Phil Knight - Shoe Dog

Nike is an iconic brand that was ubiquitous in my childhood sporting dreams.  The champion athletes it sponsored and the coveted equipment they wore dominated my imagination.  Nike’s growth coincided with a number of interlinked, supportive trends.  First, the increasing popularity of sports with second, the increasing commerciality of sports, much of which was made possible by a third factor - improvements in communications allowing star teams and athletes to reach a global audience, which brought more and more sponsorship money into sport.  A fourth factor, the huge increase in sportswear worn casually for non-sporting activities, arose simultaneously and is perhaps best exemplified by the ubiquity of Nike trainers!  It’s probable that Phil Knight was, to a greater or lesser extent, betting on these trends when he founded Nike.  However, I found Knight’s key insight was the transcendent power of sport for an ever expanding crowd of spectators.  Writing about Steve Prefontaine, a superstar distance runner and early Nike sponsored athlete, he observes:

‘I’d never witnessed anything quite like that race. And yet I didn’t just witness it.  I took part in it.  Days later I felt sore in my hams and quads.  This, I decided, this is what sports are, what they can do.  Like books, sports give people a sense of having lived other lives, taking part in other people’s victories.  And defeats.  When sports are at their best, the spirit of the fan merges with the spirit of the athlete, and in that convergence, in that transference, is the oneness that the mystics talk about.’ (p212)

I was often struck by the difference between perception and reality in the book.  As a child of the 80s and 90s, I think I was aware Nike was an American brand but thought of it more as a global marker of sporting excellence and cool equipment.  Reading about Knight’s early life in Oregon eating pot roasts and drinking milk round the family dinner table revealed a far more All American background than I had ever envisioned.  In one sense, this is the genius of Nike - let the universal qualities of sporting excellence and superstar athletes do the talking.  In another, perhaps it’s simply the timing of when I became aware of the brand.  I missed its early adverts of Oregon treescapes and became conscious of it when the US and its sporting culture was much more revered in the UK than it is today.  Nonetheless, I think few people would’ve envisaged Nike’s early management as so pale, male and alcoholic based on the image it projects today!

This dissonance can also be found in Knight’s writing about himself.  In spite of his ferocious competitiveness in every aspect of his life, he makes repeated attempts to style himself as a dreamer, a rebel or even a bohemian.  He declares he is only ‘maybe’ interested in money as a young man but doing an MBA and an accountancy qualification are things only people who are very focussed on money do, in my experience.  In his defence, it could be argued that he could have easily had a career as an investment banker with far less risk than starting his own company.  However, for me, he is driven by competition and victory, not dreams and ideals, as he sometimes tries to make out.  Alternatively, his drive to succeed could be interpreted as a son’s diligent respect for his father’s conformist ideals of respectability.  Knight seems to have been very close with his father and would display a natural disposition towards pleasing him as a young man.  Against this, it seems his father wasn’t wild about the idea of him starting Nike.  In the end, I have to concede that Knight is a bit of a rebel because he did something crazy like start a running shoe brand when the market was so nascent it scarcely existed.  

Another example of saying one thing and then providing examples of almost exactly the opposite is how he simultaneously trumpets how honest Nike is as a company while describing how he violated the terms of his contract with his supplier!  Albeit there were mitigating circumstances, but like the MBA holding accountant who starts his own businesses in his spare time but is only ‘maybe’ interested in money - something doesn’t sit right.  My interpretation is that Knight is at bottom a competitor and not one overly concerned with sportsmanship.  

He also repeatedly asserts that he did very little as CEO and gave his employees freedom to do what they wanted and this is what resulted in such stratospheric success.  However, he then goes on to list how much everybody on the management made out of the IPO, which is also a strange thing to do for someone who doesn’t care about money!  He makes $178m and everyone else $5-10m, which shows he kept very tight control (p354).  Regardless of how much he praises his employees and says it was all because of them, he doesn’t recognise them with much equity in the company.  I think his stake around the IPO was close to 50%.  He even tries to justify this as his employees' idea, which is fairly absurd when contrasted with his claim that his employees did everything.  I’ve never met someone in corporate management who wanted to do more work and make less money!  Even if his employees did want a strong leader, this could have been structured in a way that gave Knight more voting rights rather than so much more equity than everyone else.  For me, he thinks of money as the metric used to determine success in the race / war of life.  He finishes the book by mentioning how he is worth $10bn and is mates with Gates and Buffet, which is a bit nauseating and clearly demonstrates his penchant for status and wealth.

