Weekly Wire
Memphis Flyer Nike Psyche

By Josh Feit and Tanuja Surpuriya

AUGUST 25, 1997: 

Even by New York City standards, it was an impressive party.

To celebrate the opening of the Manhattan Nike Town at 57th and Madison last fall, Nike held a gala. Its five-story footwear cathedral was outfitted with a giant movie screen, automated product displays and 66,000 square feet of Nike gear. More than 400 staffers, VIPs such as Donald Trump and Carl Lewis and select members of the media crowded into the space to toast Nike's new digs.

When Nike CEO Phil Knight walked in, the employees hovering above on the balconies broke into a syncopated cheer: "Just Do It! Just Do It! Just Do It!"

It lasted nearly 10 minutes.

"The chant was echoing all around the building," says Nike employee Vizhier Corpuz. "It was unbelievable. They had so much pride in the company they were working for. I was almost crying."

To Corpuz, 30, Nike isn't just a 9-to-5 gig.

"The Swoosh represents something other than just a company," she says. "It represents a whole value system."

Nelson Farris, 47-year-old head of corporate education, agrees. The longtime employee, who has a Swoosh tattooed just above his ankle, says working at Nike is a profound experience. "It stops being a job," he says, "and starts to become a way that you are defining the way you are living on earth."

Are we talking about a company that makes sneakers? Or is it the Peace Corps?

As it turns out, the real Nike story isn't about its hyper revenues and profits, nor about its unfair labor practices in Southeast Asia, nor its radical redefinition of marketing. Instead, it's how the Beaverton, Oregon company has done what other billion-dollar firms only dream of: making employees feel like their work has more in common with Mother Teresa than Henry Ford.

Coleman Horn, a former Nike designer who left last year to work at Reebok, says he misses the spirit at Nike, a spirit he has difficulty capturing in words. "It's ineffable," he says. "If it exists at Reebok, I haven't seen any signs of it."

"It's definitely different over there," says John Horan, editor of Sporting Goods Intelligence, the footwear industry bible. "Where else do you have people tattooing themselves with the company logo?"

Roy Agostino, 33, Nike's director of international public relations, says he first realized it was more than just another company when he saw a Nike poster featuring a lone jogger facing off against a steep hill. The poster read, "There is no finish line."

"It was that profound, multidimensional thought," Agostino says with a straight face, "that made me realize, 'Hey this isn't just some typical company.'"

For other employees, it's Nike's rebel spirit-be it challenging NBA officials over shoe styles or shaking up the Olympics committee over uniform and advertising regulations. It's not exactly Muhammad Ali dodging the Vietnam War or African-American athletes raising their fists in protest at the '68 Olympics, but for many, it seems to work.

For Aaron Cooper, whose long, rock-star hair, baggy shorts, Nike socks and 5 o'clock shadow give him the aura of a beach-bum philosopher, the moment of truth came when he first went "bro-ing."

"Bro-ing" is industry chatter for going into the hood and saying, "Hey bro, want to check out some shoes?" It's a play on the term "pro-ing," or "pro deal," which originated in the ski industry around the tradition of letting skiers test out new skis. Every three months, Nike introduces a dozen new basketball shoes, and it has become standard procedure for marketing and design staff to visit Philadelphia, Chicago and New York with bags of samples to get reactions from ghetto kids.

Cooper, a white 26-year-old art-school grad from Pasadena who designs basketball shoes, claims that, for him, going into the city was more than market research. It opened his eyes about the importance of his product. "I don't want this to sound arrogant, because it's not that way," says Cooper, sitting in his workspace on the fourth floor of the Michael Jordan Building.

In Harlem last summer, Cooper said, "We go to the playground, and we just dump the shoes out. It's unbelievable. The kids go nuts. That's when you realize the importance of Nike. Having kids tell you Nike is the number one thing in their life -- number two is their girlfriend."

Some people see "bro-ing" as crass commercialism, especially because Nike shoes typically cost more than $100. Cooper sees it differently. "It's the broad scope of recognizing them as athletes, not just consumers," he says.

Cooper isn't the only Beaverton employee who believes that Nike deeply affects people's lives. Juliet Hochman, a former Olympic rower, Harvard grad, and founder of a grassroots organization that works with kids in South Africa, says, "Nike is like a well-funded nonprofit. Nike is in the business of active hero creation."

For Hochman, providing heroes and role models-especially for young girls-is important work.

