The following is an excerpt from a presentation by Randy Lyons, NDe EMEA Sr. Director, and Michele Power, CFO Nike Direct EMEA, at Nike titled “My Partner the CFO: At the Table Together to Drive Growth.”
You can watch the video of the presentation, which was originally delivered at the 2018 DevOps Enterprise Summit in London.
We’re super excited to share…
- The transformation that our business has been going through
- The transformations my team has been going through as a response to those changes in the business
- My own personal transition that I’ve been going through with the help of Michele over the last couple of years
A little over a year ago
Mark Parker, our CEO for Nike globally, announced to the world that our company was ready to turn the corner and move into our next phase of growth. We would do that by getting closer and closer to our consumer, closer to where they are, closer to where they play, and closer to where they interact to have access to Nike. And we would do that and lead it with digital.
We would lead that growth through the interactions that we have with our consumer — whether that be in our stores or with our digital channels. It’s an exciting point to be on the ground in EMEA because we are also going through our own transition, and we’re building out an extended engineering organization.
How we interact with the consumer today
Behind me, you see a little bit of how Nike’s organized.
To help set grounding for this conversation I want to point out the marketplace where we believe our influencers are and where we focused on experimenting to try out some new ways of interacting with our consumers. We are definitely working on this culture of experiment, test, learn, and then, scale from that. For us, this marketplace was located London, Paris, Berlin, Milan, and Barcelona.
On touchpoint we have with the consumer is in our stores. We have about 750 stores across EMEA. About half of those are owned and operated by Nike, and the other half is operated by our partners. It’s sort of like a franchise model where our partners are operating that store, but when you walk in the door, there’s a swoosh over it.
The other touchpoint is across our digital landscape, which is a very world-class experience all grounded by our core platform of Nike.com. We’ve introduced some new apps over the last few years, two of which, The Nike app and the Sneaker app, we just introduced this past year.
What’s important about all of those touch points is that we have one member profile that weaves those experiences together. For example, when you log in with your profile and that profile follows you from core.com through the app experiences and even down into our stores, so that we get to know the consumer more and more and it allows us to curate that experience for them.
That gives us a great platform to take advantage of the major shifts that are happening all around us today. I don’t need to tell you— mobile dominates. Your mobile phone is practically an extension of your limb at this stage, but that means our consumers are very empowered and very informed.
An actual fact, 80% of consumers consult that their phone before they make a purchase in store. This means their experiences have to be seamless. A point of contact can’t be a point of friction, but this empowered consumer wants more. They want personalization. They expect us to know them, to get to know them and to exceed their expectations.
How are we going to do this? Just one word. Speed. We need to go fast if we’re going to go at the pace of the consumer. How are we going to do that? By working closely with the principles brought together in your movement and partnering with technology. We also need to understand that to move fast, we have to test and learn and sometimes, test and fail, and test and learn again.
As well as that personalization, we also have to take advantage of the disruption in our marketplace. This disruption gives us an opportunity, a new way to connect with our consumers because they don’t just want fast and easy. They don’t want to just do transactions. They want distinctive experiences, wherever they interact. A tall order with that demanding consumer right in the center, with these skyrocketing expectations.
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But, who cares have much their expectations skyrocket? Let’s just surpass them by leaning into the opportunities for growth. There are so many opportunities in this next explosive pace of growth brought to life by all the great technologies that are entering our world.
First and foremost, at its core, what’s critical is that membership experience — making sure that we have one member profile. Whether you want to track that run you might be thinking of doing tomorrow morning, or you’re searching for your new sneakers, or you just want to access the great product, we need to make sure that you just have one member profile.
Why? Because we want to go on the journey with you.
Membership is about closing the gap between the emotional connection you have with the brand and accessing what you want. If we build those lifelong relationships, we can add inspiration, value, and help our members as they go through their journey.
That’s just one element of this explosive opportunity for growth. Another key element where we have to partner together is on what we like to call NCX, our Nike Consumer Experience. This has to be a unified experience, whether you’re shopping in a home store in London, visiting a partner store in Paris, or anywhere across our ecosystem, it has to be relevant for you at that part of the journey. It has to be an elevated experience, and it has to be exciting.
As well as that, there’s even more opportunity for growth if we partner closely with technology. There is a lot of new business models out there. I mentioned earlier about the disruption, but disruption gives us a chance to new business models. A small example we have here in EMEA is we already have an infantry partnership with Zalando and some of our other key partners across EMEA.
