Chief Strategy Officer, Issue 16 by Innovation Enterprise

The Top 4 Worst Character Traits For An Employee

Every office has its bad eggs. Michaela Jeffery-Morrison examines the character traits of employees who could be holding your company back. | 13

If Content Is King, Is Brand Queen?

We examine the relationship between the two and which should take priority | 22

Writing For The Millennials The Millennials are one of the most demanding demographics. Max Bowen tells us the best ways to create content that resonates with them | 24

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EDITOR’S LETTER Welcome to the 16th edition of Chief Strategy Officer. We’re now more than half way through 2015. It’s a time when companies take stock of how their strategies have affected their second quarter results. In line with this, we look at how Nike has been using growth strategies to improve its recent results. Company strategies live and die by the people who execute them. While there aren’t many offices that can truly say that they haven’t employed a few bad eggs, Michaela Jeffery Morrison takes a look at the negative traits companies should be avoiding. We also take a look at Reddit, one of the world’s most visited websites with 169 unique monthly visitors. The site has built up a loyal fan base who are keen to protect its meritocracy. Ellen Pao - who was recently dismissed as the company’s CEO - has caused some unrest, however, and we ask whether her strategies could have affected the social network’s longterm future.

report earlier this year which states that the global unemployment rate is going to increase over the next five years. Yet some cities still offer opportunities. In this month’s magazine we take a look at three cities which continue to have thriving job markets despite the problems experienced by the cities around them. In addition to this, we also look at how companies can write engaging content for the Millennials and also the relationship between an organization’s content and brand. We hope you enjoy the magazine, it has been created to help spread new ideas within strategy, so if you have any feedback please get in touch with me at sbarton@theiegroup.com. Also, if you like the magazine, please share it. Simon Barton Managing Editor

The United Nations’ International Labour Organization released a

Managing Editor: Simon Barton

Art Director: Oliver Godwin-Brown

Assistant Editor: James Ovenden

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Contributors: Simon Bailey Michaela Jeffery-Morrison Max Bowen Harriet Connolly

CONTENTS P5 P24

WRITING FOR THE MILLENNIALS The Millennials are one of the most demanding demographics. Max Bowen tells us the best ways to create content which resonates with them

CAN COMPANIES TRY TOO HARD TO STAY ONE STEP AHEAD? Many companies pride themselves on taking projects on which don’t necessarily come within their core processes. We ask whether this strategy can lead to problems

P16

P13

Be Will There ath Of An Afterm don”? “Mobileged

THE BEST CITIES TO FIND WORK

THE TOP 4 WORST CHARACTER TRAITS FOR AN EMPLOYEE

WILL THERE BE AN AFTERMATH OF “MOBILEGEDDON”?

Global unemployment rates are on the up

Every office has its bad eggs. Michaela

After the ‘Mobilegeddon’, Simon Bailey,

- but some cities still offer prosperity to

Jeffery-Morrison examines the character

CEO, Axonix, explains what ‘mobile-first’

their inhabitants. We take a look at three

traits of employees who could be holding

really means for companies

of the best destinations for recruitment

your company back

P22

P19

P26

REDDIT’S MINI CRISIS

IF CONTENT IS KING, IS BRAND QUEEN?

HOW NIKE HAVE COMBINED GROWTH AND GREEN

Are Reddit’s days numbered? We see

Although both are important, we examine

We look at Nike’s progression since 2010

whether recent developments in the

the relationship between the two and

and what they’ve done to promote green

social network’s senior leadership team

which should take priority

and growth strategies

could affect its future

Can Companies Try Too Hard To Stay One Step Ahead? MICHAELA JEFFERY-MORRISON | HEAD OF STRATEGY

Being first-to-market allows a company to become synonymous with a product - with Scotch tape and Kleenex two good examples and it also exudes originality.

Amazon and Google share a number of common characteristics. None more so than their approach to innovation and diversification strategies. Our perception of their strategic approach is that it pays to take risks. Being first-to-market allows a company to become synonymous with a product with Scotch tape and Kleenex two good examples - and it also exudes originality.

While senior management teams at these companies shouldn’t bemoan new ideas, they must be able to select the right one straightaway, as there’s little room for projects which don’t take off.

CAN COMPANIES TRY TOO HARD TO STAY ONE STEP AHEAD?

