Phil Knight, MBA ’62, Co-founder and Chairman Emeritus, Nike

1. 0:00 – 0:19

   Intro

   1. SPSpeaker0:00

      [upbeat music] [audience applauding]

2. 0:19 – 3:49

   Phil Knight returns to Stanford: banter, “Welcome home,” and why he’s on stage

   1. SPSpeaker0:19

      Phil?

   2. PKPhil Knight0:20

      Pretty good.

   3. SPSpeaker0:21

      Welcome home.

   4. PKPhil Knight0:22

      Great to be home, but, uh, I couldn't help but, uh, be really pleased to see, uh, the dean wearing a business suit and Nike shoes, Sean.

   5. SPSpeaker0:31

      [laughs]

   6. PKPhil Knight0:32

      You know, but I think we can all be, and we can all be glad that, uh, basically I was not the founder of Jockey underwear [laughs] .

   7. SPSpeaker0:41

      [laughs] We'll, we'll try and make that a permanent change in Dean Levin's wardrobe. Now Phil, we know you don't do too many public speaking events, and a question a lot of people have asked is, what does it take to get Phil Knight up on stage? So I thought maybe we should share the story of what got you here today. Now, you probably remember that we first crossed paths a couple of months ago just over there at Mc- at McDonald Hall.

   8. PKPhil Knight1:12

      Mm-hmm.

   9. SPSpeaker1:12

      You were entering the building when I very politely interrupted you, introduced myself. Uh, we exchanged a couple of pleasantries, and then you went on inside about your day. Now, what you're probably less aware of, Phil, is that I decided to camp outside McDonald Hall for the next 40 minutes-

   10. PKPhil Knight1:33

       [laughs] Yes

   11. SPSpeaker1:34

       ... watching every possible human exit to the building so that I could find you and, you know, casually bump into you a second time to pitch you this interview.

   12. PKPhil Knight1:45

       [laughs]

   13. SPSpeaker1:49

       It's creepy, I know.

   14. PKPhil Knight1:50

       Yeah, yeah.

   15. SPSpeaker1:51

       [laughs]

   16. PKPhil Knight1:52

       That, but that's how it happened.

   17. SPSpeaker1:53

       [laughs] I'll be honest, I was pretty nervous when you did come out that second time. It was fight or flight. I very nearly walked the other way, but there was this voice in my head. It just kept saying, "Will, just do it."

   18. PKPhil Knight2:08

       [laughs]

   19. SPSpeaker2:14

       [audience applauding] But really, Phil, we are so thrilled and excited to have you back on campus, and I think I speak for every student here when I say how grateful we are for this incredible business school.

   20. PKPhil Knight2:30

       Well, thank you, but, uh, you know, having stalked me for at least 40 minutes-

   21. SPSpeaker2:35

       [laughs]

   22. PKPhil Knight2:36

       ... I feel that there should be some payback.

   23. SPSpeaker2:39

       Oh, it's on, too.

   24. PKPhil Knight2:40

       And I know that most of you know that, uh, Will's mother, Mags, has come all the way from Ireland to be here today.

   25. SPSpeaker2:46

       [audience applauding] [laughs]

   26. PKPhil Knight2:52

       And having come such a long way, I think you should reveal something about yourself that she doesn't know.

   27. SPSpeaker2:58

       [laughs]

   28. PKPhil Knight3:02

       [laughs]

   29. SPSpeaker3:03

       Phil, I don't know what you're trying to suggest.

   30. PKPhil Knight3:04

       [laughs]
3. 3:49 – 5:09

   What Stanford meant to him: returning to a turning point and hearing old professors’ voices

   1. PKPhil Knight3:49

      Yeah, I will, but I wanna tell you first about coming back to campus after being gone for a while. Uh, that, uh, you go out 20 years or so and you haven't been back for a while, and you come back, and it's more about just sharing a moment with family and friends. It's for a moment you step back in history and remember when you had all the world lie- laying out before you, and you decided the things that you were gonna find important, and it was really the start of you becoming what you ultimately became. When I come back, for just a moment I always hear the voice of Frank Shallenberger, Bob Davis, Jim Porterfield, and I know that sounds sort of corny to an educated group, but I promise you that over half the people in this room, when they come back here 20 years from now, will have those same feelings. Uh, you know, for me, you know, it was, uh, uh, well, yeah, that, uh... I was the guy that thought an extrovert was a person that stared at other people's shoes. That, uh, the, uh, the, uh, uh, it was a, a time for me to kind of grow and, uh, and chase what I was really gonna become. And so it was really a, a big transitional period for me in my life. And as I say, to this day when I come back, I still get inspired and lifted up. [clears throat]

4. 5:09 – 5:51

   From track-focused undergrad to business focus: why GSB was the right place at the right time

   1. SPSpeaker5:09

      Do you have any favorite memories from your days back at Stanford?

   2. PKPhil Knight5:11

      Oh, that, uh, no, it was just a turning point in general for me, that, uh, you know, my... If I was honest, I'd say that my undergraduate, uh, career was really focused on track. [laughs] And it got to be when I got to be a graduate student that I was really focused on what it was I wanted to be, and this was just the right school at the right time with the right inspirational professors, and it really doesn't get any better than that. [clears throat]

   3. SPSpeaker5:37

      So you do graduate the GSB in 1962.

