Two diametrically opposed complementary form a harmonious dyad. Two tones should be symmetrical to the center.

• Triads: Three hues form an equilateral triangle form a harmonious triad.
• Tetrads: Two pairs of complementary in the color circle whose connecting diameters are perpendicular to each other, we obtain a square or rectangle. Such colors form a

harmonious tetrad.

2) Ostwald’s color harmony:

• Monochromatic harmony:
Equal whites, equal blacks and the shadow series.

• Two-hue & multicolor harmonies: Complementary pairs in equal white and black Transverse Complementary pairs
Non Complementary pairs
Three-hue harmony

3) Munsell’s color harmony:

• Vertical harmony • Interior harmony

• Oblique harmony • Oblique side harmony

• Circular harmony • Spinal harmony

4) Summary of color theorists’ approaches:
• Equal whites and equal blacks color schemes.
• Analogous color schemes: The variation of hue goes no further than four successive

steps of the 12-hue color circle, on the basis of color temperature – warm or cool

tones.
• Complementary color schemes: Color organization bases on a set of complementary

color. One color is given the principal role, others are used in small quantities merely as accents. Emphasizing one color enhances expressive character, evokes a sense of contrast and tension.

 

• Polychromatic colors united by neutral: Unity created by repetition of certain colors, or employed neutral colors such as black, white, gray, brown, gold and silver.

Spatial Effect of Color
1) On black background, yellow appears to advance, while violet, just as any dark tone,

lurks in the depth.
2) On white background, violet seems to advance, while yellow, just as any light tone, is

held back.
3) Among cold and warm tones of equal brilliance, the warm will advance and the cold

retreat. Distant objects seem colder because of the intervening depth of air (Aerial

perspective).
4) A pure color advances relative to a duller one of equal brilliance.

Color & Form
Red-square: A marked tension, symbolizes matter, gravity and sharp limitation. The

square corresponds to red – the color of matter. The weight and opacity of red agree

with the static and grave shape of the square.
Yellow-triangle: Its acute angles produce an effect of pugnacity and aggression. It is a

symbol of thought, matching the weightless character of the lucid yellow. Blue-circle: The circle generates a feeling of relaxation and smooth motion. It is the

symbol of the spirit, moving undivided within itself. Corresponds to transparent blue.

Orange-trapezoid Green-spherical-triangle Violet-ellipse

Theory of Color Impression 1) Color effects in nature:

“Nature study should not be an imitative reproduction of fortuitous impressions of nature, but rather an analytical, exploratory development and interpretation of the characteristic of nature.”

2) Majestic cycle of nature:
• Spring: youthful, light, radiant, growth, luminous, yellow, pink & light blue.
• Summer: maximum luxuriance of form & color, maturation, outward, fullness of

power, saturated, dense, deep green.
• Autumn: golden autumn, harvest, maturity, brown & orange.
• Winter: passivity in nature, inward, cold, withdrawal, gray & white.

3) Three different intensities of light:

 

• Medium light: reveals the local color effectively, most details and textures. • Full light: whitens the intrinsic color.
• Shadow: obscures and darkens the color.

Color Expression

The following colors evoke certain meanings in this culture. These subconscious perceptions, intuitive thought and positive knowledge should always function together. They bear some general truth, but may vary in different societies. They are related to the psychological realm, mental and emotional experience of the viewer.
1) Red signifies primitive & fiery strength, inner warmth, active, vivacity, passionate,

dynamic force, mars, revolution. It can be widely varied between cold and warm.

  1. 2)  Orange express radiant activity, communication, active energy, fire burning, solarluminosity, self-respect and generosity. It could be lightened to beige for a quiet andintimate interior space.
  2. 3)  Yellow is most luminous & bright color with the sense of radiant, weightless & purevibration. It symbolizes understanding, knowledge and intelligence. It is most aggressive and luminous on black. Golden yellow represents the highest sublimation of matter, but greenish yellow is a sickly color to a lot of people.
  3. 4)  Green symbolizes growth, hope, tranquility, sympathy & compassion. It is the fusion & interpenetration of knowledge and faith. Yellow-greens are joyful, young and sunny; while blue-green are cold, pensive and vigorous.
  4. 5)  Blue express relaxation, passive, submissive faith, stability, grief & associated with nervous system. It symbolizes inner spiritual life, immortality and transcendental. Darker shades – infinity; lighter tints – dreamlike quality.
  5. 6)  Violet is a mysterious, meditative, emotional, piety color and the color of dignity. Its tints symbolize the brighter aspects of life, whereas shades represent the dark, negative forces and terrors.
  6. 7)  Gray is a neutral and the color of inertia. It symbolizes indecision, monotony and depression in dark tones