But has it gone too far? Instead of seeing a company’s achievements in a positive light, many have claimed that all they do is show a company how not to plan for the future. Success breeds success, but every iteration of it, according to some, has to be done differently. If not, a company appears sluggish and unresponsive to change. There have been many examples of companies trying too hard to break into new industries when it’s not been viable. Last year’s biggest smartphone flop - Amazon’s Fire Phone - demonstrated that even the most successful companies can’t just jump into a competitive industry and expect success. Jeff Bezos described it as a ‘bold move’ and after the phone’s flop ‘something which is going to take many iterations’ and ‘some number of years’ to get right. Undeterred by the fact that the Fire phone has been selling for 99 cents in the US - down from $199 - Amazon will continue to invest in the venture as

they look to make a smartphone which can rival Apple and Samsung’s products. Despite Jeff Bezos’ commitment to the cause, the Fire phone has been an embarrassment. But throughout Amazon’s existence it’s made leaps, not steps. They have, after all, had much success with ‘Amazon Instant Video’, a project which most would have considered well outside of their core online retail business. Had that failed, it would have been used in this article as an example of where a company had put too much emphasis on diversification. Yet it didn’t, highlighting in the process how employing a strategy of diversification can work. It’s no coincidence that companies like Amazon and Google have had their fair share of failed ventures - they can put

CAN COMPANIES TRY TOO HARD TO STAY ONE STEP AHEAD?

Last year’s biggest smartphone flop - Amazon’s Fire Phone - demonstrated that even the most successful companies can’t just jump into a competitive industry and expect success. many more of their ideas into practice than most. Google’s list of failures, for example, reads a mile long. An article in the Telegraph, for example, discusses 18 of them, but again, it shows that trying too hard can waste resources and capital. But like Amazon, Google can afford to try too hard. They have the resources to write such projects off as stepping stones. The same, however, cannot be said for smaller companies which operate on a much stricter budget. While senior management teams at these companies shouldn’t bemoan new ideas, they must be able to select the right one straightaway, as there’s little room for projects which don’t take off. Clearly,

most companies don’t have the ability to just decide one day that they’re going to enter the smartphone market like Amazon, but nevertheless, risks, however great, must be analyzed so that the chance of failure is as low as possible. For smaller companies, then, it’s a question of finding the right balance. Ultimately, the companies that make it big need to take some risks, but as mentioned before, too much can be disastrous. Staying one step ahead can never be a bad thing. However, companies must innovate within their means, especially if they don’t have the capacity to bounce back like Amazon or Google.

The Best Cities To Find Work

Simon Barton Managing Editor

Songquan Deng / Shutterstock.com

THE BEST CITIES TO FIND WORK

The United Nations’ International Labour Organization released a report in January which paints a pretty hopeless picture for global employment levels. Part caused by the global economy’s failure to fully recover from the financial crisis, and partly down to the ever increasing amount of job seekers flooding the market - there are 1 million more job seekers around the globe now than there were a year ago - the market’s soon to hit a period where it’s going to be unable to supply 212 million qualified workers with employment. The 15-24 age group has been

affected by the crisis more than most. The global youth unemployment rate stands at 13%, a figure which is only expected to increase as the job market becomes more fragile. Yet it isn’t all doom and gloom. There are small pockets which continue to promise its inhabitants prosperity. With reference to the Cities of Opportunity report, this article looks at three cities, in no particular order, which have thriving job sectors.

The youth global unemployment rate stands at 13%, a figure which is only expected to increase as the job market becomes more fragile.

NEW YORK The world’s cultural hub isn’t a bad bet for employment either. It topped the 2012 edition of the Cities of Opportunity report and came second in this year’s edition. Whilst its startup scene isn’t comparable to London’s - the UK’s capital has been called the new Silicon Valley - New York is still one of the United States’ technology and

innovation hubs, and was ranked as the fifth biggest startup ecosystem in the world. It is particularly impressive when it comes to intellectual capital, innovation and technology readiness, making New York’s job market consistently excellent, yet not a world-leader in any one given category.

General Motors, for example, recently shifted its non-Chinese operations to Singapore from Shanghai - creating many new job opportunities in the process.

