Randy Lyons

Wow, that is absolutely one of my very favorite videos, because not only does it bring to life the passion that I have for sport and the passion that I have for product, but it also showcases some of the work that we've been doing, and Michele and I have been doing together, over the last year to year and a half to bring some digital experiences to life.

My name is Randy Lyons, as Gene mentioned, and I've been with Nike for about 15 years. Three of that has been out of our European headquarters, which is located just outside of Amsterdam in the Netherlands.

Michele Power

And I'm Michele Power. I've been with Nike for six years. I've spent some time with Nike consumer business in China, and I've been here partnering with Randy for the last two years in EMEA.

Randy Lyons

Great. We're super excited to share a little bit of our own story with you about the transformation that our business has been going through, about the transformation that my team has been going through as a response to what our changes in the business are, and then a little bit of an introspective look at my own personal transition that I've been working on with the help of Michele over the last couple of years.

We'll get started right away with talking a little bit about what Mark Parker, who is our CEO for Nike globally, announced to the world a little over a year ago. He said that our company was ready to turn the corner and move into our next phase of growth, and we would do that by getting closer and closer to our consumer: closer to where they are, closer to where they play, and closer to where they interact and have access to Nike.

We would also do that and lead it with digital. We would lead that growth through the interaction that we have with our consumer, whether that be in our stores or with our digital channels.

It's an exciting point to be on the ground in EMEA, because along with that, we are also doing our own transition to respond. We're building out an extended engineering organization as we're going through some of our own movement around DevOps as well.

Let me talk a little bit about how we respond and how we interact with the consumer today. Behind me, you see a little bit of how Nike's organized. I think the most important part to set context or grounding for this conversation is to point out the marketplace where we believe our influencers are and where we will focus on experimenting and trying out some new capabilities, trying out some new ways of interacting with our consumer.

We are definitely working on this culture of experiment, test, learn, and then scale from that. And that is across EMEA. It's London, Paris, Berlin, Milan, and Barcelona.

Our touch points with the consumer are both in our stores. We have about 750 stores across EMEA. About half of those are owned and operated by Nike, and the other half are operated by our partners. It's sort of like a franchisee model where our partners are operating that store. But you walk in the door, there's a swoosh over the door, and you would expect that you were in a Nike door.

The other touch points that I think are exciting to talk about are across our digital landscape. Some very world-class experiences, all grounded by our core platform of Nike.com. But we've introduced some new apps over the last few years, two of which we just introduced this past year.

The Nike app and the SNKRS app came to Europe this past year. Through the Nike app, we curate the experience for the very best of our members to connect with the very best of Nike. In the SNKRS app, we actually work very closely to continue to motivate, inspire, and lead our sneakerhead community through the hunt, and reinvent the hunt with things like leveraging augmented reality and being able to get access to that high-heat product to the sneakerhead community that's looking for the very best and hardest-to-get product.

And then our Nike Running Club and Nike Training Club apps. Two of the leading, actually the world's best running app. In the U.S. and EMEA, the Training Club app is number one as well.

Those are our touch points for our consumer. What's important about all of those touch points is that we have one member profile that weaves those experiences together. You log in with one profile, and that profile follows you from Nike.com through the app experiences and even down into our stores, so that we get to know the consumer more and more. That allows us to curate that experience for them.

Michele Power

That gives us a great platform to take advantage of the major shifts that are happening all around us today.

You all know that mobile dominates. Your mobile phone is practically an extension of your limb at this stage. But that means our consumers are very empowered and very informed. In actual fact, 80% of consumers consult that very phone, or limb, before they make a purchase in store.

This means our experiences have to be seamless. A point of contact can't be a point of friction.

But this empowered consumer wants more. They want personalization. They expect us to know them, to get to know them, and to exceed their expectations. They want us to anticipate their expectations, not just meet them.

Pretty tricky, right? How are we going to do this?

Just one word: speed.

That's why I'm really excited to be here with you today, especially with this theme of "get together and go faster," because we do need to go fast if we're going to go at the pace of the consumer.

How are we going to do that? Certainly by working closely with the principles that you have brought together in your movement, and partnering with technology, and understanding that to move fast, we have to test and learn, and sometimes test and fail, and test and learn again.

But as well as that personalization, we also have to take advantage of the disruption in our marketplace. Probably some of you people here have come up with some of the very smart ideas as to why everything is so fast and easy for our consumers. Certainly here in London, it seems to get faster and easier every day. But this disruption gives us an opportunity, a new way to connect with our consumers.

But they don't just want fast and easy. They don't want to just do transactions. They want distinctive experiences. We know that we must give them distinctive experiences wherever they interact.