   4. PKPhil Knight5:40

      Yep.

   5. SPSpeaker5:40

      This is a time when Silicon Valley isn't even a phrase yet.

   6. PKPhil Knight5:44

      Right.

   7. SPSpeaker5:45

      And you had what you call this crazy idea.

   8. PKPhil Knight5:47

      Mm-hmm.

   9. SPSpeaker5:48

      What was the crazy idea, and where did it come about?

5. 5:51 – 7:03

   The “crazy idea” begins: an entrepreneurship class paper that became a real plan

   1. PKPhil Knight5:51

      Well, uh, I took the entrepreneurship class from, uh, Frank Shallenberger, and basically the, the project, he had a term project where you basically either attach yourself to a company in the area or, for the purpose of the paper, made up a company and, and how it would succeed. And, uh, even in those days, a lot of my classmates were writing about electronics, which was certainly beyond me since when I turn on a light bulb, when I turn on a electric switch, the light bulb comes on, it's magic for me.

   2. SPSpeaker6:18

      [laughs]

   3. PKPhil Knight6:19

      But, uh, my old track coach was always, uh, working with shoes, and that, uh, felt that, uh, you know, a light, lightweight in shoes was something that was neglected by the major manufacturers, Adidas and Puma. And indeed, my senior year, Otis Davis won the, uh, Pa- Pacific Coast Conference championship in a pair of homemade Bowerman shoes, which were an ounce light, lighter than the other shoes. So I kind of put those things together and, and said, "If you were starting a shoe factory, would you start it in Germany?" And I said, "It's such a labor-intensive business, it makes more sense to start it in Japan," Japan being the country that, uh, took German cameras and, and, uh, dominated the camera market, says could they do the same thing in sports shoes. And that was really the thesis of the paper, which ultimately I got caught up in, and here we are.

6. 7:03 – 8:02

   Validation and motivation: getting an A, fearing accounting, and choosing meaning despite long odds

   1. SPSpeaker7:03

      Now, you got an A on that paper, right?

   2. PKPhil Knight7:05

      I did.

   3. SPSpeaker7:05

      Okay.

   4. SPSpeaker7:06

      [laughs]

   5. PKPhil Knight7:07

      But that mattered.

   6. SPSpeaker7:08

      [laughs]

   7. PKPhil Knight7:09

      If, if he'd have ridiculed the paper, I don't know where we'd be today.

   8. SPSpeaker7:11

      [laughs]

   9. SPSpeaker7:12

      [laughs]

   10. SPSpeaker7:14

       But Phil, this was a time when entrepreneurship post GSB was not just a less traveled path, it was probably a less celebrated path. What gave you the confidence to push ahead?

   11. PKPhil Knight7:26

       Well, if I didn't, I was gonna have to be an accountant. [laughs]

   12. SPSpeaker7:29

       [laughs]

   13. SPSpeaker7:29

       [laughs]

   14. SPSpeaker7:30

       And, uh, that's, that's a scary thought.

   15. PKPhil Knight7:32

       No, no, it was... [laughs]

   16. SPSpeaker7:33

       [laughs]

   17. PKPhil Knight7:34

       No, but it was a, uh, it, it was, when I wrote the paper, it, it, uh, it just stayed in my head. And at the time, I think the, the ratio was that 26 out of twen- 27 new companies failed. So I knew the odds weren't high, but I really began to feel if I could do this, that would, uh, would really be meaningful to me and something that I would really have a lot of passion for and about. And, uh, so that's where it started, and away we went.

7. 8:02 – 9:35

   Early scrappiness: selling shoes from a car trunk, doubts, and why the hardest days were the most fun

   1. SPSpeaker8:02

      Now, two years in-

   2. PKPhil Knight8:03

      Mm-hmm

   3. SPSpeaker8:03

      ... many of your classmates have gone down more traditional career paths. You're back in Oregon. You're living in your old room-

   4. PKPhil Knight8:11

      Mm

   5. SPSpeaker8:11

      ... in the family house, and you're selling shoes out of the trunk of your car.

   6. PKPhil Knight8:16

      Mm-hmm.

   7. SPSpeaker8:17

      Did you ever have doubts in those moments, and what was it that kept you going?

   8. PKPhil Knight8:22

      [laughs] Well, obviously, there were a lot of doubts. Um, but, uh, but, uh, I enjoyed what I was doing, and I really thought that, uh, I was bringing a product, uh, to the world that, uh, was better than the other product. And, uh, and so I believed. And, uh, and if you read the book, uh, it wasn't too long before I had a bunch of other people that believed as well. And, uh, we just, uh, through all the ups and downs, and there were plenty of downs, that, uh, we never stopped believing. And, uh, so, uh, and a lot of people say, "Why did you stay with it? There were a lot of negative moments and a lot of downturns." And, and I look back on those days as the most fun I ever had in business. It was, uh, it was, uh, the ch- every day, every Monday you went to work and you knew it mattered what you did, including whether you were gonna meet payroll on Friday. But, uh, it was a, an exciting time and, uh, that, uh, that, uh, Frank Shallenberger had done a wonderful job of preparing us for, you know, being an entrepreneur. Bob Davis, a marketing professor, said, "If you're gonna be an entrepreneur," he said, "every day is a crisis, and every Friday is a Jesus crisis."