It’s also one of the most multicultural cities in the world and is known for welcoming immigrants into its community with open arms.

THE BEST CITIES TO FIND WORK

LONDON The UK’s capital topped the 2015 Cities of Opportunity report and was a hair’s breadth away from toppling New York in 2012 as well.

a byproduct of the city’s thriving startup scene - and is a consistent high scorer across all the report’s categories.

All roads seem to lead to London. The city was by far and away the highest scorer when it came to ‘city gateway’, outlining its ease of access. It also leads the way in terms of technology readiness -

The job market in London is so strong that it’s been accused of causing the rest of the nation’s cities to fall into depression. The capital now has 10 times more jobs than its nearest UK rival and accounted for

80% of private sector employment growth in 2010. Due to EU regulations - which remove the need for EU residents to apply for work visas - the city has a reputation for attracting the continent’s most talented workers. This, coupled with its strong tech sector, makes it one of the best places in the world to find work.

Due to EU regulations - which remove the need for EU residents to apply for work visas - the city has a reputation for attracting the continent’s most talented workers.

SINGAPORE We called Singapore ‘Asia’s innovation hub’ earlier this year, and recent developments have done little to change our mind. Known for its positive worklife balance, the region’s got an incredibly strong infrastructure and transportation system. This is the platform for its strong performance on the the Cities of Opportunity

report and the opportunities it offers.

from Shanghai - creating many new job opportunities in the process.

With a number of prestigious universities situated there, major companies have started to move their operations over to the region in order to take advantage of its graduates. General Motors, for example, recently shifted its nonChinese operations to Singapore

Singapore is Asia’s strongest job market and will surely be a hub for economic activity and job opportunities for a sustained period of time.

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THE TOP 4 WORST CHARACTER TRAITS FOR AN EMPLOYEE MICHAELA JEFFERY-MORRISON HEAD OF STRATEGY

They score the goals, make the touchdowns and hit the homeruns, but their success shouldn’t be defined individually, but collectively.

While the TV show The Simpsons portrays a fictional world where its power-hungry Nuclear Power Plant boss can fire people whenever he wants, the reality is that today’s workforce is protected by stringent employment laws. This has given people more security at work and stopped those who would like to act like Montgomery Burns from firing people just because they’ve got out of the wrong side of the bed that morning. However, this puts pressure on HR managers to hire the right people. If they make a mistake, they could subject their colleagues to years of low productivity. In this list we look at four character traits that companies should try and avoid.

THE TOP 4 WORST CHARACTER TRAITS FOR AN EMPLOYEE

PEOPLE WHO ARE UNWILLING TO ‘MUCK IN’ This type of employee can hide in larger companies, but not in startups. Fixing a printer won’t be in many people’s job description, but it’s still a task that somebody will have to do. If somebody is unwilling to take on these extra roles the entire team’s capacity to operate as a unit will be challenged. This goes against the ethos of the most successful startup companies, and is likely to resign a startup to the 90% which fail year-on-year.

COASTERS So you’ve had a good year - why not take the next a little easier? Employees who rest on their laurels after a sustained period of success can quickly go from being important members of your company, to deadwood. Everybody should understand that their workload, especially at a young company, is refreshed every day. The other problem is that coasting is contagious. As soon as someone starts seeing a colleague getting away with not working hard, there’s a good chance they will follow suit. For management it’s important to sit these people down and continually reassess their targets.

Everybody should understand that their workload, especially at a young company, is refreshed every day.

GLORY GRABBERS Everyone likes glory. The world’s best paid sportsmen bask in glory. They score the goals, make the touchdowns and hit the home-runs, but their success shouldn’t be defined individually, but collectively. It can be difficult for companies to praise their staff in the mainstream media. When Amazon does well, the praise goes to Jeff Bezos, when Google does well Larry Page gets the headlines. This is all well and good externally, but internally, glory-grabbers can be a real problem. They demotivate the people who have helped them achieve a certain goal, and ostracize themselves from the team at the same time. Their arrogance might also mean that the next time a goal’s set, the supporting cast might be less inclined to help out.

