CEO Culture Clash at Nike

A few years ago, I got to hear what was like the recruiter’s equivalent to Moses preaching on the mount. I was at a conference for executive recruiters in Manhattan, and one of the keynote speakers was Gerry Roche.

Now in his late 70’s and retired, Roche is one of the most distinguished professionals in the business, having placed many CEOs worldwide at top companies in multiple industries over the last several decades.

One of his most remarkable placements was of Google’s CEO Eric Schmidt in 2001. His firm was paid handsomely in stock, and in what is likely the most lucrative yet little publicized search deal of all time, he and his office made millions of dollars in 2004 when Google went public.

Roche appeared briefly at the conference to impart some pearls of wisdom to the audience of recruiters about how we can best do our job. There was one particular word he emphasized like one of the ten commandments, and I don’t think a soul in the room has forgotten it. The word: “culture.”

Roche brought up the soft side of recruiting, of paying attention to whether a potential executive’s leadership style is a good fit with an organization’s culture. He didn’t make it sound like he had a formula for it; he was just saying it was something you really need to pay attention to. To illustrate his point, he told a cautionary tale about when he recruited a new CEO for Nike in 2005.

Nike’s new CEO was stepping into the incredible shoes of Nike’s founder Phil Knight, pun intended — after all, this is the person who had trademarked the swoosh and brought Air Jordans to market. Roche described how Nike’s culture was driven by designers and how Knight fostered a creative, passionate, and collaborative environment. There was not much talk from Knight to his lieutenants about numbers, reports, and the bottom line.

The person who eventually got the CEO job was William Perez, who had spent his whole previous career with S.C. Johnson coming up through the ranks to become CEO.

As Roche told it, Perez sat down in his first meeting with the Nike staff, and all he talked about was numbers, reports, and the bottom line.

He didn’t fit in with there, and he was out 13 months later — and not without an $8m-plus severance package.

According to an in-depth story in Fortune magazine, Roche had spent years working on the search, trying to find someone who had experience managing multiple global brands and who was also an athlete. Perez made the cut because he had that experience and was a marathon runner, and he hit it off with Knight. Knight’s management style was very hands off, based on a knack for hiring the right people and motivating them to the best performance of their lives, inspiring them with the spirit of the great athletes and coaches.

Finding someone who has a proven skill set for an executive role is fundamental in executive search, but it means very little if the leader is unable to motivate or gain support from their team.  As Roche might say, when it comes to considering the cultural fit of a key executive hire with an organization, you need to “just do it,” early and often.

Rebecca Patt is Vice President with Wray Executive Search, specializing in restaurant and foodservice industry recruitment. She always vets candidates for cultural fit as part of a thorough 8-Step Search Process… and she will consider trading search for stock options! She can be reached at Rebecca.patt@wraysearch.com.

One Response to CEO Culture Clash at Nike
  1. Jim Matorin
    July 16, 2010 | 6:06 am

    Rebecca:

    As a business catalyst that has been afforded the opportunity to work with numerous companies over the years, large & small, I am amazed how many different types of cultures exist. The head of the fish is key, but another key factor Nike needed to take into account was geography – Oregon is a different part of America. Nike needed to take that into consideration as well.

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