So what was it that made Knight tick?  For me, Knight is a bloody-minded and combatant competitor, not at all a bohemian or a dreamer unless you count dreaming about trouncing your enemies!  As a college track runner, where the absolute classification handed down by the clock is as brutal as in any sport, he flourished, producing a 4.13 minute mile.  He once played badminton against a friend 116 times in order to beat him once.  The way he idolises military generals from WW2 also makes a lot more sense in the context of a person obsessed with victory rather than a dreamer or a rebel.  Making money is a competition of sorts and was a very vibrant and visible one in 1950s America.  Knight saw making money like a sport or, better yet, a war like his heroes the generals fought.  But in this war dollars are the determinant of victory, like the clock in athletics, rather than body counts, which seem to shock Knight as much as the average person.  In this sense, he is obviously admiring an admirer of the generals personal qualities and their place in history rather than being bloodthirsty.  But both the track and the marketplace were perfect competitive environments for Knight and he flourished in both.  Comparing himself to Prefontaine he writes, 

‘I’m all out, all the time, he said.  In their relationship I saw a mirror of my relationship with banks.  Pre didn’t see the sense in going slow - ever.  Go fast or die.  I couldn’t fault him.  I was on his side.  Even against our coach’ (p220).  

Knight’s extraordinary focus on business victory at all costs seems to have taken its toll on his personal relationships.  His wife is one of his former accountancy students who he then employs and then later dates and marries, which said a lot to me about the breadth of Knight’s interests and social circle!   Rather tragically, he seems to have very little connection to anyone - friends, family or employees - and seems ‘closest’, if that is even the right word, with the athletes who he sponsored.  He recounts how they all loved him too, which may well be true. He was writing them huge cheques, for one.  But for any sporty child from the last two or three decades it is probable that Nike played a huge role in their aspirations and that a sponsorship from Nike was, in some ways, the ultimate proof of their success.  In this sense, Knight has built something extraordinary in Nike, but I still think it is silly to pretend that money wasn’t a motivation.  It seems Nike the company and its business were his entire life.  Everyone who goes against him or leaves Nike is described as a traitor in the same way soldiers might talk about deserters.

The way Knight and Bowerman interact through their career is the best and most interesting bit of the book.  Like his father, Bowerman is gruff and grudging in the praise he gives to an extreme degree.  But the combination of Bowerman’s obsession with the gains athletes could make from equipment, especially footwear, and Knight’s obsession with growth at all costs is ultimately what seems to have driven the early successes of the company.  Knight’s own management style seems to have drawn from both his father-son relationship and his coach-athlete one.  He portrays himself as a stand-offish and distant boss but he has the guts to admit this and see the good and the bad in it rather than trying to make himself out as some kind of management guru, like so many billionaires seem to in their often self-aggrandising memoirs.

The book was easy to read and was reasonably well written perhaps because of Knight’s journalism degree or perhaps because he had a lot of money to hire a good ghost writer!  At bottom, it’s a good story and, in spite of my reservations about Knight’s true motivations, it doesn’t shy away from including some material that doesn’t show Knight in the best light.  In a personal sense, Knight is remarkably self-critical for such a successful person.  However, sometimes the book does seem to gloss over uncomfortable subjects.  For example, it gives a couple of paragraphs to things like labour issues and wage levels in the emerging economies where his products are manufactured, which seems a bit token.  He ultimately concludes that the kind of free market capitalism that has worked so well for Nike is the only way to bring prosperity to the emerging countries, which could be true but definitely deserves more critical examination than he gives it.  There is a slightly annoying tendency for Knight to include references to Greek mythology, Buddhist philosophy or whatever else he thinks might make him seem more cultured but overall it wasn’t fatal.

This book was a decent read and an interesting story.  Knight has a very high opinion of his work at Nike, which is understandable given its success and influence as a brand, but he is probably a bit unrealistic about his own motivations.  He also doesn’t seem capable of engaging with any criticism of it in a meaningful way although this seems less true in his personal life, where he openly admits his faults.  I wondered if he might have somehow derived this from the WW2 generals he idolises, who might admit personal failures but would never openly criticise the institution of the military!?