GOSSIPERS ‘The Water Cooler Effect’ is a book written by eminent psychologist Nicholas DiFonzo, about how rumours spread throughout organizations. Getting rid of gossiping isn’t possible. You put 50 people together in an office and you can guarantee that within a couple of days, they’ll be talking about one another behind their backs. Companies should be wary of people who gossip too much though. Employees who gossip whilst working are less productive and cause those around them to waste time as well. It can also create a culture of back-stabbing where people aren’t sure who they can trust. This causes unrest and is likely to increase staff turnover.

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Will There Be An Aftermath Of “Mobilegeddon”?

Simon Bailey, CEO, Axonix

WILL THERE BE AN AFTERMATH OF “MOBILEGEDDON”?

Google’s recent mobile algorithm and AdWords announcements in April reiterated what many of us in the industry have been saying for a while – mobile is here and it’s here to stay. The company’s latest algorithm update, coined “mobilegeddon”, means that mobile-oriented sites are now prioritized in their search results. Forty percent of people now Meanwhile, consider their phone to be their it also intromost important information resource, duced a raft of updates to and Google is acknowledging that a its AdWords vast number of its users will be coming service, which it says will to websites on their phones improve users’ mobile experiences by making its ads more interactive by basing them on swiping navigation rather than clicks. Clearly, mobile can no longer be an after thought. Forty percent of people now consider their phone to be their most important information resource, and Google is acknowledging that a vast number of its users will be coming to websites on their phones and will be rewarding the sites that serve a mobile option from the outset. What will consumers being driven more to mobileoriented sites, mean for mobile marketing budgets? The challenge of ‘how to crack the mobile advertising strategy’ has established itself as a perennial thorn in marketers’ sides,

and the move to prioritize mobile websites by Google is a step towards increasing the pressure on brands to optimize their mobile ad strategy. But will they do it properly? Many advertisers think they can just apply desktop campaigns to those they are running on mobile. That’s not the case for a couple of reasons. Firstly, while cookies are core to desktop advertising, they don’t work with apps. Since 80% of mobile ad impressions are inside of apps, and most mobile traffic runs through them, any technology that’s reliant upon cookies is largely useless for mobile ads. Secondly, advertisers need to ensure they work with publishers to ensure their messages are provided in ad formats which suit mobile. This means avoiding publishers who favour banner ads, for instance, as more often than not; they are too small for an engaging ad message. Thirdly, brands need to alter their adverts’ content for mobile to reflect that the devices are portable, and hence are used in a variety of contrasting situations and locations to desktop, which is predominantly used for pre-determined tasks which users are trying to complete without disruption. With all of this in mind, it’s clear that advertisers need to adopt a “mobile for mobile” approach, which uses specialist technologies to truly target the mobile

WILL THERE BE AN AFTERMATH OF “MOBILEGEDDON”?

audience, which now plays a pivotal role in user experience. These technologies deliver better targeting, so ads become more relevant to the user, increasing the value for both consumers and advertisers, and delivering a higher price for the publisher. They also help to provide a more authentic and transparent approach, in which brands are able to track where their adverts appear, guaranteeing them their preferred audience and environment. So don’t rest on your laurels. The market is constantly changing, it’s absolutely vital that marketers remain prescient in their approach to advertising given that that consumers’ use of mo-

bile devices will inevitably continue to grow. As the launch of the Apple Watch earlier this year has shown, this brings with it more and more formats for advertising on mobile devices, which will only become more widespread in future.

Many advertisers think they can just apply desktop campaigns to those they are running on mobile. That’s not the case for a couple of reasons.

Therefore brands who assume their desktop technology partners can handle mobile are just going to fall behind, because they will miss out on an extremely valuable opportunity to get their mobile marketing campaigns up to scratch and improve their mobile advertising effectiveness. Given that mobile will account for over 50% of all digital ad expenditure in the UK for the first time in 2016, and will also exceed $100 billion that year, this trend towards mobile is only going to accelerate.

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REDDIT’S Mini Crisis Simon Barton | Managing Editor

Reddit’s a meritocracy, rewarding users who continually share interesting content. Without Reddit, content which would have previously been hidden, would stay hidden.

Known as ‘the front page of the Internet’, Reddit’s interface looks like it was thrown together in a couple of hours.

- coupled with the controversial links its users post, has meant that it’s got a reputation as being the Internet’s Wild West.

