Change Management at Nike

Why Nike Needs to Cut Colin Kaepernick
Executive Summary
Nike’s decision to tap into “woke culture” and turn the out of work former NFL quarter Colin Kaepernick into a brand ambassador has been a controversial one since the sportswear company launched its Colin ad campaign in 2018. Nike needs to change the way it approaches its consumer base in America while simultaneously addressing the supply chain issues that have arisen as a result of COVID-19, which has caused major production problems for Nike in Asia. While Nike has been active in promoting the ultimate Trump antagonist in Colin Kaepernick, it is now time to bury the hatch and put America first but cutting ties with Kaepernick and opening up production in the US so as to 1) bring manufacturing back to America and solve the supply chain problems caused by the virus, and 2) to help put Americans back to work so that American consumers can get back to doing what they do best, which is buying. There may be resistance to change within Nike if this plan were to be implemented, so Kotter’s 8-Step model should be used to address and prevent potential resistance.
Table of Contents
Executive Summary 1
Introduction 2
Literature Review 3
Application of the Theory to the Organization in Question 4
Conclusions 6
Recommendations 7
Bibliography and References 9
Introduction
Change management is about managing people and their reactions to change (Cameron & Green, 2015). However, the need for change is typically related to business issues and not necessarily to people. Thus for a company such as Nike to manage change internally it has to be able to cross that divide between business and people to make sure every stakeholder is on board with the change and that people are respected for their thoughts and feelings.
The problem that Nike faces today is twofold: 1) its use of Colin Kaepernick as an activist frontman for the brand has alienated conservative consumers; 2) its use of offshore labor has caused production nightmares now that COVID-19 has put nations in lockdown mode for the foreseeable future. Nike faces the problem of a dwindling consumer base in the US and a dwindling store of products. The solution is to bring jobs back to America and put laid-off Americans back to work so that they can go out and consume Nike products, which they will gladly do after seeing an about-face on Nike’s part.
This change is needed because the coronavirus has had a devastating effect on supply chains over the past three months since the outbreak of COVID-19 that started in China became a pandemic around the world. The current situation is untenable for companies like Nike that rely upon overseas labor for materials and production. It is understandable that some changes needed to be made for the foreseeable future as nations go into lockdown. But this is not a sustainable plan or strategy for companies that need laborers and supply chains. To maintain the livelihood of the nation at the same time that people are protected, changes need to be made. Transportation may be halted altogether in the coming months and years, which means Nike will need to ask major questions about how it plans to provide its products. The old way of relying on overseas labor or goods made overseas may have to come to an end. The US has been offshoring jobs for decades. Is it perhaps time for all jobs to return to the domestic labor market? Is it perhaps time for nations to become more isolationist in terms of transport? Perhaps a solution can be arrived at that will not require all transportation to grind to a halt—but how transports are thought of is something that should be discussed more openly, whether this involves disinfecting all shipments or using a rigorous testing method on all goods and personnel. The question is—what will be the costs and who will be willing to bear them? For Nike, the big change that has to be made is this: it must bring back labor to the US, and if it does the company will be hailed a hero for bringing jobs back to America at a time when millions of Americans are applying for unemployment as a result of the nation going into lockdown.
Literature Review
Managing change is not an easy process and it requires change managers to know their people so that they can foresee issues and stop problems from arising before they actually do. One of the ways to manage change is to monitor change. One mechanism for monitoring change is to have managers self-reporting progress every week using the Agile method, which is a highly effective method of working among managers where the goals are acknowledged and the progress made discussed daily (Balaji & Murugaiyan, 2012; Boehm, 2002; Boehm, 2007; Fernandez & Fernandez, 2008). Progress among social media Influencers should also be taken into consideration by looking at followers, who is clicking, and where traffic is coming from as this will show how well Nike’s new direction is gaining traction with the American public (Freberg, Graham, McGaughey & Freberg, 2011).
Managing resistance to change is another important aspect that has to be considered. Change management requires that managers implement the proper change management method. The one that will work best for Nike in this situation is the change management model developed by Kotter (2012). Kotter (2012) shows that change is best managed when managers involve employees in the change management process and obtain feedback from stakeholders. By inviting feedback from stakeholders, the stakeholders feel that they are part of the change management process and that their opinion matters and is important to managers. They feel valued which makes them drop their resistance to change and embrace the change. Managers can then go on to celebrate small victories and thus cement the changes so that it becomes the new norm and no one questions it from that point on (Kotter, 2012).
Application of the Theory to the Organization in Question
Kotter’s (2012) 8-Step change management model is one of the best change management models in use today. It is so helpful because it foresees the potential for problems and resistance and provides the solution through preventive maintenance. Prevention of resistance is literally written into the model. The 8 steps of the Kotter model are:
1) Create a sense of urgency
2) Create a guiding coalition
3) Create a vision for change
4) Communicate the vision
5) Remove obstacles
6) Create short-term wins
7) Consolidate improvements
8) Anchor the changes
This model works because it shows exactly what needs to be done and why. It identifies the drivers of change and encourages the manager to build a sense of urgency around them so that stakeholders buy into the need for change. It is not about pushing change on others but rather getting others to begin calling for change themselves. In this case, with the COVID-19 pandemic spreading chaos and crisis and supply chains being wrecked, products going unproduced and Americans being laid off, there is obviously a need for change, but who has the solution? Nike could step forward with the solution in a big way and help President Trump make good on a promise that he has been making since inauguration—i.e., to bring jobs back home to America.
