Nike Failed and Ferrari Successful Turnarounds a Study In Tech Management Contrasts
What is the role of technology in your organization? Silver bullet solution to every problem? Or enabler to the core assets of the brand? Based on two recent WSJ articles on both Nike (Donahoe missteps) and Ferrari (Vigna turnaround), it's clear which is which.
Ferrari:
* Started with a focus on people, and a great product that meets the needs of its enthusiasts.
* Flattened extra management layers with the express goal of getting leaders closer to direct customer feedback and improvement.
* "Imagine an onion, the center is the people, the next layer is product, and the final layer is process." - nice quote which fits this business well.
* Moved to a small team structure where the test drivers are the "customers" and equal to the engineers, rather than nested under the engineers.
* Eschewed consultants in helping it choose its vision, instead trusting its top employees feedback. CEO directly collected feedback and developed a point of view.
Nike:
* Neglected the core of its product: innovation, instead it rested on its laurels. How many times have we said here "what does Nike stand for anymore?"
* Cut out its retail partners in an attempt to "own the customer" thinking this was the biggest asset.
* Took on more inventory at exactly the wrong time.
* Invested in technology for its own sake.
* Followed Silicon Valley fad to cut staff for its own sake. It didn't help.
In truth, Phil Knight and the former CEO (current Exec Chair) had the wrong goal.
The goal is not to "own" the customer. The goal is to "serve" the customer. It's a matter of priority.
If your goal is only ownership and not service, you will own very few customers looking for discounts and your business will decline.
If your primary goal is service, and then ownership, you will own your most important customers for life, and recognize that your retail partners can service many of your customers in a healthy, growing business.
After all, if we are not in service of the customer... then our businesses are not long for this world. No matter how great your legacy brand is.