 

High-Performance Marketing: An Interview with Nike’s Phil Knight

Nike is a champion brand builder. Its advertising slogans—“Bo Knows,” “Just Do It,” “There Is No Finish Line”—have moved beyond advertising into popular expression. Its athletic footwear and clothing have become a piece of Americana. Its brand name is as well-known around the world as IBM and Coke.

So it may come as a surprise that Nike, the consummate marketer, came to understand the importance of marketing late in its life: after it hit the $1 billion revenue mark. After more than a decade of meteoric growth, Nike misjudged the aerobics market, outgrew its own capacity to manage, and made a disastrous move into casual shoes. All of those problems forced the company into a period of intense self-examination. Ultimately, says founder, chairman, and CEO Phil Knight, the company realized that the way forward was to expand its focus from the design and manufacture of the product, where Nike had always excelled, to the consumer and the brand.

Nike’s roots go back to a company called Blue Ribbon Sports, which Knight, a former runner at the University of Oregon, and Bill Bowerman, Knight’s former track coach, created in 1962. Blue Ribbon Sports started out distributing running shoes for a Japanese company, then shifted to designing its own shoes and outsourcing them from Asia. Blue Ribbon Sports’s performance-oriented product innovations and mastery of low-cost production translated into shoes athletes wanted to wear and could afford. Knight and Bowerman’s track connections got the shoes onto the feet of real runners. And then jogging emerged as a new national pastime.

By 1978, the year Blue Ribbon Sports changed its corporate name to Nike, Jon Anderson had won the Boston Marathon wearing Nike shoes, Jimmy Conners had won Wimbledon and the U.S. Open wearing Nike shoes, Henry Rono had set four track and field records in Nikes, and members of the Boston Celtics and Los Angeles Lakers basketball teams were wearing them. Sales and profits were doubling every year.

Then in the mid-1980s, Nike lost its footing, and the company was forced to make a subtle but important shift. Instead of putting the product on center stage, it put the consumer in the spotlight and the brand under a microscope—in short, it learned to be marketing oriented. Since then, Nike has resumed its domination of the athletic shoe industry. It commands 29% of the market, and sales for fiscal 1991 topped $3 billion.

Here Phil Knight explains how Nike discovered the importance of marketing and what difference that discovery has made. This interview was conducted at Nike, Inc.’s Beaverton, Oregon offices by HBR associate editor Geraldine E. Willigan.

HBR: Nike transformed the athletic shoe industry with technological innovations, but today many people know the company by its flashy ads and sports celebrities. Is Nike a technology company or a marketing company?

Phil Knight: I’d answer that question very differently today than I would have ten years ago. For years, we thought of ourselves as a production-oriented company, meaning we put all our emphasis on designing and manufacturing the product. But now we understand that the most important thing we do is market the product. We’ve come around to saying that Nike is a marketing-oriented company, and the product is our most important marketing tool. What I mean is that marketing knits the whole organization together. The design elements and functional characteristics of the product itself are just part of the overall marketing process.

We used to think that everything started in the lab. Now we realize that everything spins off the consumer. And while technology is still important, the consumer has to lead innovation. We have to innovate for a specific reason, and that reason comes from the market. Otherwise, we’ll end up making museum pieces.

What made you think the product was everything?

Our success. In the early days, anybody with a glue pot and a pair of scissors could get into the shoe business, so the way to stay ahead was through product innovation. We happened to be great at it. Bill Bowerman, my former track coach at the University of Oregon and cofounder of the company that became Nike, had always customized off-the-shelf shoes for his runners. Over the years, he and some other employees came up with lots of great ideas that we incorporated. One of Bowerman’s more legendary innovations is the Waffle outsole, which he discovered by pouring rubber into a waffle iron. The Waffle Trainer later became the best-selling training shoe in the United States.

We were also good at keeping our manufacturing costs down. The big, established players like Puma and Adidas were still manufacturing in high-wage European countries. But we knew that wages were lower in Asia, and we knew how to get around in that environment, so we funneled all our most promising managers there to supervise production.

