Phil Knight, co-founder and former CEO of Nike, shared insights into the company’s remarkable journey and enduring culture of innovation in a 2017 conversation with Harvard Business Review senior editor Dan McGinn. Knight recounted how Nike’s origin story, deeply rooted in his partnership with his former track coach Bill Bowerman and sparked by an entrepreneurship class at Stanford, shaped the company’s approach to innovation, leadership, and succession planning.
Knight’s fascination with running shoes began during his college years when Bowerman, a renowned track coach, started experimenting with shoe designs to improve performance. Bowerman believed that the right shoe could significantly impact a runner’s outcomes, famously saying that an ounce of weight saved in a shoe could feel like carrying a thousand pounds in the last stretch of a race. This obsession led Bowerman to create unconventional shoes, including a pair made from goat skin with a thin sole plate so light that the spikes could be felt through it. Despite their odd appearance, these shoes performed well enough to convince Knight of their potential.
The seed for Nike was planted when Knight wrote a business paper at Stanford proposing that running shoes should be manufactured in Japan rather than Germany, as Japan offered more economical and higher-quality stitching. This idea led Knight to travel to Japan, where he initiated contact with Onitsuka Company (now ASICS) and began importing their Tiger brand shoes to the U.S. Crucially, Knight shared these shoes with Bowerman, seeking his approval not just as an endorsement but as a validation of quality from one of the world’s best distance coaches. This collaboration quickly evolved into a partnership, with Bowerman joining Knight to innovate shoe designs.
One of Bowerman’s most notable contributions was transforming a high-jump shoe’s cushioning technology into a revolutionary running shoe called the Cortez. This design introduced a layer of cushioning between the sole and upper parts of the shoe, a breakthrough that changed running shoes fundamentally and remains influential today. Another iconic innovation came years later when Bowerman, inspired by his wife’s waffle iron, developed a new outsole pattern that improved traction and performance, giving birth to the signature waffle sole that became synonymous with Nike running shoes.
Despite these creative breakthroughs, Nike’s early years were fraught with financial challenges, including complex negotiations and legal disputes with Japanese suppliers like Onitsuka. Bowerman was not involved in the day-to-day business struggles but remained a vital source of support and a key witness in lawsuits. His role was largely focused on innovation, allowing Knight to handle operational matters.
As Nike grew, it attracted talent that shared a passion for running, including Mark Parker, who joined in the mid-1970s. Parker, a collegiate runner himself, embodied the company’s culture where employees were either current or former runners, deeply committed to making better shoes. Knight emphasized that this passion for the product was critical to Nike’s success and differed from companies where general business skills alone suffice. He believed that understanding and loving the product—and the consumer—was essential, a perspective that made Parker’s background particularly valuable.
Initially seen primarily as a designer, Parker quickly demonstrated broader capabilities, thinking beyond shoe design to marketing and general management. Rather than formal training, Nike’s approach was to immerse employees in real-world problems, pushing them to learn on the job through challenging assignments. This hands-on, crisis-driven training helped Parker develop into a well-rounded leader, prepared to take on larger responsibilities.
Bowerman remained involved with Nike until shortly before his death in 1999, occasionally participating in company events and maintaining his characteristic critical eye. True to his nature, Bowerman often remarked that Nike’s shoes were “the worst shoes in the world except for everybody else’s,” reflecting his relentless drive for improvement.
Knight himself began seriously considering succession planning around age 65, recognizing that his energy was waning and that Nike needed a more active CEO. His first attempt to bring in an outsider, Bill Perez from Wrigley, did not work out due to cultural mismatches. Nike’s unique, collaborative, and team-oriented culture was difficult for Perez to adapt to, especially given his preference for strict organizational boundaries. This experience reinforced the belief that Nike’s next leaders should come from within the company, well-versed in its culture and values.
Following Perez’s departure, Knight recommended Mark Parker as CEO. Their working relationship was marked by mutual respect and a shared understanding, allowing Knight to step back without frequent oversight. Knight noted that it was not unusual for them to go extended periods without