   9. SPSpeaker9:30

      [laughs]

   10. SPSpeaker9:31

       [laughs]

   11. PKPhil Knight9:31

       And, uh, that was, it was kind of the way it was. [laughs]

8. 9:35 – 10:46

   Hustle and uncertainty abroad: traveling to Japan, overcoming shyness, and the central role of belief

   1. SPSpeaker9:35

      Now, you also talk in your book, Shoe Dog, about those early trips to Asia.

   2. PKPhil Knight9:39

      Mm-hmm.

   3. SPSpeaker9:40

      So you're 24 years old, traveling alone-

   4. PKPhil Knight9:43

      Mm-hmm

   5. SPSpeaker9:44

      ... to Japan. It's a culture you don't know, a language you don't speak, to try and broker that first shoe import deal. So this was a time before Stanford's global study trips or GMIXes. Where did that ability to embrace hustle and uncertainty come from in you?

   6. PKPhil Knight10:05

      Well, by the time I got there, I believed. And, uh, so that, uh, I, I believed that, uh, that, that it was a good idea. I, I believed that, uh, if we could, uh, get a cooperative Japanese factory, that, uh, I could make the idea work. And so yeah, that overcame, you know, when you're a b- bit of an entre- entre- an- introvert, why, uh, you basically have to, you have to believe. You have to overcome the shyness to, uh, to take certain chances, and, uh, I was willing to do that. And, uh, you know, there were a lot of ups and downs, but, uh, ultimately it worked. And, uh, you know, I think at the end of the day, you gotta believe, and that, and that's what I did have ab- maybe above everything else. Mm-hmm.

9. 10:46 – 13:27

   Bill Bowerman as hero and teacher: “competitive response,” attitude, and principled toughness

   1. SPSpeaker10:46

      Now, as you said, the team grew and you weren't alone in this endeavor. And I think there's no story of Nike without, of course, mentioning Bill Bowerman-

   2. PKPhil Knight10:56

      Mm-hmm

   3. SPSpeaker10:56

      ... your former track coach at Oregon, later US Olympics track coach, and of course, your co-founder-

   4. PKPhil Knight11:02

      Mm

   5. SPSpeaker11:02

      ... of what became Nike. You've described yourself as a person who's always needed heroes.

   6. PKPhil Knight11:07

      Mm-hmm.

   7. SPSpeaker11:09

      Why was Bill a hero to you, and what is it you learned from him?

   8. PKPhil Knight11:13

      Well, he was a very unique person that, uh, that he was probably the best track and field coach in the world, for one thing. But, uh, he was also, uh, had a certain command presence and a certain belief and certain leadership things that, uh, that, that leaders did. You know, he, he said, "I'm not a, I'm not a track coach." He says, "I'm a professor of competitive response."

   9. SPSpeaker11:36

      [laughs]

   10. PKPhil Knight11:36

       And, uh, he, uh, he had a, a way of, of having sayings that, uh, got your attention and really focused you on attitude. His strategy for running the mile was start out and run the first two laps at a very fast pace, run the third lap as fast as you can, run the fourth lap triple your speed.

   11. SPSpeaker11:53

       [laughs]

   12. SPSpeaker11:53

       [laughs]

   13. PKPhil Knight11:54

       And, and, uh, and, and he said that, uh, you know, the Oregon Trail, he says, uh, the, uh, the coward, the, the cowards never started and the weak died along the way. That leaves you and me. And that's, uh, once again, him getting at kind of, kind of your attitude. And his, his best one for me was always, uh, uh, "Do right and fear no man." And, uh, so he had a big influence on my life, certainly the biggest influence other than my parents. And if you go back through the sayings and, and who he was, he was always working on attitude. This is a man that had seen combat in World War II, you know, fired a gun and been fired at, and, uh, he had seen competition at its, its most extreme level, and he thought he could... His job as a professer- professor of competitive response was to get kids ready for c- young men and young women ultimately, uh, to be ready for the, the toughest competition they can face. So, you know, he brought to me, you know, a certain attitude, which, uh, you can be an introvert and have attitude. And, uh, so that was sort of me, and he had a huge influence on that and, and he was a, a hero of mine in those days and to this day.

   14. SPSpeaker13:04

       Mm. When you first met him, you described it as love and fear at first sight.

   15. PKPhil Knight13:09

       Right. And then there was a little hate that came after that.

   16. SPSpeaker13:11

       [laughs]

   17. SPSpeaker13:12

       [laughs]

   18. PKPhil Knight13:12

       But, uh, he, he really kind of believed in hazing-

   19. SPSpeaker13:15

       [laughs]

   20. PKPhil Knight13:16

       ... [laughs] that, uh, you had to prove that you wanted to be there, and so he would make you f- go through hoops, which I did.