Didn’t you do any marketing?

Not formally. We just tried to get our shoes on the feet of runners. And we were able to get a lot of great ones under contract—people like Steve Prefontaine and Alberto Salazar—because we spent a lot of time at track events and had relationships with the runners, but mostly because we were doing interesting things with our shoes. Naturally, we thought the world stopped and started in the lab and everything revolved around the product.

When did your thinking change?

When the formulas that got Nike up to $1 billion in sales—being good at innovation and production and being able to sign great athletes—stopped working and we faced a series of problems. For one thing, Reebok came out of nowhere to dominate the aerobics market, which we completely miscalculated. We made an aerobics shoe that was functionally superior to Reebok’s, but we missed the styling. Reebok’s shoe was sleek and attractive, while ours was sturdy and clunky. We also decided against using garment leather, as Reebok had done, because it wasn’t durable. By the time we developed a leather that was both strong and soft, Reebok had established a brand, won a huge chunk of sales, and gained the momentum to go right by us.

We were also having management problems at that time because we really hadn’t adjusted to being a big company. And on top of that, we made a disastrous move into casual shoes.

What was the problem with casual shoes?

Practically the same as what happened in aerobics, and at about the same time. We went into casual shoes in the early 1980s when we saw that the running shoe business, which was about one-third of our revenues at the time, was slowing down. We knew that a lot of people were buying our shoes and wearing them to the grocery store and for walking to and from work. Since we happened to be good at shoes, we thought we could be successful with casual shoes. But we got our brains beat out. We came out with a functional shoe we thought the world needed, but it was funny looking and the buying public didn’t want it.

By the mid-1980s, the financial signals were coming through loud and clear. Nike had been profitable throughout the 1970s. Then all of a sudden in fiscal year 1985, the company was in the red for two quarters. In fiscal 1987, sales dropped by $200 million and profits headed south again. We were forced to fire 280 people that year—our second layoff ever and a very painful one because it wasn’t just an adjustment and trimming of fat. We lost some very good people that year.

How did you know that marketing would solve the problems?

We reasoned it out. The problems forced us to take a hard look at what we were doing, what was going wrong, what we were good at, and where we wanted to go. When we did that, we came to see that focusing solely on the product was a great way for a brand to start, but it just wasn’t enough. We had to fill in the blanks. We had to learn to do well all the things involved in getting to the consumer, starting with understanding who the consumer is and what the brand represents.

 

Didn’t Nike understand the consumer right from the start?

In the early days, when we were just a running shoe company and almost all our employees were runners, we understood the consumer very well. There is no shoe school, so where do you recruit people for a company that develops and markets running shoes? The running track. It made sense, and it worked. We and the consumer were one and the same.

When we started making shoes for basketball, tennis, and football, we did essentially the same thing we had done in running. We got to know the players at the top of the game and did everything we could to understand what they needed, both from a technological and a design perspective. Our engineers and designers spent a lot of time talking to the athletes about what they needed both functionally and aesthetically.

It was effective—to a point. But we were missing something. Despite great products and great ad campaigns, sales just stayed flat.

Where did your understanding fall short?

We were missing an immense group. We understood our “core consumers,” the athletes who were performing at the highest level of the sport. We saw them as being at the top of a pyramid, with weekend jocks in the middle of the pyramid, and everybody else who wore athletic shoes at the bottom. Even though about 60% of our product is bought by people who don’t use it for the actual sport, everything we did was aimed at the top. We said, if we get the people at the top, we’ll get the others because they’ll know that the shoe can perform.

But that was an oversimplification. Sure, it’s important to get the top of the pyramid, but you’ve also got to speak to the people all the way down. Just take something simple like the color of the shoe. We used to say we don’t care what the color is. If a top player like Michael Jordan liked some kind of yellow and orange jobbie, that’s what we made—even if nobody else really wanted yellow and orange. One of our great racing shoes, the Sock Racer, failed for exactly that reason: we made it bright bumble-bee yellow, and it turned everybody off.

What’s different now?

Whether you’re talking about the core consumer or the person on the street, the principle is the same: you have to come up with what the consumer wants, and you need a vehicle to understand it. To understand the rest of the pyramid, we do a lot of work at the grass-roots level. We go to amateur sports events and spend time at gyms and tennis courts talking to people.