A tall order, with that demanding consumer right in the center, with these skyrocketing expectations. But you know what? Who cares how much their expectations skyrocket? Let's just surpass them.

How are we going to do that? By really leaning into the opportunities for growth. There is so much opportunity in this next explosive pace of growth, really brought to life by all the great technologies that are entering our world.

First and foremost, at its core, what Randy talked about earlier, what's critical is that membership. What's really critical, what we have partnered with Randy and his team on, is to make sure that we have one member profile.

Whether you want to track that run you might be thinking of doing tomorrow morning, or whether you're searching for your new sneakers, or whether you just want to access the great product, we need to make sure that you just have one member profile.

Why? Because we want to go on the journey with you. Membership is about closing the gap between the emotional connection you have with the brand and actually accessing what you want. If we build those lifelong relationships, we can add inspiration, value, and help to our members as they go through their journey. Not my journey, but their journey.

But that's just one element of this explosive opportunity for growth. Another key element where we have to partner together is on what we like to call NCX, our Nike Consumer Experience. This has to be a unified experience, whether you're shopping in an owned store in London or visiting a partner store in Paris, or anywhere across our ecosystem.

But it has to be relevant for you at that part of the journey. It has to be an elevated experience, and it has to be exciting.

As well as that, there's even more opportunity for growth if we partner closely with technology. There are a lot of new business models out there. I mentioned earlier about the disruption, but disruption gives us a chance to create new business models. A small example we have here in EMEA is we already have an inventory partnership with Zalando and some of our other key partners across EMEA.

But all this shift and all these opportunities, it's a lot coming together. So we have to make sure that we focus our investments, to make sure that we focus them on the NCX, fueled by digital and serving the consumer.

To do that, it wasn't just Randy that had to go on a personal journey. Together, we had to change our game and think about how we would do things differently and raise the bar to embrace those dynamic shifts and leverage these opportunities.

Randy Lyons

This is actually one of my very favorite slides. This is where I geek out a little bit, because I love charts and graphs. As a technology leader, as many of you are probably sitting in the audience and you're thinking about your own transformation that you have to go through, this is exciting.

I get chills by understanding that our CEO has just told the world that we are going to get closer to the consumer, and we're going to drive our next level of growth, leading and fueled by technology.

Chills and butterflies. Holy moly. Butterflies. Careful what you ask for. Am I ready for this? Is my team ready for this?

I did a little bit of introspection. I worked with my leadership team. We had just come off of an engagement survey, and I was really nervous about, as we were building out this future of how we were going to contribute to the overall growth of the company, were we ready for that? Did we have the right environment?

A quote that comes back to me over and over again, I think is attributed to Peter Drucker: "Culture eats strategy for breakfast."

Michele Power

Every day.

Randy Lyons

Every day. I absolutely subscribe to that and believe in it. So we went to work on our culture in creating the right environment for our team.

I wanted to share a little bit of the journey that we went through on our transformation of our culture.

The first thing that we had to do was we had to change the way that we thought of ourselves. As a technology organization, there was a lot of language on the floor about how we supported the business, how we helped the business to achieve, and there was this divide between the business and the technology team.

We thought about the growth that Michele laid out for us and what we had to achieve, and we realized that we could not be in support of the business. We had to be of the business. We had to be the business in order to move through this growth cycle. That's the mantra we created: we are of the business.

While we're super good at Nike in marketing terms and putting some good branding spin on it, we realized we had to underpin it with some actual actions.

One example is we have a weekly all-team huddle. The entire team comes out on the floor. It's a stand-up meeting, and we changed the format of that meeting. We first did a little education on the key and core KPIs of the business with the help of Michele and her team. Then we started talking every single week about the performance of the business.

How did we perform in dot com last week? What were the results in our factory stores last week? How did our partners do last week? How did they achieve the KPIs? How did we support that achievement? Or did we have an outage on dot com that detracted from that?

We started through a difficult transition. In the beginning, it was a little awkward. The team wasn't used to talking in those terms. But the change that happened over a few months was that the questions that came up from the team started being really insightful about how their work contributed to those results.

Michele Power

In fairness, Randy, I think you picked it up pretty fast. You still have a few questions, but it seems to come pretty naturally at this stage. A bit more naturally than if I started to talk technology.

Randy Lyons

Yeah, I'm not so sure about that, Michele. I'm ready to set you down in front of a computer coding at any moment.

The other change that happened was the interaction between Michele's team and my team, the interaction between our teams in supply chain, between the GMs, between the merchandising teams. There were different kinds of conversations that were happening, different kinds of questions that were happening.

When you had to solve a problem, the questions that were coming up were always through the lens of the business. That was a very powerful change that started to happen. We're still absolutely on that journey, but we're seeing some good results from that.

