Organisational culture is defined as a “consistent, observable pattern of behaviour in an organisation” (Watkins, 2013). The patterns of behaviour that define a culture are reinforced through the artefacts of culture, including slogans, imagery, written statements, posters, mission statements and vision statements. Culture is therefore reinforce directly by the organisation, which sends the message about the patterns of behaviour that define the organisation repeatedly, because repetition is critical to ensure that the message is received and implemented consistently. Hofstede (2015) argues that there are a number of different dimensions along which an organisation’s culture can be understood: , internally-driven vs. externally-driven, work discipline, open vs. closed system, degree of formality, employee-oriented vs. work-oriented and the degree to which an employee is expected to identify with the organisation. Some organisations have strong cultures, others have weak ones, but the best organisations have cultures that closely align with firm objectives. A good example of this is Nike.
The Nike Strategy
Nike works with a differentiated strategy. Its athletic apparel is not necessarily any better than other leading brands — they often use the same suppliers — but Nike seeks to position its brand as being superior. This is a key component of its advertising message, and is reinforced in the approach that the company takes to its athlete endorsements — it aims for the best players of a given sport. Nike positions itself as a winner, an approach that has helped it when entering new markets where objectively it might have had disadvantage, such as soccer. Yet, Nike blends this with empowerment, a cultural attitude that everybody is able. As this is a company that seeks to win its business, Nike has developed a culture that blends hard work with a desire to win, a culture that drives its employees to work towards these objectives. The culture is unique, and there is a high level of buy-in, two essential components to an effective organisational culture.
Nike’s Culture
The organisational culture at Nike is reinforced in a number of ways. First, the company seeks to foster a spirit of belonging among its employees. There are slogans that everybody ends up memorizing, and some such as “if you have a body, you’re at athlete” are the sort of inclusive, empowering slogans that the company uses to make its products attractive to a broad audience. This part of the corporate culture is important, because to win an industry, Nike needs to be able to sell to a very broad market. Positivity is the only thing that you can sell to people with respect to their fitness — people want to hear that whatever they are doing is good enough, and such reinforcement coupled with alignment to a top athlete creates very positive brand associations. So this element of Nike’s culture directly supports its strategy.
Another element of the organisational culture at Nike is that it promotes its own history among its employees. There are icons, such as a Winnebago used for meetings, to represent what founder Phil Knight used to sell shoes out of, and the waffle iron destroyed by co-founder Bill Bowerman while attempting to produce rubber soles is a museum piece at company headquarters. There is an element of humility in these items, but they also serve to remind that from humble origins, the company arose into the dominant entity that it is today, and that happened with hard work (Nisen, 2013).
Nike also leverages its culture to drive innovation at the company. The culture is built around constant innovation and hunger, a drive to be the best. The company recognized at some point that being the dominant player in its industry was not a permanent position, but one that it would have to earn time and again, and Nike built this into its organisational culture. Nike encourages its employees to have a high level of individualism, which alone rejects groupthink, but then reinforces this with several slogans that it uses — “it is our nature to innovate,” “evolve immediately” and “simplify and go” (Jackson, 2013). This is another example of how organisational culture promotes a strategic objective. Nike needs to continue to innovative, in order to enter new markets, and in order to stay on top of a competitive marketplace. If Nike wants to continue to be viewed as the best in its industry, it needs to have a steady stream of new products and designs that represent the cutting edge of the industry — they are not just about operational excellence but also about delivering on innovation. This is why Nike has incorporated innovation as a key component of its organisational culture.
Strategy Execution
Executing strategy is somewhat different from formulating it. Nike relies primarily on design and marketing, as it outsources production. So for Nike, executing strategy relies a high level of creativity, a deep understanding of customer needs, and a high level of commitment to the company on the sales side. Realistically, this means that Nike needs to attract high quality employees. One advantage that it traditionally has had it that Nike was always the biggest American athletic apparel company, so it did not have much competition for talent. But perhaps just as important, Nike has positioned itself with a great employer brand, so that it can continue to attract talent that might otherwise overlook this industry (Anders, 2012).
With the right people in place, Nike also relies on having a culture so strong that execution is consistent across its many product lines and around the world. This allows Nike to present a uniform face to its customers, which can be valuable to build the brand. In addition, Nike can enter a new industry — soccer, for example — and be able to enjoy rapid growth because it has been able to apply the lessons it learned in other sports to excelling in that one. As a result, Nike has been able to carve out a very strong position in the world’s top sport, enhancing its value.
A last point on execution is that Nike culture is one of empowerment. Thus, not only does it have good people, but those good people have the ability to run with ideas that they feel have power. This level of empowerment should correlate with better results, because it means more ideas, which then must be stress-tested for merit, so the best ideas that Nike can come up with are ultimately better than the best ideas of a company where employees maybe are not as empowered. The high level of buy-in that Nike gets reflects the positivity of its organisational culture, in particular the empowerment aspect.
Conclusion
Nike has become so successful as the result of a number of factors, one of which is the organizational culture, which promotes empowerment, positivity and being the best. Nike builds its employees up, and as a result has become a top employer brand, drawing in the best talent. Moreover, the organisational culture is closely linked with the company’s strategic objectives. That high degree of strategic alignment means that the culture supports Nike’s work, rather than acting as a constraint on it. This only serves to help Nike to reach its objectives more quickly and effectively.
References
Anders, G. (2012). The 20 most : From Google to Nike Accenture. Forbes. Retrieved November 21, 2015 from http://www.forbes.com/sites/georgeanders/2012/10/11/the-20-most-desired-employers-from-google-to-loreal/
Hofstede (2015). Organisational culture. Geert Hofstede.com. Retrieved November 21, 2015 from http://geert-hofstede.com/organisational-culture.html
Jackson, L. (2013). Strong organizational culture: How Nike drives innovation. Corporate Culture Pros. Retrieved November 21, 2015 from https://www.corporateculturepros.com/2013/06/strong-organizational-culture-how-nike-drives-innovation/
Nisen, M. (2013). At Nike, workers quote the company’s maxims like the 10 commandments. Business Insider. Retrieved November 21, 2015 from http://www.businessinsider.?r=U.S.&IR=T
Watkins, M. (2013). What is organizational culture? And why should we care? Harvard Business Review. Retrieved November 21, 2015 from https://hbr.
