Thread regarding Nike Inc. layoffs

Interesting, because Nike already has a constant back stabbing, political culture. Everyone secretly conspiring against each other.

I certainly don't agree with stack ranking but how do you change a company that has that quality in their culture?

Agree that stack ranking never works long term. The companies you mentioned have proven it, and there are many more. You can say you don’t believe stack ranking and 20% annual cuts as a result will happen at Nike, but the CEO is on the record saying that this his approach. This was less than 2 years ago. He did not mention stack ranking, but there is not a way that I know of to “upgrade” 20% without stack ranking. He clearly stated he believes in firing 20% every year.

Stack ranking has never worked in any company. These types of MBA/consulting concepts sound intelligent in presentations but never work in real life. The companies that were the big supporters of stack ranking Intel, Microsoft, GE all turned into political dysfunctional organizations. They stopped using stack ranking. Just read the msft story about this published I believe in vanity fair.

One of the key reasons why stack ranking doesn’t work is due to human nature, we are all gamers, we game the systems. If you remember the survivor reality show, it is based on elimination. In the initial rounds, contestants tend to conspire and eliminate the strongest competitor - the person(s) with the best ability to win. This is the common problem, stack ranking isolates and eliminates the best people first.

Second, it created a constant back stabbing, political culture. Everyone secretly conspire against each other. How is that good for any company?

Ultimately, the employees who survive through years of stack ranking have become experts in managing the stack ranking system and surviving, not experts in their field or job. Constant survival requires invisible networks and loyalties, nothing to do with jobs. Mostly about self preservation.

After years of stack ranking, how can you still find bottom performances? Hard right? Some companies like Microsoft etc. overcame this issue by hiring new people every year to fire in the next round. What a waste of time and talent. This is all true.

Hope Nike is not planning to implement stack ranking, a system proven to be a failure and abandoned by large corporations as a key reason for their dysfunctional political cultures.

Ha ha. I was at HP during the Bain era. They managed to completely k–l a once relevant brand just so a conveyer belt of ghouls could make their millions and leave.

I don’t think the 20% cut will ever be implemented at Nike. That said, it’s vastly preferable because that’s what’s going to keep people motivated to improve, make positive change, etc.

Even after the current cuts end, we will still have literally hundreds of people who haven’t positively contributed in years.

Stack ranking is a finite, trackable method of review. It’s easy to look keep track of somebody’s rank over time. Our current system is spaghetti, with no real way to judge evolution of performance. It’s just words on a page. A page that nobody that actually matters is ever going to read.

When the bottom 20% is cut each year, the competitive spirit that is Nike’s lifeblood will come back. The culture will improve because we will know that the bad actors won’t be able to stick around, and we will return to the team of high performers that we like to think we are, but haven’t been for years.

You know just as well as I do, that many promising careers have stalled out because of the layer of 20+ year Nike veterans whose only job is to say no that never leave.

Is stack ranking preferred with a 20% cut every year? Can you explain?

Stack ranking is vastly preferable to bingo cage method we use today.

Remember this when you start stack ranking in a year

Donahoe was brought in specifically to be the figurehead in this reorg.

The reorg was not his idea, he’s just going to be the face of it. He will stick around for 2-3 years after it is done and then somebody from within Nike will take the reigns.

He’s playing “the bad guy” and he’s being compensated for it as such.

This has nothing to do with Bain conspiracies or anything else. The board pushed Parker out to get to this faster.

Better to have this “drag out” over only 5 months than to have a slow slog of rumors building up over 12-24 months like prior reorgs.

@BZF
Agree the company is bloated. I am not confident this will fix the problem as the same executive leadership is in place. Replacing 20% annually will destroy what culture is left.

Nike is the most bloated company i have ever worked at. Restructuring was necessary. Unfortunately some people will be hurt in the short term.

In case you don't know John's approach to talent, he openly feels you need to get rid of 20% of leaders every year. Let that sink in as you think about a future working environment.

OP here. Large companies always need retuning (or restructuring) but you need to have a strong, competent leader who is not just in it for himself or herself and has a long term focus. It is so easy to implement some cost cutting effort to make Wall Street happy, increase the stock price short term. This will benefit the CEO, CFO and other exec members the large position of whose compensation is stock based. The short term oriented cost cutting destroys long term prospects.

The other thing is when they do large corporate layoffs, these things drag on, taking the employee morale and productivity down. So whatever you gain from cutting salaries, you tend to lose due to low productivity, engagement and morale.

There are good transformational efforts. For example, Microsoft, until their current leader was a sh– show company with bad culture. By focusing on long term growth, optimism, the current ceo really did a tremendous enviable transformation at Microsoft.

Vs. look at intel. Intel did one more Bain involved restructuring in 2016, called ACT. Hey, you pay big bucks to these consulting firms to name your layoffs with acronyms. It completely destroyed Intel, wrong thing done at the wrong time. By the way, the cost savings were not great. Our current CEO (who was danohoe’s cfo at eBay. I am sure John helped him get his job at intel first as the cfo] also did multiple uneducated cost cutting. It is horrible. The company is suffering while the ceo made 100million in compensation. What a joke.

Hope Nike gets rid of this guy John and selects a better leader.

Nike needed a reorg. It needed simplification. Unfortunately, that usually means people lose their jobs. Nike was bloated and there were way too many cooks in the kitchen. I just wish they didn't draw this out over 5+ months.