We also needed to make sure that we're all headed in the same direction. The team understood at a very high level what the strategy of the company was, but how their work contributed to that strategy, this is one of the things that we took out of our engagement survey, is that they didn't understand how their work contributed to the work we were doing across the business and how we were driving the growth of the business.

So we spent more time talking about strategy. There are a couple of key moments through the year where I share the detailed strategy with the team, but more important than that, we field-test it a little bit. The language that I use, the language that my leadership team uses, we throw darts at it a little bit.

I start looking across the organization, and I look at individuals, and I say, "Can Martijn see himself in that strategy and how his work relates to it? Can Sander see his work in there? Can Aconcha see her work in there?" It needed to be not just the folks who are working on new capabilities and new features, but can the support organization see themselves in that strategy and how they contribute to it? Can the QA tester see themselves? Can the Scrum Master see themselves? Can the product organization see themselves in that strategy?

If the answer was no, we went back to the table and worked on the language a little bit.

More importantly than that, after we talked about it, then the team had to come pitch to us. We looked out six months, and we asked them to tell us what's their work through the lens of the strategy. We're constantly looking at what is the work that each individual's doing, and how does that support the strategy, so that they can connect their work directly to how growth happens.

Then we wanted to focus a little bit more on the environment. This is not rocket science. This is sneakers and T-shirts and leadership 101, right? Recognize and celebrate.

The team had given us feedback that they didn't feel like they were recognized for the value they contributed, or they were recognized for their work. We were like, "Hey, hang on. We do a big award ceremony every year. Hang on, we do that actually twice a year. What do you mean your work is not recognized?"

We realized that it just wasn't a part of our culture to recognize on a regular basis, to recognize everyone in the organization. So we took that weekly stand-up that was anchored on the front end by the business results, and we anchored it on the back end with shout-outs.

We wanted to take the responsibility, the accountability for recognition off the shoulders of leadership and put it out into the team. So now the team does a shout-out at the end of someone who has really gone above and beyond, someone that helped them solve a problem, someone who just did really, really good, solid planning that enabled their execution to be super smooth and solid in the way that they executed.

This started changing the culture even on the floor. Again, it started out a little awkward. It sounded super American for their leader to be doing it, and they were not so comfortable with that. Now I actually have to cut them off many weeks because they're so into shouting out for their partner, and they find that that starts to break down walls and barriers, which helped us with our next item, which was becoming one team.

What we found was that we have these org charts, and the org charts all have lines on them. Those lines, under the guise of healthy competition, started becoming unhealthy competition. Those lines started becoming hurdles to cross over. Those lines started becoming walls to break through, and it became really difficult to react with speed. It got much slower to accomplish anything that happened.

So we started this mantra again, love the marketing spin that we do internally: #OneTeam. We started opening up our doors. We started opening up our walls. Our all-team huddle is a broad team huddle now. It's not just product and engineering, it's support, it's QA, it is procurement, it is legal, it is talent acquisition. Anyone who needs to come and play on the field with us to make sure that we're able to achieve our objectives, we bring them in.

Those strategy sessions that we pitch back on, we bring them in, and we include them. Granted, this is a journey. This is one personally that I still need to do a lot of work on as well. I'm super competitive by nature, which is what drew me to Nike in the first place. But we're on that path, and we're on that journey.

Then the last thing I wanted to talk about was fun. It needs to be a great environment for people to come and work every single day. Not just the day we have the happy hour, not just the day that we celebrate and do the awards thing. Every day.

We want to make sure that we take our work seriously, but not ourselves. This needed to start with leadership as well. It just needed to be an environment where people can laugh and where there's energy, and where we give energy instead of take energy.

Easy things, like I know that my body language, I will get super stressed. My schedule's often back to back to back to back to back to back, and I'm racing out to get my ham sandwich, and I am focused on that ham sandwich, and I'm running out of my office.

To the team, they had no idea that I was racing out to get a ham sandwich. All they knew was Randy was super serious, and he's running. Holy moly, what's going on?

I needed to check myself at the door. I needed to check my body language. The leadership team needed to check our body language. We needed to spend more time on the floor joking, laughing, giving energy, and letting the team know that it's okay to have fun. It's okay to have a good time.

We talk the serious conversations behind closed doors, and when we come out, it's all about making sure that the team is energized and that the team is headed down the right path with energy and that they enjoy getting there.

Michele Power

Well, even with all the shifts and everything that's been going on and launching the apps, you guys seem like you're having a lot of fun.

Randy Lyons

Yeah.

Michele Power

Sometimes too much. By the way, there's more options than a ham sandwich.