   21. SPSpeaker13:24

       Mm. But you did.

   22. PKPhil Knight13:25

       Somewhat reluctantly.

10. 13:27 – 14:59

    The first Nike crew: odd but talented “butt faces,” foxhole trust, and shared commitment

    1. SPSpeaker13:27

       Now, beyond Bill, of course, you talk with a lot of affection about that core early Nike team.

    2. PKPhil Knight13:33

       Mm-hmm.

    3. SPSpeaker13:34

       And I think you had a name for each other, right?

    4. PKPhil Knight13:37

       Well, yeah, we did. [laughs]

    5. SPSpeaker13:40

       Oh.

    6. SPSpeaker13:41

       [laughs]

    7. SPSpeaker13:42

       I see. You're playing that game.

    8. PKPhil Knight13:43

       [laughs] No. It, that, uh, the, the first four or five people in the company, we wound up calling each other butt faces, which, uh-

    9. SPSpeaker13:52

       [laughs]

    10. PKPhil Knight13:52

        ... we, we don't do that anymore. We're-

    11. SPSpeaker13:54

        [laughs]

    12. PKPhil Knight13:54

        ... a more, more professional group now. [laughs]

    13. SPSpeaker13:57

        You know, our View From The Top team, we have a similar name for each other, actually, so.

    14. PKPhil Knight14:00

        Good.

    15. SPSpeaker14:00

        Yeah.

    16. PKPhil Knight14:00

        That's healthy.

    17. SPSpeaker14:01

        [laughs] But what was it about that early team and that culture that made it so successful?

    18. PKPhil Knight14:07

        Well, I think first of all, uh, they were a bizarre group to say the least, each of them in his own way. But, uh, they were... And I hope this showed in the book that they were able, very able people, that really kind of didn't get along with society in general, so it was kind of a perfect fit, and they complemented each other in terms of their abilities. And then lastly, all of them believed. It was they, they just, when we would hit a down period, nobody thought, "This is end." We're just, "Okay, we gotta get together and find our way out of this one." And so it was fun being in a foxhole with those guys. And, uh, and we, basically, it's corny, but we loved each other and we were gonna go through this, uh, come hell or high water. And, uh, it was a very exciting, intense time and, uh, it, uh, as I say, I, I, I loved those times.

    19. SPSpeaker14:55

        Mm. You fought a lot of crises together.

    20. PKPhil Knight14:57

        Yeah, for sure.

11. 14:59 – 16:59

    Culture at scale and brand stance: preserving attitude, accepting polarization, and taking stands

    1. SPSpeaker14:59

       In recent years, Phil, we've seen many high-profile disruptive companies, um, being pressured to rein in what we're seeing as aggressive, macho, win-at-all-cost cultures, cultures that have brought these companies so much early success in their life. Just last year, Nike faced some similar accusations and the management team made some pretty decisive changes. When you grow from a startup to a 74,000-person team-

    2. PKPhil Knight15:29

       Mm

    3. SPSpeaker15:29

       ... how do you preserve the best of that winning culture in a more complex, diverse global workforce?

    4. PKPhil Knight15:35

       Yeah. Well, you touched on a lot of things there that, uh... I mean, I do think that, uh, Nike's culture is a big, uh, part of its reason for success. And the culture really was formed in the early days by the, by the four people plus me, uh, and, uh, it still exists to this day. They say, a lot of people say, "Well, Phil had a dominant influence on that," and he didn't. I mean, I've often said many times, uh, Nike is young and irreverent, and I'm neither.

    5. SPSpeaker16:02

       [laughs]

    6. SPSpeaker16:02

       [laughs]

    7. PKPhil Knight16:03

       Uh, that, uh, but it, it did, uh, it did, uh, to use Berman's word, attitude, they came with a certain attitude and, uh, and it was sort of us, that's who we were. And, uh, the culture's been modified some, and which is a good thing, and, uh, but it's still kind of basically there, and I think it's a, a big part of its strength. That, uh, um, yeah, so I, I, uh, I hope that that culture is, uh, is basically in place, you know, 20 years from now. It, uh... And, and it's one thing, it fits with sort of our view, uh, then and now about what a brand is. You know, it doesn't matter how many people hate your brand as long as enough people love it. And as long as you have that att- You can't be afraid of offending people. You can't try and go down the middle of the road. You have to take a stand on something, which is ultimately, I think, why the Kaepernick ad worked.

    8. SPSpeaker16:56

       Mm. Well, let's, let's jump into those athletes.

    9. PKPhil Knight16:59

       [laughs]

12. 16:59 – 20:04

    Choosing athletes who aren’t afraid: John McEnroe, intensity, and becoming a Nike “hero”

    1. SPSpeaker16:59

       So I wanna take you back to 1978, Phil. You stumble across a shy, timid, retiring Stanford tennis player by the name of John McEnroe.

    2. PKPhil Knight17:10

       Timid, I wouldn't say. [laughs]

    3. SPSpeaker17:12

       [laughs]

    4. SPSpeaker17:12

       [laughs]

    5. SPSpeaker17:13

       Well, we got to see a little bit of John in that video, but for anyone who doesn't know tennis, John is a young, fantastic tennis player who's as well known for breaking racquets as he is breaking serve. He is everything that the tennis establishment at the time, the major- majority of the market, was not. So what made him the right ambassador for Nike?

