Former Nike CEO John Donahoe's Communication Risk Taking and Errors
Why leaders can struggle with effective, critically-important communication
CEO appointments can go terribly wrong, even at the biggest companies and communication shortcomings can play a bigger role than expected.
Leaders can come to forget how vital interaction fundamentals are to leadership and success and to mitigating problems so they don’t end up being doubted, distrusted, failing and replaced.
“Nike spent nearly $104 million on pay and benefits for John Donahoe during his near five-year tenure atop the sneaker-maker before replacing the former Bain & Co. executive in a bid to revive the brand,” wrote Natasha Solo-Ryans at Bloomberg.
“During that time, Nike lost nearly $40 billion in market value.”
From a communications perspective, Donahoe additionally made noticeable mistakes, says Jess Jensen, the founder at Co-pilot Communications.
CEOs, she says, need to be skilled in multiple areas, “… visionary, decisive, innovative, adaptable, listener, relationship builder and of course, a world-class communicator,” Jensen states.
She talks about where problems can begin to develop.
“Often, leaders rise through specific practice areas like engineering, finance or product development and naturally lean on their strengths in those domains, Jensen points out. “They may undervalue or underestimate areas where they are less familiar, uncomfortable or inexperienced.”
This is to be expected, she adds.
“Most CEOs, for instance, don’t rise through the ranks of communications,” Jensen says. “Is it any wonder then that they often struggle with effective communication?”
She remembers and briefly details a story from her career to illustrate this point.
“I once worked at a company where quarterly all-hands meetings included projecting the company’s P&L on screen. Terms like EBITA and P/E ratio were thrown around as if everyone in the room held a degree in finance,” Jensen recalls.
“Most employees didn’t have this background, but leadership assumed everyone understood these terms. I had gone to business school but it had been years since I analyzed a financial statement. I found myself Googling terms just to keep up.”
That type of presumptive thinking can be problematic.
“When leaders lose touch with everyday employees and fail to communicate clearly, consistently and candidly — especially in times of challenge — they risk alienating key stakeholders,” Jensen contends.
“Emotional intelligence and the confidence to admit when one is wrong are vital skills for CEOs to earn and maintain trust with employees, investors and customers.”
Nike and Donahoe did not work well together and fell short of expectations yet the dispatched CEO didn’t fall short on all levels.
“Donahoe did many of the right things,” Jensen observes.
“He embarked on a global listening tour across Nike’s campuses, engaged with employees and hosted “Ask Me Anything” sessions. He publicly positioned himself as a servant leader, focused on putting the team ahead of himself and shining a light on others. These actions should have established him as empathetic, open, curious and ready to contribute.
“In terms of his mission—modernizing Nike’s tech stack and boosting the direct-to-consumer (D2C) sales channel—he succeeded.”
There were problems for which he didn’t have full control and didn’t forecast expertly.
“The fallout with key retail partners like Foot Locker and DSG seemed to be collateral damage he didn’t fully anticipate once the pandemic eased,” Jensen says. “It’s possible the relationships and communication with these key retailers were strained, given his focus on internal priorities and D2C growth.”
Organizations, their leaders and boards can struggle to predict leadership problems ahead. There were areas where he could have performed better and satisfied needs.
“Prior to joining Nike, Donahoe was less active on social media and this lack of public engagement became a liability that was difficult to overcome once Nike’s sales began to decline,” Jensen says. “Building a personal brand is like insurance. You need to invest in it before a crisis arises.”
Companies may be able to somehow, sometimes weather this type of communication error yet it is challenging and high risk to count on it.
“Some company cultures are more fragile than others,” Jensen says.
“One might ask, why couldn’t Nike accept a non-company veteran at the helm? Was Donahoe set up for failure because of his lack of deep ties to the sneaker culture? This may have stifled innovation and it’s something other companies should be mindful of to avoid a walled-garden mentality.”
She speaks to weaknesses of thinking that often result in elevated risk.
“A reluctance to embrace fresh perspectives, new methods or outsider ideas is a significant red flag that leaders should watch for,” Jensen says.
“I remember when I was new at one company, my boss said, ‘We know you come from (her previous company), but that’s not how we do things here.’ I went home feeling defeated, wondering why they had hired me if they didn’t want to leverage my experience or explore new approaches.”
She offers executive communication advisory.
“It’s essential for leaders to build a personal brand platform online. Your digital presence is often the first way people engage with you and it serves as a critical channel for demonstrating your leadership style, values and credibility,” Jensen says.
“For CEOs, establishing this early — through social media, thought leadership and engagement — helps solidify trust and influence before you need to rely on it.”
She points out the reality of the insurance quality that she previously mentioned.
“As we saw with Donahoe, the lack of a strong personal brand online can make it difficult to recover when challenges arise,” Jensen says.
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