Randy Lyons

Right. So if this is the work that we've done on my team, I also realized that there might be some work to do on myself.

When I came to Europe, it was with the expectation that I was creating something that was a little different, that we would be headed down this path of distributed engineering, and I was going to build that capability for the organization and add capacity globally by building out an engineering capability in Europe.

But then this transformation in the business came about, and I realized that I needed to change as well. I needed to move past where I had started in my career with traditional technology, from being an order taker and then becoming an advisor. I thought I had gotten pretty good at being a partner.

But what I realized was that I was not at the table as a leader for the business. I was on the org chart, I was in the slide and the picture, but I was sitting at the back of the room, not with my feet under the table.

I needed to do some work on myself to become, instead of a technology leader playing business, a business leader with the foundation of technology beneath me.

I needed some help with this, and I always think about the person with the purse strings first. But I got a little vulnerable, and I approached Michele, and I asked Michele for some help.

I asked Michele to help me go on this journey to become a business leader. I asked her to help educate me on the P&L and how technology was going to contribute to the P&L. I asked her to hold me accountable and not let me back away from the table, but to pull me into the conversation as we're building out strategy, because this transformation we were about to go through, we would not be successful if I could not be in the game with the team.

I needed to move from, in the spirit of the World Cup and what's going on, congratulations England yesterday.

I needed to stop being the physio. I needed to stop being the trainer. I actually needed to move out of the training room and onto the pitch. That was going to take some help. So I reached out to Michele for that help.

Michele Power

But the reality was that I needed Randy's help just as much.

In the shifts that I talked about earlier, what you will have seen as the common theme is that technology is embedded in how we connect with our consumer. How we connect with our consumer defines our strategy. Therefore, technology is part of every step of our strategy.

The days when technology was a cool toy, or a nice-to-have, or something somebody asked for a budget for that you weren't quite sure what it would do, are long gone. It's part of how we interact with consumers.

So I had also realized that I had missed a few moments and that I needed technology in the room real time. To do that, we did need to talk the same language. That's why the cultural shift that Randy had been going on with setting the KPIs was so important. Because the language we talk is not finance or technology, it's actually strategy and the consumer.

So don't worry, Randy doesn't have to learn about foreign exchange or embedded derivatives or U.S. GAAP, and I'm certainly not going to learn JavaScript.

Randy Lyons

I swear she could do it. She could do it.

Michele Power

But we do need not just Randy and I, but also our teams talking that same language and thinking together in the consumer and the strategy.

Maybe just to give an example of how this worked and the benefits of it as we're here in London. Randy mentioned at the start of our presentation that we're focused on our key cities. Cities are the sharp point of change. It's where it accelerates from, and London is one of the most dynamic cities at the moment.

You may have seen the comments on social media about the Nothing Beats a Londoner campaign. That was all going on at the same time as we were launching the Nike+ app, the Nike SNKRS app, all at the same time.

But to bring those to life, you have to go back to when we had our earlier strategic discussions. If I hadn't had that connection with technology and realized that I needed that expertise in the room real time, we probably wouldn't have taken the right foundational steps to be ready to launch those, and I would probably have had to do a lot more rework.

I'm not against testing and learning, but I am against missing having the right people together to help you, so that you don't have to go back and redo something just because you didn't communicate in time.

But what does this mean in our new ways of working, which we're still improving and still learning?

The day-to-day reality is I need technology in the room for almost all the business meetings. I know. I said almost all the business meetings.

Whether it's the three-year strategic plan, whether it's the 90 days for the next quarter, whether it's reprioritizing or balancing investments, I need Randy in the room. Even when he's traveling, I need to stay in constant contact.

So now you might be thinking, there's no escape. You're stuck with the CFO. Well, maybe you can think of it in a different way. Just imagine the impact you can have, given that it's technology that's impacting how we connect with consumers.

Randy Lyons

Yeah. It's amazing, the transition that we've been through.

We actually can tag-team quite a bit, where I know that if I'm not in the room, I completely trust Michele to represent me, and the same thing in reverse. If one of us is going to be there, it's enough for us to be embedded in that because we're all a member of the same leadership team. That's been a transition that's taken us a while to get to, and one that we're continuing on the journey for.

But hopefully some of the things that I shared and that Michele shared resonate with you. I know that most of you in the room, I'd be surprised if there's not one of you that isn't going through your own transformation internally.

I would encourage you to look at culture first to help you with that transition, and I would also encourage you to be on the pitch with your team as a member of the business.

Michele Power

And when you're on the pitch with the team, you're not just any player. You're the star player. You're the high-impact player. You're Harry Kane. You're Simona Halep. Yeah?

Your CFO needs you. They need you now, today.

Thank you.

Randy Lyons

Thank you.