Corporate Lessons - The Exit of John Donahoe as CEO of Nike
John Donahoe is good. But then, he had some problems.
What was the thought process?
Donahoe was chosen for his stint as eBay’s CEO and as a technocrat who will help in bringing Nike directly to the customers. He proved excellent with his expertise as a technocrat during the COVID days.
What went wrong?
Underestimation of the importance of retail partners - some of them are removed and some of them saw reduced merchandise supply. This would give a window for competitors to hain share in market through the newly freed shelf space in the stores of the suffering middlemen
No deep knowledge of the field resulting in reliance on data and advice, and not enough innovation leading to consumer boredom
Cost-cutting as a solution to improve margins - layoffs and more importantly, reduced support to constituencies like local running groups which create grass-root interest
Lessons to learn:
Core business and core business interests are primary when choosing a leader. Anything additional or any direction change is additional but not primary.