In assessing knowledge management at Nike, the strengths inherent in their culture and putting a high value on tacit and implicit knowledge sharing are shown in how well integrated new product development, innovation, marketing and supply chain at the corporate level are. Yet the company falters in the areas of supply chain knowledge management and knowledge transfer into retail channels. These two areas of the greatest weakness to Nike require a redefinition of how the company's enterprise knowledge management 9 EKM) strategy is managed, specifically in the area of knowledge transfer.
Defining an Enterprise Knowledge Management Framework at Nike
The development of a knowledge management framework for Nike needs to take into account the process areas where the company excels today, which include innovation, new product development, advertising, branding and marketing while recognizing that the company struggles in supply chain management and retail operations. Defining a knowledge management model needs to also take into account the need for managing cultural change effectively (Hernandez-Mogollon, Cepeda-Carrion, Cegarra-Navarro, Leal-Millan, 2010). For Nike to be successful they must blend content management, collaboration, navigation, search and retrieval together at the framework level. Supporting the framework with security and audit controls, records management and Business Process Management (BPM) is also essential. This sets a scalable platform in place to support a framework that can also be used for creating learning management, collaboration suites and expert networks across Nike. Structuring a network using this approach allows for change management at the collaboration level, which is the one of the greatest cultural strengths that Nike has today. The challenge is to take this internal cultural strength and propagate it across the supply chain and retail networks. The intended knowledge management framework shown in Figure 1 for Nike capitalizes on the tacit knowledge being generated across research & Development, and how that knowledge is being shared across marketing, finance to create an expert network. The fact that Nike has become a learning organization is attributable to the Expert Network shown in the application layer of the proposed model. Conversely, the areas of weakness inside Nike need greater records management and audit control (in the case of the supply chain) and also needs more effective learning systems, specifically aimed at the needs of the retail operations and knowledge transfer to retail stores.
Figure 1: Nike Knowledge Management Model
Source: Based on knowledge management concepts from ARM Research, 2010 Active Knowledge Framework
Nike has also invested heavily in technology to support their knowledge management strategies as well. The investment in the i2 Demand Planner software for managing their supply chains initially caused even greater confusion as the company did not have its supply chain knowledge management processes nailed down well enough before automating them (Barrett, 2003). The same is true of their knowledge transfer systems for training retailers (Sweeney, 2004). Nike has historically taken a very process-driven approach that is supported heavily by technology. To get an idea of how far Nike has gone in terms of their validation of new technologies, the Appendix provides an overview of the vendors they have either purchased software applications from or have evaluated (Barrett, 2003) (Sweeney, 2004), all of which are shown in the graphic, Knowledge Management Industry Model -- Solution Providers.
The following are the most significant events in the history of Nike. Collectively these events have created a culture that has tightly melded together research and development, marketing, branding and...
In addition, these events have shaped the supply chain into a series of processes that have proven to be very difficult to manage from the standpoint of tacit and explicit knowledge management. In addition the lack of focus on retail operations in multichannel and multitier environments has also been detrimental to the company as well.
1960s -- 1970s
Bill Bowerman and Phil Knight in Portland, or launch Blue Ribbon Sports and the founders sell athletic shoes out of the trunk of their car. During this decade, the company moves to adopt the Greek goddess Nike as their symbol, who in Greek mythology stands for the qualities of strength, speed, and victory. The founders realize the value of strong branding as their sales quickly reach $350,000 for the first full year using the Nike brand. Also in 1971 the company adopts the Swish logo and also begins work on the their first celebrity endorsement with tennis great Ilie Nastase. The company continues to aggressively experiment with highly differentiated shoe designs while also making major investments in branding with celebrity endorsements. Phil Knight sees the need for having athletes competing in world competitions being the most important catalyst of marketing. To this end, the company successfully convinces American and world record holder Steve Prefontaine to wear their shoes during the Olympic trials and American track & field championships. R&D emerges as a major force during this period in the comp any; history with the Waffle Trainer and Nike Air technologies are perfected and launched in key products. By this time the trust is being forged quickly between R&D, marketing, sales and branding to the point where the company can introduce a new product in less than 16 weeks of necessary (Stonehouse, Minocha, 2008). As the 1980s begins Nike has created explicit and tacit knowledge processes to support new product introductions and also make new product development more efficient, yet has not define equivalent processes for managing their supply chains or distribution channels. This is the area of the timeline where suppl;y chain and distribution problems take root and will eventually lead to greater levels of frustration and costs for the company later on.
In 1981, Nike officially changes its name. Nike also creates the Air Force 1 basketball shoe, further validating how effective the company is at managing new technology development, yet also showing how difficult the transition from their R&D labs are to sourcing materials (Barrett, 2003). Nike has learned that working with celebrities is the best brand-building they can do, and in 1984 they partner with Michael Jordan and also start a shoe line dedicated just to him. The results of the R&D and marketing knowledge management working together with Jordan lead to the company reaching $1B in sales in 1986. By this time the company has well-defined knowledge management processes for linking R&D, marketing, sales, branding and finance. In 1987, Nike introduces Air Max, and in 1989, the company enters the European football market. During this time period the "Just Do it' tag line is created in addition to Nike signing Bo Jackson. During this time, Bo Jackson was playing baseball for the Kansas City Royals and paying football for the Oakland Raiders.
The 1990s are a challenging decade for Nike as several acquisitions are made that launch the company into entirely new sports including hockey and golf, with the signing to Tiger Woods in 1996. The company also embarks on an ambitious superstore concept called NikeTown. These stores are located in the major shopping areas of the world's most sports-conscious cities including several in Los Angeles. The rapid expansion into entirely new sports areas and the retail expansion of their own stores both forced entirely new processes for knowledge capture and management onto the company, both of which they were unprepared for. The lack of supply chain planning and forecasting for example led to significant shortfalls of products which would eventually become acute several product generations later (Barrett, 2003). The lack of consistent focus on retail channel knowledge sharing and management would lead to significant shortfalls in training associates in these stores and getting them profitable, which many of them never attained (Sweeney, 2004). During this period of time the lack of ethics with regard to supply chain management and sourcing of products from 3rd world nations would lead to a major consumer backlash and a glaring error in terms of knowledge transfer and knowledge management shortfalls in terms of supplier ethicacy (Kanter, 2008). Nike would continue work through the 1990s and struggle with business models that did not capitalize on their core knowledge management strengths. It is during this decade that the company begins to see the accumulative effects of strong knowledge management in their team-based approach to development and product launch, yet it is also a decade where the glaring lack of knowledge management expertise in
More recent surveys have seen Nike continue to trail the industry average, indicating a long-term trend of only somewhat meeting customer expectations (ASCI, 2009). Wholesale and retail channels are a critical external stakeholder because of the role that they play in the company's route to market. Without support of wholesalers and retailers, Nike could only rely on its own-branded stores to bring its shoes and apparel to consumers. Nike's distribution