    6. PKPhil Knight17:37

       Well, the, the, the story, uh, basically, uh, we, uh, had a, an agreement with Jimmy Mac- Jimmy Connors' agent, uh, for him to wear Nike shoes, and he did. He wore them, um, at Wimbledon, and the agent said, "As soon as he gets back from Wimbledon, we'll get it signed." Well, he won Wimbledon.

    7. SPSpeaker17:58

       [laughs]

    8. PKPhil Knight17:59

       And as soon as he got back from Europe, well, he had summer matches, and then came the US Open, and he said, "As soon as we get done with the US Open, we'll get this contract signed." Well, he won the US Open.

    9. SPSpeaker18:08

       [laughs]

    10. PKPhil Knight18:09

        And then we got down to sign the contract and he says, "I don't remember it this way." That was Jimmy Connors' agent, not Jimmy Connors himself.

    11. SPSpeaker18:15

        [laughs]

    12. SPSpeaker18:15

        [laughs]

    13. PKPhil Knight18:15

        But that was the end of our endorsement with Jimmy Connors.

    14. SPSpeaker18:17

        [laughs]

    15. PKPhil Knight18:18

        And so, uh, the next year I think it was, that, uh, Wim- I went to Wimbledon, you know, looking for the next great hope. And there were a bunch of, uh, really good American, young Americans, 18 and under. I was looking at the 18 and unders, and they had Brian Gottfried, who was a great player, and Eliot Teltscher was a great player, and the, the head of USA Tennis was saying, "Those are really great endorsements. Stay away from that kid McEnroe. He's too much of a hothead. He's playing over on Court 14." I went right to Court 14.

    16. SPSpeaker18:45

        [laughs]

    17. SPSpeaker18:46

        [laughs]

    18. PKPhil Knight18:47

        And basically that week he was playing, uh, the number 16 player in the world, Phil Dent, and he's 18 years old, and he hits his first serve in, and the chalk flies up, and the line judge goes, "Out." McEnroe jumps over the net, puts his nose this far from the official, and he says, "Are you sure of that call? Are you very sure of that call?"

    19. SPSpeaker19:08

        Wow.

    20. PKPhil Knight19:08

        And I turned to the guys with us, "This kid's not afraid."

    21. SPSpeaker19:11

        [laughs]

    22. SPSpeaker19:11

        [laughs]

    23. PKPhil Knight19:12

        And, you know, I kind of became a fan, uh, of, uh, his intensity and his competitiveness and his attitude. He did, uh, lose control sometimes, but, um, that-

    24. SPSpeaker19:23

        [laughs]

    25. PKPhil Knight19:24

        Well, I always remember Frank Deford's write-up of him in, uh, in, uh, Sports Illustrated when he said... The big picture of McEnroe. He says, "Why isn't this man smiling?" He says, "Beethoven didn't smile much either."

    26. SPSpeaker19:35

        [laughs]

    27. SPSpeaker19:36

        That's fair.

    28. PKPhil Knight19:37

        Mm-hmm.

    29. SPSpeaker19:38

        A few years later, actually several years later, you decided to name the executive building at your headquarters in Oregon-

    30. PKPhil Knight19:43

        Mm-hmm
13. 20:04 – 22:26

    The Michael Jordan bet: distinctive product, “Banned in the NBA,” and a brand that outlasted playing days

    1. SPSpeaker20:04

       Now, let's fast-forward to 1984. You come across another decent basketball player. His name is, is Michael, Michael Jor- Jordan. Michael Jordan. That's it.

    2. SPSpeaker20:13

       [laughs]

    3. SPSpeaker20:14

       Um, now Nike were actually criticized at the time for overpaying for Jordan's signature.

    4. PKPhil Knight20:19

       Mm-hmm.

    5. SPSpeaker20:19

       But of course, with hindsight, he became more than an athlete. He became a two and a half billion dollar revenue brand for Nike. Beyond MJ's greatness, what was it that made that brand so successful and so dominant?

    6. PKPhil Knight20:35

       Yeah. It's, uh, it isn't something you can bottle. Uh, it's been, uh, you know, truly one of the, uh, unique experiences really in, in all of marketing that, uh, obviously, uh, he had it all, and, and we pretty much knew that coming in. I mean, he was player of the year. He was handsome. He could jump. And, uh, that he, uh, won the national championship with a winning shot. Uh, he had all of it. Uh, and uh, yeah, when we signed him, uh, we signed him for more than any rookie had been paid before. We signed him for $250,000 a year, and Fortune magazine ran a little insert, uh, and another article says, "There's no greater indication that Nike has lost its way than the fact that they paid Michael Jordan $250,000."

    7. SPSpeaker21:17

       [laughs]

    8. PKPhil Knight21:19

       And, uh, but, uh, that it's, uh, w- but we combined it with, um, uh, uh, what we thought was a really good shoe, a really distinctive shoe. It was red and black. It wasn't just white or black. And, uh, of course, he wore it to, uh, great, in great performances. And then we had the added benefit of David Stern banned it in the NBA, so we immediately combined it, what became a good ad, says, "Banned in the NBA," and every kid in the world wanted that.