Sitting in her cubicle shadowed by a poster from her South Africa days ("Vote for Justice, Democracy and Good Government"), Hochman says she was "walloped by adolescence"-she was an awkward teen, not a "thin, pretty girl that all the boys liked, but clumsy and big instead." Sports, she says, "was the only place I could run to." Sports gave her self-esteem in a world that didn't seem to be offering any.

Today, Hochman, 30, runs PLAYCORE, a Nike program that provides college-age coaches for inner city teen-age boys' and girls' sports leagues.

According to Corpuz, who directs Nike's marketing campaign for the new Women's NBA, "Juliet's work is part of the bottom line, part of marketing the brand." To Hochman, though, the work is about something much more important.

"Yes, we have Nike Swooshes around at the events, and yes, it's important that they associate the event with Nike, but I can't tell you how lucky I feel to be working for this company," Hochman says. "I feel good using the Nike brand as a means to an end. And if the end is improving people's lives, I'm more than happy to do that."

Several former Nike staffers characterize this type of commitment by saying employees like Hochman "have drunk the Kool Aid."

"Yeah, that's true," says ex-staffer Horn, "but they give you good reason."

At Nike's lush headquarters in Beaverton and you won't see homages to sneaker design or jars of glue and needles in the trophy cases. There is no elaborate chart detailing Nike's stitching process. Instead, there are posters of hockey players and basketball legends like Wilt Chamberlain and Bill Russell (who retired long before Nike was making basketball shoes). There are oversized photos of tennis balls. There are basketballs, Wimbledon trophies, a Wilson tennis racket. Nike, it seems, celebrates products it doesn't even make.

That's because Nike doesn't consider itself a manufacturing company -- or even a shoe company. It's a sports company.

Nike didn't reach this conclusion until 1985, 13 years after it was founded. The decision, says corporate education director Farris, was "the most important moment in Nike's history."

In 1985, after lapping Adidas as America's top sports-shoe company, Nike was blindsided by a colorful aerobics shoe called Reebok. In response, founder and CEO Phil Knight to refashion Nike as a sports company, rather than a shoe company.

The decision had a number of consequences. First, it changed Nike's marketing approach. The company began dabbling in image rather than product advertising -- a strategy that led to the "Just Do It" mantra.

Second, it drew Nike into a larger range of products, including apparel.

Perhaps more important, the decision helped motivate employees like Cooper and Hochman in a way that working for a shoe manufacturer never could. Employees now were doing more than selling shoes. They were selling sports, an ideology based on the pursuit of excellence in which people's lives are improved through competition, fair play, fitness, and self-esteem. The new Nike wasn't simply about shoes and slam dunks, but about promoting a higher way of life.

Since 1985, Nike has reinforced the gospel of sports to its employees in a number of ways. The process begins during a worker's first week on campus, when, according to former Nike designer Peter Kallen, you "get ingrained and go through orientation."

All new employees view a video of sports highlights with a soundtrack about the soul of the athlete and the competitive spirit.

Nike also uses its stable of professional athletes to promote the doctrine among staff. Management sends out weekly e-mails to update employees on recent successes of Nike athletes. Nike also brings in its stars to speak to staff and host events on campus. Michael Jordan comes in to talk to the basketball shoe designers about how important their product is to the game. Bo Jackson talks to staff about the role of sports in his life. John McEnroe came to campus to face off in a tennis match against Knight. (The two men wore microphones and talked to the employees about Nike's mission as they batted the ball around.) More recently, Tiger Woods came and spoke about Nike's role in helping minority kids.

Then there's the Nike campus itself.

Microsoft, like Nike, calls its corporate headquarters a "campus." But where the staid Microsoft campus resembles a Christian college during finals week, Nike's campus looks more like U.T. on game day.

Red Swooshes float on computer screen savers, Swooshes are imprinted on notebooks and styrofoam coffee cups -- there is no place on campus to hide. Not the outdoor pool patio (the giant beach umbrellas are stamped with a Swoosh), not the company basketball gym (mid-court boasts a gigantic Swoosh), not even the men's bathroom, where Penny Hardaway and Alonzo Mourning posters smile at you from behind the ubiquitous logo. There seem to be Swooshes stitched into every piece of available fabric in sight: on collars, on socks, on shorts, on T-shirts-even on custodians' caps.

Beyond the cheerleading Swooshes that decorate the campus, however, Nike's headquarters is a literal shrine to sports.