We make sure that the product is the same functionally whether it’s for Michael Jordan or Joe American Public. We don’t just say Michael Jordan is going to wear it so therefore Joe American Public is going to wear it. We have people who tell us what colors are going to be in for 1993, for instance, and we incorporate them.

Beyond that, we do some fairly typical kinds of market research, but lots of it—spending time in stores and watching what happens across the counter, getting reports from dealers, doing focus groups, tracking responses to our ads. We just sort of factor all that information into the computer between the ears and come up with conclusions.

What did you learn from the casual shoe failure?

Understanding the consumer is just part of good marketing. You also have to understand the brand. That’s really the lesson we learned from casual shoes. That whole experience forced us to define what the Nike brand really meant, and it taught us the importance of focus. Without focus, the whole brand is at risk. Just because you have the best athletes in the world and a stripe everybody recognizes doesn’t mean you can take that trademark to the ends of the earth. The ends of the earth might be right off that ledge!

Ultimately, we determined that we wanted Nike to be the world’s best sports and fitness company and the Nike brand to represent sports and fitness activities. Once you say that, you have focus, and you can automatically rule out certain options. You don’t end up doing loafers and wingtips and sponsoring the next Rolling Stones world tour. And you don’t do casual shoes under that brand.

Can you expand a brand without losing focus?

To a point. A brand is something that has a clear-cut identity among consumers, which a company creates by sending out a clear, consistent message over a period of years until it achieves a critical mass of marketing. The thing is, once you hit the critical mass, you can’t push it much further. Otherwise the meaning gets fuzzy and confused, and before long, the brand is on the way out.

Look at the Nike brand. From the start, everybody understood that Nike was a running shoe company, and the brand stood for excellence in track and field. It was a very clear message, and Nike was very successful. But casual shoes sent a different message. People got confused, and Nike began to lose its magic. Retailers were unenthusiastic, athletes were looking at the alternatives, and sales slowed. So not only was the casual shoe effort a failure, but it was diluting our trademark and hurting us in running.

How, then, has Nike been able to grow so much?

By breaking things into digestible chunks and creating separate brands or sub-brands to represent them. If you have something that’s working, you can try to expand it, but first you have to ask, does this expansion dilute the big effort? Have I taken the thing too far? When you come to the conclusion that you have—through conversations with athletes, your own judgment, what’s happening in retail stores or focus groups—then you have to create another category.

How did you make that discovery?

Accidentally. I can’t say we had a really smart strategy going forward. We had a strategy, and when it didn’t work, we went back and regrouped until finally we hit on something. What we hit on in the mid-1980s was the Air Jordan basketball shoe. Its success showed us that slicing things up into digestible chunks was the wave of the future.

The Air Jordan project was the result of a concerted effort to shake things up. With sales stagnating, we knew we had to do more than produce another great Nike running shoe. So we created a whole new segment within Nike focused on basketball, and we borrowed the air-cushion technology we had used in running shoes to make an air-cushioned basketball shoe.

Basketball, unlike casual shoes, was all about performance, so it fit under the Nike umbrella. And the shoe itself was terrific. It was so colorful that the NBA banned it—which was great! We actually welcome the kind of publicity that pits us against the establishment, as long as we know we’re on the right side of the issue. Michael Jordan wore the shoes despite being threatened with fines, and, of course, he played like no one has ever played before. It was everything you could ask for, and sales just took off.

We’ve created lots of new categories under the Nike brand, everything from cross-training and water sports to outdoors and walking. But what’s interesting is that we’ve sliced up some of the categories themselves.

Take basketball. Air Jordan had two great years, and then it fell on its face. So we started asking ourselves, are we trying to stretch Air Jordan too far? Is Air Jordan 70% of basketball? Or is it 25% of basketball? As we thought about it, we realized that there are different styles of playing basketball. Not every great player has the style of Michael Jordan, and if we tried to make Air Jordan appeal to everyone, it would lose its meaning. We had to slice up basketball itself.

Two new segments came out of that: Force, which is represented by David Robinson and Charles Barkley, and Flight, represented by Scottie Pippin. Force shoes are more stable and better suited to the aggressive, muscular styles of David Robinson and Charles Barkley. Flight shoes, on the other hand, are more flexible and lighter in weight, so they work better for a quick, high-flying style like Scottie Pippin’s.

