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In 1986, after Nike had fallen to No. 2, behind Reebok, and the stock price had gone from a high of $28 to less than $7 a share, Knight told a meeting of his employees in a Portland warehouse: "We just crossed a billion dollars in sales, but I'd rather be the president of a great $500 million sports and fitness company than the head of a badly run billion-dollar sneaker company."
Four hundred employees were laid off, and by the end of the year, 275 more were cast out. The second layoff in particular seemed to knock some of the child out of the company. Bowerman's Lombardiesque observation that "nobody ever remembers Number 2" was repeated often, and the raucousness was replaced by a determination never to get blindsided again.
By the time of "the transition," between 1985 and '87, Jordan had signed on, and Knight had decided to put the shoe show on national TV. Nike's grass-roots basketball man at the time, Sonny Vaccaro, says that at first, Knight and his wheeler-dealer adviser on athlete promotions, Howard Slusher, didn't even want Jordan on their team. However, the running boom was fading fast, the NBA was becoming increasingly marketable, and consumers tended to wear their court shoes on the street.
The idea of Air Jordan was to create a "segment," a marketable package linking the shoes, colors, clothes, athlete, logo and, most important, inspired television advertising that would set the other elements of the marketing machine into motion. Air-cushioning technology developed for runners was built into the Jordan shoes, and though the famous first model wasn't much technically, the segment idea worked. Eventually Air Jordan was joined by the Air Force segment, designed for players like Barkley and Robinson, who hit the court hard. The Air Flight segment was designed for players who imagine themselves as deer-like leapers and dream of flying across the lane like Pippen.
The new marketing machinery pulled technology across divisional lines again in 1987 to invent cross-trainers, shoes designed for people who participate in a variety of sports. That same year Nike appropriated what many observers still believe to be a sacred item from another cultural realm, the Beatles song Revolution, to promote running shoes. Bo, according to Nike, could "do anything" in '88, and in '89 Bo quite simply knew. Whatever a consumer wanted Bo to know, he knew. "Just Do It" had been inserted in the popular brain pan in '88, and for any "it" an American wanted to pursue, Nike had the right pair of shoes.
The never-quit credo of Bowerman, the athlete-against-the-establishment ethic of Prefontaine and the lessons of Reebok's rise are discernible everywhere in a Nike corporate world dominated, nine to one, by employees who weren't on the payroll during the layoffs and who, for the most part, were children when Prefontaine was killed. Only Knight utters the officially proscribed word fashion, because fashion is a Reebok term. "We say design instead," says Knight. Nike employees who leave for other shoe companies often become nonpersons. A majority of the current employees claim never to have read Swoosh. After all, one of the authors is married to Strasser, who left Nike a few years back and now runs Adidas USA.
A recent survey showed Nike to have the highest levels of understanding and acceptance of company policy ever recorded by the national firm that conducted the study. Members of the Nike corps of EKINs—shoe experts in their mid-20's who travel from store to store to talk to retailers about the technicalities of new Nike shoes—are known to tattoo a Nike swoosh on some part of their bodies, usually a foot, but not always.
A Nike old-timer of 37, a serious sub-200-minute marathoner named Tom Hartge, stood in front of a blackboard one morning, trying to explain the company's latest version of "the matrix," a free-ranging system of corporate governance designed to mediate the romance of an entrepreneurial past and the mundane requirements of a big company. Hartge, the company's divisional marketing manager for running, is pure Nike, so much so that colleagues often say he embodies "the heart and soul of Nike." He reads track magazines, trains on the Jeff Johnson track and refuses to drink a beer made in one of the local microbreweries, because it is partially owned by the apostate Strasser. And he knows as much about running shoes as anyone in the business.
Nike still dominates the running category in the U.S., but it is now only the fourth-largest category at Nike. (Basketball is first, cross-training became No. 2 in 1990, and, surprisingly perhaps, the mini-Air Jordans and little Agassi shoes have made the kids division No. 3.) Along the top of the blackboard Hartge listed Footwear, Apparel, Advertising, Sports Marketing and Retail. A "silo" descended below each category indicating all the work and workers in each area. "My job is to influence everything that goes on across the matrix," said Hartge, drawing a line into and through each silo. "I'm an influence broker."
Those who "bounce around the matrix," as they say at Nike, soon realize that the capacity to influence others is the key to intracorporate success. Hartge talks about "lobbying" various internal constituencies to get things done. People who don't "like to get in other people's faces," as one executive puts it, don't do well at Nike.