All this shift and all these opportunities, it’s a lot coming together, so we have to make sure that we focus our investments, to make sure that we focus them on the NCX, fueled by digital and serving the consumer. To do that, we had to change our game and think about how we would do things differently and raise the bar to embrace these dynamic shifts and leverage these opportunities.
As a technology leader, I get chills thinking about when our CEO told the world that we were going to get closer to the consumer, and we’re going to drive our next level of growth leading and fueled by technology. Chills and butterflies. But, Holy Moly, you need to be careful what you ask for. I thought, ‘Am I ready for this? Is my team ready for this?’
I did a little bit of introspection. I worked with my leadership team. We had just come off of an engagement survey, and I was really nervous about it as we were building out this future of how we were going to contribute to the overall growth of the company, were we ready for that? Did we have the right environment? A quote that comes back to me over and over again, I think it’s attributed to Peter Drucker, “Culture eats strategy for breakfast.”
I absolutely subscribe to that and believe in it, and so we went to work on our culture, in creating the right environment for our team.
the CULTURE transformation we went through
The first thing that we had to do was we had to change the way that we thought of ourselves. As a technology organization, there was a lot of language on the floor about how we supported the business, how we helped the business, but there was this divide between the business and the technology team. We realized that we couldn’t be in support of the business, we had to be of the business. We had to be the business in order to move through this growth cycle. That’s the mantra we created, ‘We are of the business.’
We also realized we had to underpin this with some actual actions. One example of this is that we changed the format of our weekly all-team huddle. First, we did a little education on the core KPIs of the business and then, we started talking every single week about the performance of the business. How did we perform in .com last week? What were the results in our factory stores last week? How did our partners do last week? How did they achieve the KPIs? How did we support that achievement, or did we have an outage on .com that detracted from that?
In the beginning, it was a little awkward. The team wasn’t used to talking in those terms, but then questions started coming up from the team and they were really insightful about how their work contributed to those results.
The other change that happened was in the interactions. The interactions between Michele’s team and my team, the interaction between our teams and the supply chain, between the GMs, between the merchandising teams, etc. There were different kinds of conversations that were happening, different kinds of questions that were happening.
When you had to solve a problem, the questions that came up were always through the lens of the business, and that was a very powerful change that started to happen.
Making Sure we’re all headed in the same direction
Now the team not only understood at a very, very high level what the strategy of the company was, but not necessarily how their work contributed to that strategy. In our engagement survey, one of things we saw is that our people didn’t understand how their work contributed to the work we were doing across the business.
We decided to spend more time talking about strategy, for example, there are a couple of key moments through the year where I shared the detailed strategy with the team, and we field-tested a little bit. We started looking across the organization, and at individuals, we’d say, “Can Martine see himself in that strategy and how his work relates to it? Can Saunders see his work in there? Can our Concha see her work in there?
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It couldn’t just be about the folks who were working on new capabilities and new features. It had to also be about the support organizations and if they could see themselves in that strategy and how they contribute to it. Can the QA testers see themselves? Can the scrum master see themselves? Can the product organization see themselves in that strategy?
If the answer was no, we went back to the table and worked on the language a little bit.
More importantly than that, after we talked about it, then the team had to come pitch to us. We looked out six months, and we asked them to tell us, what’s their work through the lens of the strategy? We’re constantly looking at the work that each individual’s doing and connecting their work directly to how growth happens.
focusing more on the environment
This is not rocket science, it’s sneakers and T-shirts and leadership 101. Recognize and celebrate. The team had given us feedback that they didn’t feel like they were recognized for the value they contributed or their work.
We were like, “Hey, hang on. We do a big awards ceremony twice a year. What do you mean your work is not recognized?” But we realized that it just wasn’t a part of our culture to recognize everyone in the organization on a regular basis.
We took that weekly stand up that was anchored on the front end by the business results, and anchored it on the back end with shout-outs. We wanted to take the responsibility for recognition off the shoulders of leadership and put it out onto the team. Now, the team does a shout-out at the end for someone who has really gone above and beyond, someone that helped them solve a problem, etc.
Again, this started out a little awkward, they weren’t very comfortable with it, but now, I have to cut them off many weeks because they’re so into giving shout out’s for their partners. They also found that those shout-outs started to break down walls and barriers, which helped us start to become one team.
What we found was that we have these org charts, and the org charts all have lines on them. Those lines under the guise of ‘healthy competition’ started becoming ‘unhealthy competition.’ Those lines started becoming hurdles to cross over. Those lines started becoming walls to break through, and it became really difficult to react with speed. It got much slower to accomplish anything that happened.