That is, however, the look its creators were going for. The site’s association with Anonymous - the notorious hacker-group which has been known to reveal the identities of former Ku Klux Klan members

In an article in the Washington Post, Caitlin Dewy examined what would happen if Reddit went offline tomorrow. It turns out that powerhouses, such as Amazon and YouTube, would feel a considerable hit, with the

biggest losers most likely to be porn sites. They wouldn’t be the biggest losers. Reddit’s a meritocracy, rewarding users who continually share interesting content. Without Reddit, content which would have previously been hidden, would stay hidden. Reddit supports news websites and blogs and gives people more chance to get their work read. Yet the site’s going through a period of turmoil at the moment. Ellen Pao - who had been the CEO of Reddit from 2013 until her resignation on July 10 2015 Was at the center of a number of incidents. In an announcement on the site in July, Reddit claimed that it had ‘screwed up’. Whilst there was no reference to Pao in the post, it’s likely that it was in response to the company’s dismissal of Victoria Taylor, who according to the Independent, was part of the site’s ‘behind the scenes team’. She played an essential role in Reddit’s ‘Ask Me Anything’ community, and had an important part to play in developing a number of Subreddits. Cries of revolt were being heard earlier this June, with a petition to remove Pao as CEO reaching 163,108 signatures. All happening within the space of four days, it goes to show how vulnerable companies can be when their CEO’s actions don’t reflect what its users want. In fairness to Pao, much of the hate

REDDIT’S MINI CRISIS

targeted at her might be a result of her shutting down a number of popular Subreddits - including ‘Fat People Hate’ - which she felt was inappropriate. Reddit’s users felt that Pao was cutting off their ability to converse freely under the guise of cracking down on harassment. Cleansing content doesn’t sit well with Reddit’s users and this, as well as the firing of Taylor, is likely to be the main reason why Pao’s reign came to an end.

Cleansing content doesn’t sit well with Reddit’s users and this, as well as the firing of Taylor, is likely to be the main reason why Pao’s reign is likely to be coming to an end soon. Ellen Pao was replaced by Steve Huffman - the network’s founder - who returns for his second stint as Reddit’s CEO. Yet despite the company’s attempt to reduce the media scrutiny around Pao’s departure, it’s common knowledge that Reddit’s users were abusive to her online. Certain news outlets, including The Guardian, shared their disgust at the way Pao was treated, calling Reddit ‘the closest

thing the internet has to a frat house’ - highlighting the fact that she had been compared to Hitler and had to endure jokes about her sex and ethnicity on a regular basis. This made the British newspaper ask whether Reddit could ever be run by a woman. It would, however, be a sad day for the internet if Reddit were to go under. Reddit functions best when it’s left to its own devices and Pao’s attempt to moderate the site goes against the very core of why Reddit has been so successful. The way Pao was treated, however, was unacceptable and shows that Reddit’s users are more than willing to be egregious if something doesn’t go their way. Whilst its closure seems unlikely, firing Taylor, one of its most well-liked employees, shows that under Pao there was a degree of misdirection at the top of the company’s structure and perhaps a lack of understanding of audience requirements. Pao wanted to expand the site’s reach - which at the moment is primarily young American men and was punished for it. It goes to show how volatile a company’s consumers can be if you go against their wishes and the lengths they can be willing to go to in order get what they want.

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IF CONTENT IS KING, IS BRAND QUEEN? Harriet Connolly, Director, Global Operations

people have an affinity with Apple and they are willing to spend the money to keep the association going.

IF CONTENT IS KING, IS BRAND QUEEN?

In 1996, Bill Gates wrote an essay titled ‘Content Is King’. In the piece, he outlined how he felt that content would be the driving force behind the internet, and its biggest money-maker too.

Content is King’ was arguably 2014’s most overused phrase - with marketers from an array of different companies redefining their strategies so that their content is ranked as highly as possible on Google’s search index.

Fast-forward 19 years and it seems that Gates’ prediction has come true. In fact, the saying ‘Content is King’ was arguably 2014’s most overused phrase with marketers from an array of different companies redefining their strategies so that their content is ranked as highly as possible on Google’s search index.

its nearest competitor, by almost double. This has allowed Apple to put a premium on their products - with the highest-spec MacBook Pro coming in at well over $2500 dollars. Logically, one would assume that this price was a reflection of the product’s quality, but the reality is that Apple’s brand is such that quality may not be so important (although they are currently producing some of the best products in the world) people have an affinity with Apple and they are willing to spend the money to keep that association going.