Plaques of athletes from Moses Malone to John Stallworth to Mike Tully line the "Wall of Fame" breezeway, Sports Illustrated covers wallpaper the cafeteria, video screens beam in sports coverage all over campus, and buildings are named after sports heroes from Nolan Ryan to Joan Benoit Samuelson.

Nike headquarters is as much a sports complex as a work site.

In addition the tennis court, soccer field and running trails, there's the Bo Jackson Fitness Center, a three-story complex that houses a high-tech weight room, a basketball court, aerobics rooms and handball courts.

It's hardly surprising that having an athletic background helps a prospective Nike employee. The unspoken rule at Nike is that jocks count for more, says Kallen.

"I wouldn't say it's a prerequisite," he says, "but it sure helps during your interview. If they ask you what your hobbies are and you say movies, they're probably just gonna look at you and say [rather skeptically] -- `huh.'"

"You really can't believe in the product unless it's attached to your life," says former Nike designer Cathy Baily. "People believe in it because it's an athletic culture there." Baily says a majority of people at Nike take hour-and-a-half lunches to do their sports.

Tennis lessons, intramural teams, and contests are scheduled weekly and daily. On a recent afternoon, people were stretching out and prepping for the "Over the Wall" obstacle course. "Sign Up Now!" posters blared. "The Wall Is Coming -- the Swoosh challenge."

"People take it very seriously," says Horn. "I was on [a company] ultimate Frisbee team -- I thought just for fun -- and there was this one woman from the marketing department who used to push and shove and just bite my head off when I didn't take it super seriously."

The consummate athlete employee is founder Phil Knight, a decent middle-distance college runner. Known to outsiders as reclusive and shy, Knight is actually a strong presence on campus -- speaking at events, hanging out in the campus sports deli without his infamous shades and dashing off e-mails to the staff. Knight is known among staff as an eloquent and motivational speaker. Agostino says Knight "gives you chills when he speaks." Farris says Knight's speeches "bring you to your knees."

More than anyone, Knight -- a runner who started a company to serve runners -- commands the respect of Nike employees. It is Knight, not Michael Jordan or Tiger Woods, who can come down from the mountain and represent Nike's ethical and spiritual mission.

To the outside world, however, Nike is looking less and less ethical. The United Methodist Church, shareholders in the company, recently asked the Nike board of directors to address working conditions in Southeast Asia. Every newspaper in America, it seems, has run a story on Nike's overseas factories.

As if anyone needed more evidence that Nike is dangerously close to emerging as the new symbol of the corporate villain, Gary Trudeau, perhaps the most powerful satirist in the country, produced a series of Doonesbury cartoons lampooning the company's Vietnam factories.

The question is: How does this bad PR affect the true believers in Beaverton?

In a word, they're angry.

"They just don't report the whole story," Farris says. "We are being misrepresented."

"I get so angry I can't even talk about it," says designer Cooper. "It fires me up. It bothers me personally because I'm a part of Nike. When I go to meet anybody, and they see my face -- I'm Nike. And so if somebody bags on Nike or disrespects Nike, they're disrespecting me."

Every Nike staffer we spoke with said the accusations of harsh working conditions, low pay, and lack of independent monitoring in factories in Indonesia aren't true.

Indeed, the accusations have only strengthened the belief on campus that Nike is a force for good in the world.

Farris says Nike's factories in countries like Indonesia and Vietnam are an extension of the company's greater mission: creating opportunity for the underprivileged.

"I think we're doing a great job, quite frankly, to help evolve some of these cultures," he says. "Two dollars a day -- remember, we're talking about another culture that's just emerging. This is a good situation in that culture."

"We're paying fair wages under the economic rules," Farris continues. "I mean, America did the same thing. We had kids working in coal mines. It's an evolutionary process. These cultures are evolving."

Despite the belief on campus that the outside world just has it plain wrong, the accusations are taking their toll.

"I know this has had an impact on all of you at work and home," Knight wrote in an e-mail to staff on April 14th. "And it's not over yet. Nike will continue to be used as a target."

Judging from the mood on campus, however, Knight should hardly be worried that his staff is suffering from a lack of self-esteem. If Nike's effort to redefine itself from a simple athletic-shoe company to one with a more important calling has accomplished anything, it's that the employees in Beaverton seem immune to outside criticism.

"It's one thing when you're a cigarette company, and you know your shit stinks," says Corpuz. "But at Nike, we know the kind of great things we're doing."