    9. SPSpeaker21:45

       [laughs]

    10. PKPhil Knight21:46

        And, uh, that, uh, and it's, uh, it hasn't been straight uphill. It had a one year where our sales actually went down, but overall that was the, what we got together w- was really good advertising, which reflected his personality, which was strong. And, uh, it's been an unbelievable success that, uh, when he quit playing, uh, sales of Jordan brand product were $750 million, and this last fiscal year they topped $3 billion, and, uh, long after he'd quit playing. So as I said to many people, "Imagine how much we'd sell if he'd never played." [laughs]

    11. SPSpeaker22:20

        [laughs]

    12. SPSpeaker22:23

        [laughs]

    13. SPSpeaker22:24

        We can only dream.

    14. PKPhil Knight22:24

        [laughs]

14. 22:26 – 25:36

    Staying relevant: product pipeline, nontraditional advertising, and the Wieden+Kennedy partnership

    1. SPSpeaker22:26

       Phil, it's Nike's 55th anniversary next week, I believe.

    2. PKPhil Knight22:29

       Yeah.

    3. SPSpeaker22:30

       The company's at record revenue levels, and just last year Nike was voted alongside Apple as the favorite brand of millennials, and I think there's a few of us in here who might attest to that.

    4. PKPhil Knight22:42

       Mm-hmm.

    5. SPSpeaker22:43

       How does a brand stay so relevant to so many people for so long?

    6. PKPhil Knight22:48

       Well, y- it's, uh, it's hard work. Uh, I mean, you have to work at it all the time, but I think, you know, our thing obviously it, it starts with the product. The, the product is by far our most marketing, um, our most important marketing tool, and so we're constantly working to improve product. And so the kind of the recent upturn is because we've had, uh, a really good product pipeline. Um, probably the React running shoe is, uh, you know, number one on the list, but there have been a lot of others, and, uh, that, uh, so that's, that's been really important. And then, uh, you know, good advertising is, is, is critical to it, that, uh, you know, that, uh, the Wieden+Kennedy experience has been, uh, as, in many ways as dramatic as Nike's, and it's really been kind of alongside each other. When I first met Dan Wieden, uh, I walked into the door of his, quote, "office". He had, uh, three people besides himself sitting around a card table, and he said, "Welcome to Wieden+Kennedy." And I says, "Well, Dan, I just want you to know one thing, I hate advertising." And he looked at me and he says, "Well, this will be interesting." [laughs]

    7. SPSpeaker23:50

       [laughs]

    8. PKPhil Knight23:51

       And, uh, and it has been, but it, it is interesting that, you know, obviously if I would've said that to Procter&Gamble, I'd have been on... They'd take your 25 million, take your $25 advertising budget and go on out the door. But, uh, they were a small advertising firm, and, uh, he grew to understand that what I didn't mean was that I hated advertising. What I meant was I hate traditional advertising, and he found ways to find out who Nike is or who Michael Jordan was and project that to the consumer. And not only did Nike, uh, you know, succeed, Wieden+Kennedy now has offices all over the world, you know, over 1,000 employees. It has, uh, Coca-Cola as a client. It has Honda as a client. It has a lot of the world's most famous brands as clients. They've been an enormous success. And, uh, to this day they work really hard at, at trying to find out, you know, who it is and who the athlete is and how to, how to project them. I know we had, uh, Boris Becker, the great tennis player, as in we were trying to get him as an endorsement and Dan Widen was making the pitch and he says, "We will find out who you are and project that to the world." And Boris says, "How in the world can you know who I am when I don't know who I am?" [laughs]

    9. SPSpeaker25:04

       [laughs]

    10. PKPhil Knight25:05

        And, and Dan just says, "Well, we'll find out." Well, we didn't, we didn't make the sale. He didn't, we didn't get the sal-

    11. SPSpeaker25:11

        [laughs]

    12. PKPhil Knight25:11

        We didn't sell him. But, um, but that is one of the things they've done. So the advertising and the product are, are two of the, uh, two of the really important things. And then keeping the product fresh and keeping the advertising fresh, and it's an ongoing challenge. And, uh, we don't always hit it. You know, a couple years ago we took a little dip, and, uh, it's a very, very competitive business. And, uh, and every six months is kind of a new life and everybody has to be aware of that.

15. 25:36 – 28:28

    Leadership as an introvert: listening, rejecting autocracy, and arguing for collaborative leadership

    1. SPSpeaker25:36

       Phil, this is a school and a speakers series dedicated to leadership, so we wanna make sure we, we touch on that topic. Something the MBA 1 class is challenged with each year is why would someone follow you? I think there can be a stereotype of what a CEO should be. Sometimes we think of them as a natural extrovert. Around the valley sometimes they can be hero-like characters. You've described yourself as shy, introverted, someone who identifies with the born loser. How were those-

    2. SPSpeaker26:06

       [laughs]

    3. SPSpeaker26:08

       That's why, that's why we get him.