What Gates didn’t mention in his essay was the importance of the brand. Yet his creativity allowed Microsoft to become one of the world’s most recognizable brands, with Gates himself amassing a fortune of nearly $80 billion. Ironically however, it would be Microsoft’s rival, Apple, which would take the concept of the brand a stage further.

In his paper ‘Great Content Is Not Enough’, Ryan Skinner, states that good brands can actually cut their content production and be more successful if they concentrate on distribution Apple, whose brand is worth $124.2 billion according to Forbes, out-values Microsoft,

This has led some to proclaim that a company’s brand is its ‘queen’. When we talk about a ‘brand’ in this context, it’s more about the power an organization has to distribute its content effectively. For example, a small startup might look at the mantra ‘Content is King’ and feel pressured to sit down and write 40 articles. This is all well and good, but it doesn’t prioritize distribution methods - it treats them as an afterthought, which will mean that regardless of how good the content is, it won’t be viewed by enough people. This is why the brand is essential. It gives companies the platform they need to put their content in front of the right peo-

ple. In his paper ‘Great Content Is Not Enough’, Ryan Skinner, states that good brands can actually cut their content production and be more successful if they concentrate on distribution - He also reiterates the importance of the feedback loop, which will only gather pace when content’s being viewed by more people. This begs the question as to which one is actually ‘king’. Content is king. It is, as mentioned by Gates, the driving force behind the internet, yet without the queen, the brand, it doesn’t have the necessary impetus to succeed. Both are essential, but the companies with the best brands will continue to find that their content has the best chance to succeed in today’s competitive marketplace.

G FOR THE N I T I R W MILLENNIALS Max Bowen Event Director, Chief Strategy Of ficer Summit, Sydney

WHEN ATTEMPTING TO WRITE CONTENT THAT RESONATES WITH MILLENNIALS, THE MOST IMPORTANT THING IS TO SPEAK IN THEIR LANGUAGE

WRITING FOR THE MILLENNIALS

Gone are the days when a Sunday afternoon would be spent just reading the newspaper - a single source of information which was responsible for delivering all that’s important in the world in 50 pages. Although many predicted the demise of the newspaper, sales, whilst not as strong as they once were, remain in the seven-million bracket in the UK. There has been a 7.5% decline in the last 12 months, but it’s clear that the newspaper industry is not dead, it’s just not as popular as it was in its heyday. As a society, however, we have become used to having information on-demand, and in huge chunks. We’ve almost subconsciously developed a filter, where we just know when a link or article is not going to be to our taste. Due to this, the style that content is written has to be aligned to fit the requirements of your target audience. When you talk about designing content for the next generation, it’s not just a case of written articles, but the construction of brands too. Millennials, the name given to people born between the early 1980s and the early 2000s, is a group which many companies are targeting. Although each generation has its own expectations and quirks, Millennials were raised in a time far removed from those before them.

Not only were they raised in arguably the most child-centric era of all time, they were also exposed to the internet from a relatively young-age. Therefore, they’re the first generation that’s comfortable using the internet for the majority of their everyday tasks. When attempting to write content that resonates with Millennials, the most important thing to do is to speak in their language. This isn’t as easy as it sounds - the Millennials are much more savvy than their parents were, with many understanding the concept of marketing in detail. THERE HAS BEEN A 7.5% DECLINE IN THE LAST 12 MONTHS, BUT IT’S CLEAR THAT THE NEWSPAPER INDUSTRY IS NOT IN A DEMISE, IT’S JUST NOT AS POPULAR AS IT WAS IN ITS HEYDAY. There are many examples of companies who have built up a rapport with the Millennials. Nike, for example, has tapped into the millennials belief that exercise as well as diet, is the key to maintaining a healthy lifestyle. This has allowed them to cater their brand image to the millennials, and produce content that’s tuned to what they want to see. You also can’t underestimate the importance of communication.