We started this mantra, #oneteam, and we started opening up our doors. We started opening up our walls. Our all team huddle is a broad team huddle now, so it’s not just product and engineering. It’s support. It’s QA. It is procurement. It is legal. It is the talent acquisition. Anyone who needs to come and play on the field with us to make sure that we’re able to achieve our objectives, we bring them in. Those strategy sessions that we pitch back on, we bring them in and we include them.
Then (FINALLY) there is fun
This needs to be a great environment for people to come and work every single day, every single day, not just the day we have the happy hour, not just the day that we celebrate and do the awards thing. Every day. We want to make sure that we take our work seriously but not ourselves. It needs to be an environment where people can laugh, where we give energy instead of taking energy
This needed to start with the leadership.The leadership team needed to spend more time on the floor joking, laughing, giving energy, and letting the team know that it’s okay to have fun. It’s all okay to have a good time. We talk the serious conversations behind closed doors, and when we come out, it’s all about making sure that the team is energized and that the team is headed down the right path.
If this was the work that we had done on my teaM
I also realize that there might be some work to do on myself.
When I came to Europe, it was with the expectation that I was creating something that was a little different. We would be headed down this path of distributed engineering, and I would build that capability for the organization and add capacity globally by building out an engineering capability in Europe.
But, then this transformation in the business came about, and I realized that I needed to change as well.
I needed to move past where I had started in my career with traditional technology from being an order-taker and become an advisor. I thought I had gotten pretty good at being a partner, but what I realized was that I was not at the table as a leader for the business. I was on the org chart, but I was sitting at the back of the room, not with my feet under the table. I needed to do some work on myself to become a business leader with the foundation of technology beneath me.
I needed some help with this, and I got a little vulnerable, and I approached Michele and asked for some help. I asked for Michele to help me go on this journey to become a business leader. I asked her to help educate me on the P&L and how technology was going to contribute to the P&L. I asked her to hold me accountable and not let me back away from the table but to pull me into the conversation as we’re building out strategy. Because this transformation we were about to go through, we would not be successful if I could not be in in the game with the team.
The reality was that I needed Randy’s help just as much. In the shifts that I shared about earlier, what you will have seen as the common theme is that technology is embedded in how we connect with our consumer, and how we connect with our consumer defines our strategy. Therefore, technology is part of every step of our strategy. The days when technology was a ‘cool toy’ or a’ nice-to-have’ are long gone. It’s part of how we interact with consumers.
I had also realized that I had missed a few moments and that I needed technology in the room real time. To do that, we did need to talk the same language. That’s why the cultural shifts that Randy had been going on with setting the KPIs were so important because the language we talk is not finance or technology. It’s strategy and the consumer.
But we needed not just Randy and I to speak the same language, but also our teams. They needed to be thinking together in terms of the consumer and the strategy. To give an example of how this worked and the benefits of it as let me share with you how it happened in London. As Randy mentioned earlier, we’re focused on a few key cities. Cities are the sharp point of change. London is one of the most dynamic cities at the moment.
You may have seen the comments on social media about the “Nothing Beats a Londoner” campaign. That was all going on at the same time as we were launching the Nike+ app and the Nike sneakers app. To bring those to life, you have to go back to when we had our earlier strategic discussions. If I hadn’t had that connection with technology and realized that I needed that expertise in the room real-time, we probably wouldn’t have taken the right foundational steps to be ready to launch those. I would probably have had to do a lot more rework.
I’m not against testing and learning, but I am against not having the right people to help you, and it resulting in going back and redoing something just because you didn’t communicate in time.
What does this mean in our new ways of working, which we’re still improving and still learning? The day-to-day reality is I need technology in the room for almost all the business meetings. Whether it’s the three-year strategic plan, whether it’s the 90 days for the next quarter, whether it’s re-prioritizing or balancing investments, I need Randy in the room. Even when he’s traveling, I need to stay in constant contact.
Now, you might be thinking there’s no escape. You’re stuck with the CFO. Well, maybe you can think of it in a different way. Just imagine the impact you can have given that its technology that’s impacting how we connect with consumers.
It’s amazing— the transition that we’ve been through. Now, we can tag-team quite a bit where I know that if I’m not in the room, I completely trust Michele to represent me, and vice versa. This has been a transition that’s taken us a while to get to and one that we’re continuing.
If you are going on your own transformation internally, I would encourage you to look at culture first to help you with that transition. I would also encourage you to be on the pitch with your team as a member of the business.
And when you’re on the pitch with your team, you’re not just any player. You’re the star player. Your CFO needs you. They need you now, today.