Critics of the Swoosh certainly have their work cut out for them. Nike is that rare company whose corporate mission has been embraced by the public. Either that, or more people are swayed by watching Michael Jordan and the NBA playoffs than by reading Doonesbury and editorials in The New York Times.

"I really don't read the papers that much," says Liz MacDaniels, an executive assistant at a local engineering firm.

Standing outside her workout club in Southwest Portland, MacDaniels looks like she spent her last paycheck in NikeTown. From gym bag to sweats, from T-shirt to shoes, she is covered in Swoosh.

"The Swoosh stands for endurance," she says. "It stands for excellence." (Josh Feit is a writer for the Portland, Oregon newsweekly Willamette Week, where this story first appeared.)


Expanding in Memphis

Our biggest proprietary distributor is growing.

By Tanuja Supuriya

In one fell swoosh sneaker giant Nike, Inc. strengthened its presence in Memphis last month as the titan of athletic footwear announced plans for an $18.5 million expansion to its local apparel distribution center. Memphis is home to two of the three Nike distribution centers in the U.S.

Due to booming sales in Nike's apparel division and a shortage of storage area, the company is adding 766,000 square feet of warehouse and office space along with an employee communications center at its Shelby Drive facility.

"This is exactly the kind of thing Memphis needs," says John Gnuschke, director of the Bureau of Business and Economic Research at the University of Memphis. "Nike's success really is one of the unsung stories in the city."

Gnuschke and other economists and business leaders may be psyched, but those you would expect to be doing all the singing -- Nike's own public relations staff -- are oddly quite, even downplaying the Nike-Memphis expansion.

"The expansion is going to have a minimal impact on Memphis," says Willie Gregory, Nike's local director of public affairs. "We just ran out of space. It [the expansion] does not necessarily mean we are creating more jobs." Gregory at first didn't return numerous phone calls about this article, then said he didn't have time for an interview because of a trip to Portland. He refused to allow a Flyer photographer to take pictures at the Memphis facility because he couldn't be on hand to supervise.

Gnuschke says even if the Nike expansion does not include an increased workforce, Nike's growth is still very important to the city. "By expanding their facilities, Nike has shown it has made a strong commitment to Memphis," he says.

The Beaverton, Oregon-based company, which employs about 1,000 people locally, has run its footwear distribution center at Winchester and Hack's Cross since 1982 and its apparel hub on Shelby Drive since 1990. The expansion, which brings Nike's total physical presence in the city to 2.25 million square feet, makes it the largest proprietary distribution operation in town.

As part of the expansion, Nike has built a three-story facility that will house the company's new auto replenishment division, which operates under the guarantee that all shipments will be delivered within 72 hours after an order has been placed.

"It's a completely paperless system with state-of-the-art computers and conveyers," says operations manager Mark Lacey. Nike specially designed the work area to meet the needs of physically- and mentally-challenged employees, who make up about 10 percent of the division's workforce.

Memphis houses the United State's only Nike apparel distribution center. Every cap, shirt, even every pair of boxer shorts emblazed with the Nike Swoosh makes its way through the River City before reaching the rest of the country. According to Lacey, the Memphis hub moves anywhere from 350,000 to 500,000 units of clothes and accessories every day.

With apparel sales sky-rocketing over the past two years, those figures might continue to rise. During fiscal year 1997, Nike raked in $1.43 billion in apparel revenues alone while earning $3.77 billion in athletic shoe sales. And and that's just in the U.S. International revenues for both footwear and apparel rang in at $3.38 billion. That's a hell of a lot of Air-Jordans.


A Laid-Back Workplace

Perks, benefits, and plenty of free shoes keep Memphis Nike workers happy on the job.

By Tanuja Surpuriya

Can the Utopian workplace that Nike employees describe in Oregon be found at Nike-Memphis? Evidently.

"There's a big difference between Nike and other places," says Rubin Long, inbound manager for auto replenishment at the Memphis facility. "When you go to work in the morning, you're enthused. Nike is so laid back and that makes a difference."

One of the most obvious differences at Nike is the language it has adopted, trading typical business jargon for sports terminology. An employee is a player; a supervisor is a coach; a meeting is a huddle. Company headquarters are referred to as the World Campus.

"We don't just sit here in some sort of hierarchy where only the people at the top make all the decisions," says Mark Lacey, operations manager for auto replenishment. "Instead, we tried a new concept of actually letting the people who work directly with the products help make the decisions."

In keeping with its sports approach, Nike asks its players to work by two principals above all others.