    4. PKPhil Knight26:09

       Not necessarily that. [laughs]

    5. SPSpeaker26:11

       But, but how have those traits helped you as you built Nike?

    6. PKPhil Knight26:14

       Well, I think, you know, I mean obviously, uh, introvertal, introverted people have a tendency to listen, which I think, uh, good leaders do. But when I was in school, that, uh, you know, they talked about two different types of leadership. They talked about autocratic leadership and, and democratic leadership. And, you know, it was only, uh, 15 years after World War II, and, you know, they had, uh, two of the great autocratic leaders ever in Douglas MacArthur and George Patton. And, uh, they at the time looked, were looked on as being very successful. That, uh, then you have a democratic style leadership, which is, uh, the, you know, the thing is, is g- getting people involved and, and talking to people. And, um, that, uh ... So I think, uh, for ... It, it's probably almost impossible for a, a- an introvert to be an autocratic leader. Uh, but an introvert can be a democratic leader. And as the, the idea of democratic leadership progressed, says they, the, they started to talk, use the term collaborative leadership, which is really in my view the ultimate and only kind of leadership to this day. That in this day and age the autocratic leader doesn't work. It, it can work for temporarily, but it won't work long run. And I hope that the people in this, in this auditorium today don't get the idea that hero leadership means being autocratic.

    7. SPSpeaker27:33

       [laughs]

    8. PKPhil Knight27:33

       And you know that, uh, I mean ob- obviously I think, uh, Steve Jobs is looked at as really kind of in this area one of, in the whole world really as being one of the great leaders, which I believe he was. But I do believe at the end of his career he was beginning to modify his, you know, natural autocratic style, which if you will got him fired his first tour around, uh, uh, Apple. And as he, he got to go through Apple a second time, there was a change in Steve Jobs, and, uh, you noticed that from the commencement speech he gave to, uh, to Stanford University. And, and he hired Tim Cook, and he had a lot of give and take with Tim Cook, and Tim Cook, uh, who I know quite well, is very much a collaborative leader and, and I believe a great collaborative leader. So I, I think that y- it, it just ... Don't, don't equate hero leadership with autocratic leadership. The only ty- style of leadership that will work in this day and age, uh, is, is collaborative leadership.

16. 28:28 – 33:08

    Communication styles, political correctness, and confronting the sweatshop crisis: from denial to transparency and standards

    1. SPSpeaker28:28

       Now Phil, another thing you may know about this group is that we're pretty touchy feely bunch these days.

    2. PKPhil Knight28:34

       Mm-hmm.

    3. SPSpeaker28:34

       Uh, of course in your book you've described business as war without bullets.

    4. PKPhil Knight28:38

       Yeah.

    5. SPSpeaker28:39

       So as you look back on those early days at Nike dealing with those crises, were soft skills tools an entrepreneur like you could really afford back then?

    6. PKPhil Knight28:49

       What type of, what type of skills are you talking about?

    7. SPSpeaker28:52

       The softer skills, the touchy feely skills.

    8. PKPhil Knight28:54

       Oh, I think, yeah, I mean I, [laughs] yeah, I, I think that, um ... I, if you read the book Shoe Dog, obviously I don't come across as a touchy feely type, [laughs] and neither were any of those, uh, top five. But there's lots of different ways of communicating. And, uh, I, one of the things I don't like about the politically correct movement is that, uh, to me politically correct has been, is founded by people that couldn't communicate, and they don't want you to communicate very well either. Because communication's really is a kind of an individual thing. Everybody's a little bit different. It's like people are, have different fingerprints, they have different personalities, they have different emotions. And I think the leader's job is to know who his team is, and there's different ways to communicate with that team. We weren't touchy feely in the sense that we were always patting each other back and say how we feel, but you could say, "How you doing today, you son of a bitch?" and it'd mean the same thing.

    9. SPSpeaker29:52

       [laughs]

    10. PKPhil Knight29:52

        And, and, uh, so, uh, there's just different ways, the, the different ways to, to, to do, to do like, to do that.

    11. SPSpeaker30:01

        I think we need to bring that into the chatter on campus these days.

    12. SPSpeaker30:04

        [laughs]

    13. PKPhil Knight30:05

        [laughs]

    14. SPSpeaker30:07

        Now Phil, we, we also study a lot here how leaders act in times of crisis.

    15. PKPhil Knight30:12

        Mm-hmm.

    16. SPSpeaker30:12

        Nike and yourself have dealt with several. Today the Nike brand is stronger than ever, but of course in the late '90s Nike did for some time become synonymous with sweatshops-

    17. PKPhil Knight30:23

        Mm-hmm

    18. SPSpeaker30:23

        ... and slave wages. As you look back, how do you feel you handled that crisis, what would you do differently, and what are you most proud of?