Whenever someone talks about Nike basketball, they think of Air Jordan. But we actually have those three distinct segments, Air Jordan, Flight, and Force, each with its own brand—or sub-brand, really. Each has great athletes representing it, a complete product line, shoes and clothes that are tied together. Instead of one big glop, we have the number one, the number two, and the number four brands of basketball shoes.

 

What other categories have you sliced up?

Tennis is another good example. We have a very focused category that has been built around the personalities of John McEnroe and Andre Agassi. We created the Challenge Court Collection—very young, very anti-country club, very rebellious—and we became the number one selling tennis category in the world. Nevertheless, we were ignoring 75% of the tennis players out there because most tennis players are a little more conservative than John and Andre. They didn’t want those flashy outfits. That loud style isn’t even suitable for John anymore. So instead of diluting what Challenge Court stood for, we created a second category within the tennis framework called Supreme Court, which is more toned down. Each of those categories stands for something distinct.

Have you exhausted the list of things that fit under the Nike umbrella?

Actually, we’re now pushing the limits of the Nike brand by going into fitness. The core consumer in fitness is a little different from the core consumer in sports. Fitness activities tend to be individual pursuits—things like hiking, bicycling, weight-lifting, and wind surfing. And even within the fitness category, there are important differences. We found that men do fitness activities because they want to be stronger or live longer or get their heart rate or blood pressure down. Their objectives are rather limited. But women do it as sort of a self-actualization thing, as part of the whole package of what they’re about.

I’m confident that the brand can encompass both the performance-oriented message and the fitness message over the next year and a half, but we’ll have to be careful after that. Given enough time, the messages will probably diverge, and we’ll be in danger of blurring Nike’s identity. But it won’t be the same as casual shoes because this time we’ll see it coming and we’ll deal with it.

Is Nike’s concept of brand building confined to sports and fitness?

The lessons we’ve learned about brand identity and focus can take us in many directions. The key is to create separate umbrellas for things that aren’t part of the Nike brand. Knowing what happened in casual shoes, you probably wouldn’t think we’d have anything to do with dress shoes. But in 1988, we acquired Cole-Haan, a maker of dress shoes and accessories. Cole-Haan is part of Nike, Inc., but it’s completely separate from the Nike brand.

Actually, we think of Cole-Haan as half a brand because only sophisticated consumers know what it is; it hasn’t yet achieved critical mass. That’s where we’re applying our marketing skill. We bought the brand knowing its potential, and we’ve simply turned up the marketing volume. We could have created a brand and got it up to $60 million in sales, which is where Cole-Haan was when we bought it, but it would have taken millions of dollars and a minimum of five years. We’re further ahead this way. In the four years we’ve owned Cole-Haan, it’s repaid the purchase price and is now at $150 million in sales.

We’ve been talking about brand building. Isn’t TV advertising a big part of that?

Today it’s a very important part. In fact, when people talk about Nike, the TV ads are practically all they want to talk about. But we became a billion dollar company without television. For years, we just got the shoes out there on the athletes and ran a limited number of print ads in specialized magazines like Runner’s World. We didn’t complete the advertising spectrum until 1987, when we used TV for the first time.

Our first TV campaign was for Visible Air, which was a line of shoes with transparent material along the midsole so consumers could see the air-cushioning technology. Having gone through the painful experience of laying people off and cutting overhead in the mid-1980s, we wanted the message about our new line of shoes to hit with a punch, and that really dictated TV advertising.

The Visible Air launch was a critical moment for a couple of reasons. Until then, we really didn’t know if we could be a big company and still have people work closely together. Visible Air was a hugely complex product whose components were made in three different countries, and nobody knew if it would come together. Production, marketing, and sales were all fighting with each other, and we were using TV advertising for the first time. There was tension all the way around.

We launched the product with the Revolution campaign, using the Beatles song. We wanted to communicate not just a radical departure in shoes but a revolution in the way Americans felt about fitness, exercise, and wellness. The ads were a tremendous hit, and Nike Air became the standard for the industry immediately thereafter.

Did TV change the character or image your company projected?

Not really, because our basic beliefs about advertising didn’t change. We’ve always believed that to succeed with the consumer, you have to wake him up. He’s not going to walk in and buy the same stuff he always has or listen to the same thing he’s always heard. There are 50 different competitors in the athletic shoe business. If you do the same thing you’ve done before or that somebody else is doing, you won’t last more than one or two seasons.