"First there is honesty. You have to be true to yourself," Lacey says. "And second, there's competition. Compete with yourself, not your colleagues."

Nike perks also contribute to the esprit de corps. Among the benefits is a three-day work week -- an option allowing Nike workers the opportunity to work three consecutive 12-hour days instead of a normal 40-hour work week. Nike pays for the four additional hours to make a full week. The company also grants paternity leave and personal religious holidays without counting them towards the employee's personal leave allotment.

There's more. Nike doles out bonuses regularly, based on the company's success. And in case you haven't heard, Nike was successful to the tune of $9.2 billion in worldwide sales last year.

One more thing. Each quarter Nike employees walk away with four or five pairs of shoes. Air Jordans. Air Pennys. Absolutely free. While Rubin Long says the giveaways are actually merchandise that could not be sold because of minor defects, he admits that "defective" often means a fleck of dirt or other microscopic blemish on an otherwise perfect shoe which retails in many cases for more than $100.

The picture painted by U.S. Nike employees is certainly at odds with the other Nike "S" word, the ugly sister of the Swoosh -- sweatshops.

The company has come under intense fire over allegations of substandard working conditions and mistreatment of employees in Chinese, Vietnamese and Indonesian factories that manufacture the company's famous shoes.

Reports of physical abuse and workers earning less than their country's minimum wage have earned Nike criticism for exploiting foreign workers who are in no position to complain.

In its defense, the company claims to be a shoe designer and marketer that neither owns the factories nor controls the labor practices and customs of foreign countries.

But if a capitalist giant like Nike cannot muster the clout needed to change these working conditions, who can? And with the economic success Nike has enjoyed, can't it set aside the bottom line for one moment and take a stand against the factories that are mistreating employees?

Nike hired former U.N. Ambassador Andrew Young to tour the overseas facilities and evaluate labor practices. Young's report generally cited good working conditions in the factories he visited and suggested minor areas of improvement for Nike. The company says it is taking steps to ensure that Nike and its partners, follow the company's code of conduct: to "always do what is expected, as well as required, of a leader."

Back in Memphis, Nike is beginning to emerge as a corporate leader, with plans to improve opportunities for Memphis' inner-city youth.

"So far, Nike gives all appearances of being a good corporate citizen," says U of M economist John Gnuschke, who thinks Nike does an "above average" job of giving back to the community.

"Most corporations could do a lot more for the city, but don't because they are not called upon to do more," he says. "But I think Nike's philosophy about setting up and supporting programs for kids comes from a corporate level which they brought with them to Memphis."

In just the past two months, Nike has co-sponsored the High School All-Star Basketball Classic with the City of Memphis and awarded a $70,000 grant through its P.L.A.Y. (Participating in the Lives of America's Youth) Foundation to the Memphis Parks Commission to renovate and build softball and soccer fields in Robert Howse Park and the Lester Community Center in Binghamton.

Most recently, Nike donated $20,000 to the Mid-South Junior Golf Association. And if you were at the Tiger Woods Junior Golf Clinic at Pine Hill golf course a couple of weeks ago, where you couldn't help noticing that all the young participants were clad in blue Nike T-shirts and had the Swoosh prominently emblazoned on the fannies of their black shorts, all donated by Nike, of course.

"Nike is really a success story in Memphis," Gnuschke says, "and we need all the success stories we can find!"


The Origin of the Swoosh

So what's the secret to Nike's success?

The "S" word, of course.

"It's got be the Swoosh," says Mark Lacey a local Nike manager.

Even if you have been living under a rock for the past 25 years, Nike has probably branded your stone with its famous logo.

The Nike Swoosh is one of the world's most recognized corporate logos, instantly conveying "Nike" without using a single word. The origin of the Swoosh is almost as unbelievable as the marketing phenomenon it has become.

In 1971, when the company was called Blue Ribbon Sports, an employee dreamed of the winged Greek goddess of victory, Nike, who inspired courage in ancient warriors. Soon afterwards, the company introduced the Nike line of shoes. A few years later, the company changed its name to Nike.

The Swoosh itself was designed by Caroline Davidson, a student at Portland State University who was taking an accounting class taught by Nike CEO Phil Knight. After Knight asked her to design a logo that would fit on the side of a shoe, she turned in the Swoosh, which represents the wing of the goddess Nike. Knight got the symbol that would revolutionize the sporting goods business. Davidson got $35. -- T.S.


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