Globalization is a driver here because it affects everything: from the supply chain to markets to recruiting workers, globalization is impactful. Companies around the world are now in competition with one another. But the three critical factors for succeeding in the business environment are 1) the ability to embrace change and to adapt, 2) the ability to be creative an innovative, and 3) the ability to be world-class, which means having egalitarian principles and a strong consumer focus. Nike has recently rubbed its conservative consumers the wrong way by picking the anti-Trump activist Colin Kaepernick for a spokesman and to be the face of the brand. Bringing back jobs to America at a time when that is needed would be a huge boost for the company’s brand appeal and a first step at winning back those conservative consumers who literally burned their Nike gear and posted the videos on social media when Nike announced it would be making Colin Kaepernick its brand spokesman.
The target population of Nike consists of consumers who are between the ages of 15 and 45. 67% of Nike’s consumers are white and Nike consumers are 7% less likely to be Republicans than the general population, and only 3% more likely to be Democrats (TMZ, 2018). Thus, Nike has gauged its market incorrectly in pursuit of a trend. It needs to win back the conservative core of its consumer base.
This strategic plan will obviously impact stakeholders who support Kaepernick’s cause and want to see Nike advocate for the Left. But it is important for the company to be bi-partisan and to avoid causing scandal at the political level. The country cannot afford to be torn any longer and Nike cannot weather a storm like this either. The organizational population at Nike is inclusive and welcomes diversity and that is a two-way road that needs to be traveled. The culture at Nike has to be more accepting of conservative views and values.
Conclusions
Applying this model will require the change manager to make some serious observations about the company and its stakeholders. First, managers must break resistance by communicating to workers in the organization and in the community the fact that change is urgent. The COVID-19 crisis will make this easy and allow Nike to move swiftly as it will be able to draw support from the government to get this move on track. A guiding coalition will be built with all the political relevant people coming onto the Board and people from the organization to represent American workers taking part in the coalition. The vision for change will be communicated by the CEO and the vision will be spread by Influencers. Obstacles to change can be removed by getting feedback early on from stakeholders and inviting them to be part of the process through active participation rather than to be recipients as passive observers. Celebrating short term victories and showing that the change is working for the best will help to anchor changes and turn Nike into a truly American made company.
Recommendations
Implementation must begin immediately, starting May 1, 2020. The first task is to reroute raw material supply chains to the new factory location in the US where workers are being trained to create new Nike goods for all Americans. The supply chain manager will be responsible for overseeing this operation, and at the new factory, the workers’ training will be overseen by the factory manager.
Hiring and training for all positions should begin now, with managers abroad returning to the US to assist in the transition. This is the biggest transition since WWII so rollout must be fast and total. That means Nike needs to also rollout an America First campaign that gets this information to the public, i.e., that Nike is returning to the US to bring jobs back here for good. The ad campaign should include support from sports heroes like LeBron James who has a big interest in his community and is all about supporting the local people and their hard work. Having him become the face of the new hardworking American-made Nike brand will help to get Americans of all sides of the political aisle working together to get the brand back up and running at full speed so that the brand is revitalized and the products are made with high quality.
The hiring process must move quickly so that the company can shore up the available human capital, because more and more competitors are going to be following suit as the death knell for globalization has sounded. COVID-19 has destroyed the globalized order and now the first companies to get back to their domestic fronts and get the available human capital employed for them will be the ones to succeed.
The mechanism for self-regulation will include Six Sigma and the establishment of standards within the factory, within the marketing division, and within the Board and among executives. The mechanism will consists of one part collective decision making and one part individual reporting. Self-regulation requires both the collective and the individual overlapping towards one goal—and that is to leave politics out of the equation and get back to basics. This will be a new and improved Nike brand, one that is leveraging a devastating global collapse and using the American spirit to reinvent itself in the face of an oncoming depression. Nike is going to put Americans back to work again and improve morale by developing a culture of true inclusivity.
Nike should thus abandon its “woke culture” ad campaign and get back to its original core values of highlighting heroics on the field. Consumers like Nike because it represents the best in people in sports. It is not a brand that has traditionally been associated with activism or politics. Choosing sides in a political controversy has cost Nike loyal consumers and many have taken to social media to voice their displeasure with the brand—some even burning their Nike gear and posting the videos of this anger online. This is bad negative attention for the company and hurts its brand.
Cutting ties with Kaepernick would not hurt Nike. It would help the company to save face with the majority of consumers and it would allow Nike to turn the page and move on from its woke culture experiment. The saying among consumers now is “go woke, go broke,” and many consumers are boycotting corporations like Disney that seek to promote progressive values that they do not appreciate. Nike also could benefit from bringing production back to America. This is something the Trump administration has been vocal about and making shoes in America would bolster its image among majority populations.
Bibliography and References
Balaji, S., & Murugaiyan, M. S. (2012). Waterfall vs. V-Model vs. Agile: A comparative study on SDLC. International Journal of Information Technology and Business Management, 2(1), 26-30.
Boehm, B. (2002). Get ready for agile methods, with care. Computer, (1), 64-69.
Boehm, B. (2007). A survey of agile development methodologies. Laurie Williams, 45, 119.
Fernandez, D. J., & Fernandez, J. D. (2008). Agile project management—agilism versus traditional approaches. Journal of Computer Information Systems, 49(2), 10-17.
Freberg, K., Graham, K., McGaughey, K., & Freberg, L. A. (2011). Who are the social media influencers? A study of public perceptions of personality. Public Relations Review, 37(1), 90-92.
Cameron, E. and Green, M. (2015), Making Sense of Change Management: A complete Guide to the Models, Tools and Techniques of Organizational Change. Kogan Page: London
Kotter, J. P. (2012). Leading Change. Harvard Business Review Press.
TMZ. (2018). Kaep Deal Adds Up... WE GOT NIKE'S CUSTOMER BREAKDOWN. Retrieved from https://www.tmz.com/2018/09/06/colin-kaepernick-nike-contract-urban-consumers-market-research/