And from the beginning, we’ve tried to create an emotional tie with the consumer. Why do people get married—or do anything? Because of emotional ties. That’s what builds long-term relationships with the consumer, and that’s what our campaigns are about. That approach distinguishes us from a lot of other companies, including Reebok. Their campaigns aren’t always bad—their Air-Out Jordan campaign last year worked well—but it’s very transaction oriented. Our advertising tries to link consumers to the Nike brand through the emotions of sports and fitness. We show competition, determination, achievement, fun, and even the spiritual rewards of participating in those activities.

How do you wake up the consumer?

By doing new things. Innovation is part of our heritage, but it also happens to be good marketing. You can probably trace it back to the 1960s, when we were selling $100,000 a year instead of $1 billion. We saw the company as having a great competitive advantage because we had a great product at a great price. And it worked a little bit. But what really made things pop was when we innovated with the product. That’s when we said, “aha!”

We’d have a hard time stopping innovation in the product area, but we’ve consciously tried to be innovative in all areas of the business, and right now that means advertising. We need a way of making sure people hear our message through all the clutter. In 24 words or less, that means innovative advertising—but innovative in a way that captures the athletes’ true nature. Bo Jackson and Michael Jordan stand for different things. Characterizing them accurately and tying them to products the athletes really use can be very powerful.

Of course, trying to wake people up can be risky, especially since we generally don’t pre-test our ads. We test the concepts beforehand, but we believe that the only way to know if an ad works is to run it and gauge the response. So we get nervous when we’re ready to go to press, and then we wait and see if the phone rings. If the phone rings, that’s usually good. Although some of the calls will be negative, complaints tend to be in the great minority. Besides, we’re always prepared for some criticism because somebody will be offended no matter what we do. We don’t let that hold us back. Our basic philosophy is the same throughout the business: take a chance and learn from it.

Nike’s advertising has been so successful that it’s hard to think of it as being risky. What are some of the risks?

The Hare Jordan, Air Jordan commercial that aired during the 1992 Super Bowl represented a big risk from both a financial and a marketing standpoint. It showed Michael Jordan teaming up on the basketball court with Bugs Bunny. We invested in six months’ worth of drawings and a million dollars in production costs to show Michael Jordan, probably the most visible representative of Nike, paired with a cartoon character. It could have been too silly or just plain dumb. But we got thousands of positive responses, and USA Today ranked it the best Super Bowl ad. The only criticism we got was from the National Stutterers Association for using Porky Pig at the end.

Humor is always a risky business. Take our advertising to women. We produced some ads in 1987 that we thought were very funny but many women found insulting. They were too hard edged. We got so many complaints that we spent three or four years trying to understand what motivates women to participate in sports and fitness. We did numerous focus groups and spent hundreds of hours on tennis courts, in gyms, and at aerobics studios listening to women.

Those efforts paid off in our recent Dialogue campaign, which is a print campaign that is very personal. The text and images try to empathize and inspire. One ad explores a woman’s relationship with her mother; another touches on the emotions of a girl in physical education class. Even there it was risky to use such an intimate voice in the ads, but it worked. The newest ads broke in February, and within eight weeks we had received more than 50,000 calls on our “800” number praising the ads and asking for reprints.

But things don’t always come together. The campaign to launch the Air 180 running shoe comes to mind. The advertising agency was working with seven directors from around the world and trying to translate words into all those different languages. In the end, we used no words, just images of various kinds. One ad showed a spaceship zooming in on a Waffle Trainer outsole. Another showed cartoon characters bouncing on the shoe to demonstrate the cushioning. When we looked at the ad a month before its Super Bowl launch, it seemed fragmented and almost goofy. Some people thought we could fine-tune it, but others, including me, didn’t want to use it at all. It was neither animal nor vegetable. So we ran a Nike general purpose ad, which was safe but somewhat boring. If the competition had had terrific ads, we’d have been hurt quite a bit. We used the Air 180 ads later that spring, but they didn’t have the impact we were after.

How do Nike’s TV ads create emotional ties with the buying public?

You have to be creative, but what really matters in the long run is that the message means something. That’s why you have to start with a good product. You can’t create an emotional tie to a bad product because it’s not honest. It doesn’t have any meaning, and people will find that out eventually. You have to convey what the company is really all about, what it is that Nike is really trying to do.