Social Media has brought with it numerous channels for communication, which a decade ago weren’t imaginable. Engaging the millennials will revolve a lot around responsiveness and making sure that everybody’s queries are met with a personalized response. Entertaining and engaging the millennials is a difficult task. They’re savvy, and not easily duped into buying products they don’t have any use for. Find out what the millennials want, design your message around that and make sure you’re constantly on-hand when they’re enquiring about something - that’s the best way to engage them. However, one element that needs to be clear when writing for this audience is that they are not all the same. One rule might work for one person and another may not, the most important element to remember is that they are motivated to research, if claims are made then they need to be backed up with facts. This generation is the most educated in history, trying to fool them with fluff will not work and companies who ignore this golden rule do so at their peril.

HOW NIKE HAVE COMBINED GROWTH AND GREEN SIMON BARTON MANAGING EDITOR

Its journey in China shows that Nike also has the ability to be patient and ride out negativity until the market moves in their favor.

As the world tuned in for 2010 FIFA World Cup in South Africa, Nike was readying itself for a five-year growth strategy where it would attempt to achieve longterm, sustainable growth across its entire portfolio. Nike has long been the world’s dominant sports company. Its brand alone is worth around $15 billion, three times that of Adidas, and ten times that of Reebook. It also sponsors many top athletes with LeBron James, Roger Federer, Rafael Nadal, Rory Mcllroy and Cristiano Ronaldo perhaps the most prominent - yet despite this, it still regards itself as a ‘growth company’. The FIFA World Cup is arguably Nike’s busiest period. In 2006, it was criticized for its digital strategy, with the Harvard Business Review stating that its Joga Bonito campaign ‘did not capitalize on the deeper and less obvious changes in consumer expectations’. To add insult to injury, a team sponsored by Nike hasn’t won the tournament since 2002, with its nearest rival Adidas, backing two of the last three winners. The timing of Nike’s investor meeting in 2010 may have been coincidental. But their relative lack of success in the tournament could have been the wake up call its strategic team needed. The brand can always rely on strong sales in the United States, but in emerging countries, which are greatly influenced by the FIFA World Cup, Nike’s prominence was nowhere near as strong.

TonyV3112 / Shutterstock.com

NIKE’S GROWTH STRATEGY: FROM 2010 TO 2011

At the beginning of 2014, Nike was struggling to make much of an impact in Greater China. Two years earlier, in 2012, Nike predicted that its revenue would double in China to $4 billion in four years. This prediction proved to be widely optimistic, with the company failing to negotiate the necessary cultural barriers. For example, Forbes stated that Nike’s reliance on using iconic sports stars Nike’s reliance on using iconic to promote sports stars to promote its its products products - whilst successful in Europe - whilst and the United States - didn’t work successful in because of Chinese parents focus on Europe and the United academia and not sports States - didn’t work because of Chinese parents focus on academia and not sports. Nike’s presence in China, however, has been a slow burner. Recently, the company announced that its revenues had increased 15% year on year, the highest they’ve ever been. Caused by a culmination of the Chinese population’s increasing disposable income, the appeal of Western culture with the nation’s youth and a steady rise in gym memberships, the brand is in the best shape it’s ever been in that part of the world. In other emerging economies - such as Brazil and Mexico - Nike has seen its revenues grow by 25%. This is expected to increase even further, with the Rio De Janeiro Olympics set to be a platform for further growth. Amid this success, Nike has also been championing sustainability. As a key part of its targets in 2010,

Nike wanted to drive its longterm growth by promoting green strategies and manufacturing processes. Nike’s made real strides in this area too. Its Flyknit Lunar 1+ running shoe, for example, reduces manufacturing waste by 80% compared with traditional production methods. They’ve also been working hard to improve the working conditions of their factory workers in some of the world’s most deprived nations, setting up the Nike Foundation, which looks to provide children who are living in extreme poverty with the resources to go to school. This strategy has reshaped Nike’s image after its famous sweatshop scandal in 1997. Nike’s growth stance is commendable and should see them continue to diversify their portfolio and move into new markets. Its journey in China shows that Nike also has the ability to be patient and ride out negativity until the market moves in their favor. The United States and Western Europe will continue to be Nike’s main hunting grounds. Their aggressive growth strategies, however, has seen its global presence increase and is perhaps the main reason why its revenues were up by 7% this quarter. This highlights the success that Nike has experienced over the last five years and that despite its FIFA World Cup woes, it’s still the world’s leading sports brand.

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