    19. PKPhil Knight30:33

        Well, the, uh, um, one of the things that, uh, that we didn't talk about in business school when I was here was the media. And, uh, so I think probably this group is probably much more aware of the media. But, uh, it's, it's always there. It's more prevalent than it's ever been, and they're not always consumed by facts. Uh, that, um ... And so when the, when the first charges came that Nike, uh, runs sweatshops, that, um, you know, the, it, it's a, it's a really, uh, seductive argument to say this person only makes $4 a day, and Michael Jordan makes, uh, you know, $30 million a year, and Phil Knight's worth $2 billion, and, uh, and isn't this awful? And, uh, but, uh, our initial reaction was that, uh, we don't run sweatshops, and, uh, that, uh, you're wrong. And, uh, I was the CEO at the time, and that was my strategy, and it was awful.

    20. SPSpeaker31:40

        [laughs]

    21. PKPhil Knight31:41

        It, it didn't work. And so we kind of, uh, after about a year of that [laughs] , uh, it became clear. And so we took another tack which says, "Yeah, you can, you can criticize it once, but this is what we're gonna be, and this is how we're gonna be a better company over the next 10 years, and we're gonna take these steps each year. And you come look at any of our factories anywhere in the world that you want." And we've kind of been on that path ever since, and that's basically working. And I do think, uh, you know, that, uh, we have had lots of good comments that don't get much publicity from the media. And, uh, you know, one of the good ones was a, a member of the United Nations says Nike's the gold standard for all apparel companies on how they run their, run their factories. And, uh, it's a constant battle though because we're always kind of looking for new factories or changing factories. And, uh, we have ... Most of our, our shoe factories and our good apparel factories have been with us for 20 or 25 years. But economics change at different times, so you do change some of them on the periphery. So it's a constant battle to live up to the standards we have. But w- we have a whole team at Nike that does that all the time and basically is talking to people on the production line all the time. And I do think that, uh, our factories are the best in the world right now for conditions. And, and it's, it's a basic truth that great shoes are made by great factories. You don't want a, you know, a, a, a, you know, a bad factory making your, your, the best shoes in the world.

17. 33:08 – 36:12

    Passion plus a niche—and a playful lightning round to close

    1. SPSpeaker33:08

       Now Phil, something else we hear a lot from the media but also occasionally at Stanford is to find and follow your passion. And you are perhaps the example of someone who built a business dedicated to something they love, which is sports and athletes. There's many of us in the room today who I feel are struggling to maybe tie our true passions to a viable business or career. What would you say to people like us?

    2. PKPhil Knight33:35

       Well, I think, you know, that one thing that is left out is that you gotta have a niche. You gotta have a reason to succeed. My reason that was that, you know, Japan could make, uh, shoes economically, and, uh, that, uh ... But, uh, then the rest of it, you know, fit right in home base for me. So and, and I, and I do think if you're gonna be an entrepreneur, it has to be something that you really love because there will be a lot of dark days. And as I say, we never hesitated in those bar- dark days. So I, I was fortunate enough to find what I thought was a niche to go with my passion, and that's, that's what you need to bring those two things together. But when you do, you're very, very fortunate, and take advantage of it.

    3. SPSpeaker34:18

       All right. Well look, Phil, this has been brilliant thus far. I know Nike say there is no finish line. We do need to finish in about 15 minutes. Phil, this has been brilliant. We're almost gonna let you go. Not quite yet.

    4. PKPhil Knight34:29

       All right.

    5. SPSpeaker34:29

       There's a little tradition we like to do up here on stage we call the lightning round.

    6. PKPhil Knight34:33

       Mm-hmm.

    7. SPSpeaker34:34

       So the idea is I'm gonna ask you a set of either/or questions. We want you to answer the one answer that comes first in your mind, okay?

    8. PKPhil Knight34:42

       You didn't warn me about this.

    9. SPSpeaker34:43

       [laughs]

    10. SPSpeaker34:45

        You didn't tell me you were gonna mention me, Mom.

    11. PKPhil Knight34:46

        I might get back to her.

    12. SPSpeaker34:48

        [laughs]

    13. SPSpeaker34:48

        [laughs] All right, look, because it's a new thing, we're gonna start easy, and then we'll get harder, okay? So Jordan or LeBron?

    14. SPSpeaker34:57

        [laughs]

    15. PKPhil Knight34:58

        No.

    16. SPSpeaker34:58

        [laughs] [claps]

    17. PKPhil Knight35:03

        You know, that's like asking which of your kids do you like better.

    18. SPSpeaker35:06

        [laughs]

    19. SPSpeaker35:07

        Okay. You, you can tell me backstage. It's fine.

    20. SPSpeaker35:09

        [laughs]

    21. SPSpeaker35:10

        Um, Rose Bowl or Super Bowl?

    22. PKPhil Knight35:13

        Rose Bowl.

    23. SPSpeaker35:14

        340 mile or two-hour marathon?

    24. PKPhil Knight35:21

        Two-hour marathon.

    25. SPSpeaker35:22

        Nice. Suit or tracksuit?

    26. PKPhil Knight35:24

        Oh, man. Tracksuit.

    27. SPSpeaker35:26

        [laughs]

    28. SPSpeaker35:28

        Just do it or dream crazy?

    29. PKPhil Knight35:30

        Just do it.

    30. SPSpeaker35:32

        Hawaii or Palm Springs?

Episode duration: 36:52