That’s something Wieden & Kennedy, our advertising agency, is very good at. Lots of people say Nike is successful because our ad agency is so good, but isn’t it funny that the agency had been around for 20 years and nobody had ever heard of it? It’s not just that they’re creative. What makes Wieden & Kennedy successful with Nike is that they take the time to grind it out. They spend countless hours trying to figure out what the product is, what the message is, what the theme is, what the athletes are all about, what emotion is involved. They try to extract something that’s meaningful, an honest message that is true to who we are. And we’re very open to that way of working, so the chemistry is good.

People at Nike believe in the power of emotion because we feel it ourselves. A while ago there was a book published about Nike, and one person who reviewed it said he was amazed that a group of intelligent, talented people could exert so much passion, imagination, and sweat over pieces of plastic and rubber. To me, it’s amazing that anyone would think it’s amazing. I can’t say I would be that passionate about cigarettes and beer, but that’s why I’m not doing cigarettes and beer.

What’s the advantage of using famous athletes in your advertising?

It saves us a lot of time. Sports is at the heart of American culture, so a lot of emotion already exists around it. Emotions are always hard to explain, but there’s something inspirational about watching athletes push the limits of performance. You can’t explain much in 60 seconds, but when you show Michael Jordan, you don’t have to. People already know a lot about him. It’s that simple.

The trick is to get athletes who not only can win but can stir up emotion. We want someone the public is going to love or hate, not just the leading scorer. Jack Nicklaus was a better golfer than Arnold Palmer, but Palmer was the better endorsement because of his personality.

To create a lasting emotional tie with consumers, we use the athletes repeatedly throughout their careers and present them as whole people. So consumers feel that they know them. It’s not just Charles Barkley saying buy Nike shoes, it’s seeing who Charles Barkley is—and knowing that he’s going to punch you in the nose. We take the time to understand our athletes, and we have to build long-term relationships with them. Those relationships go beyond any financial transactions. John McEnroe and Joan Benoit wear our shoes everyday, but it’s not the contract. We like them and they like us. We win their hearts as well as their feet.

Admittedly, it’s a little harder to get the public to identify with athletes in the area of fitness. When you’re selling football shoes, you know what your emotion is and who your guys are. When you’re selling shoes for hiking and aerobics, it’s a different deal. There are no Super Bowl winners, so there are no obvious personalities to represent the activity, which leads to an entirely different type of advertising. We still convey emotion, but we do it on a much more personal level.

What if a Nike athlete does something illegal or socially unacceptable?

There’s always a chance that somebody will get into drugs or do something like Mike Tyson did. But if you do your scouting well, you can avoid a lot of those situations. Three or four years ago we were recruiting two very exciting college basketball players, but before we signed them we checked with our network of college coaches. We learned that one of them had a cocaine problem and the other could only play good offensive ball with his back to the basket. Needless to say, we didn’t sign either of them, and both of them were a bust in the NBA.

Is social responsibility part of being a marketing-oriented company?

I’ve always believed that businesses should be good citizens, which has nothing to do with marketing. But the thing I was missing until recently is the issue of visibility—and that is tied to marketing. It’s not enough to do good things. You have to let people know what you’re doing. And that means having good relations with the press. When it comes to the product, America gets its opinions from advertising. When it comes to Nike as a whole, America gets its opinions from the press.

Our industry, and Nike in particular, gets a lot more press than many others because it’s more fun to talk about us than about a company that makes widgets. On the one hand, we don’t mind the attention; we like getting our name in the press. But on the other hand, the company usually gets treated in a superficial, lighthearted way, which is not what we’re all about. Nike is not about going to a ball game. It’s a business. People don’t always realize that we take things seriously. So we’re learning to explain ourselves better.

We can’t make rules that keep drug dealers from wearing our stuff, and we can’t solve the problems of the inner city, but we sponsor a lot of sports clinics for youth. And we’re underwriting a series called Ghostwriting that the Children’s Television Workshop is developing to teach kids how to read and write. We’re doing it because we think it’s the right thing to do, but we also want the visibility.

Is the shift to being marketing oriented an industrywide trend?

We can see now that the entire industry has gone through a major shift. But I’m happy to say that we pretty much led the charge by being first to understand the importance of the brand and the consumer. If we hadn’t made that discovery, someone else would have, and we might have been out of business.