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Nike Boss Says Remote Work Is Barrier To Innovation

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Nike CEO John Donahoe said remote work, particularly during the pandemic, has led to a slowdown in innovation.

Speaking to CNBC's Sara Eisen in Paris, Donahoe discussed the noticeable absence of fresh, disruptive products in Nike's lineup, which has concerned investors.

Mr Donahoe said: “What’s been missing is the kind of bold, disruptive innovation that Nike’s known for and when we look back, the reasons are fairly straightforward.”

He noted footwear factories in Vietnam were forced to close during the pandemic but said “even more importantly,” Nike staff worked from home for 2.5 years.

Donahoe said: “In hindsight, it turns out, it’s really hard to do bold, disruptive innovation, to develop a boldly disruptive shoe on Zoom.

“Our teams came back together 18 months ago in person, and we recognize this. 

“So we realigned our company, and over the last year we have been ruthlessly focused on rebuilding our disruptive innovation pipeline along with our iterative innovation pipeline.” 

Since then, Nike has undergone a realignment to revitalize its disruptive and iterative innovation pipelines. 

"It’s really hard to do bold, disruptive innovation, to develop a boldly disruptive shoe on Zoom"

He said the company's innovation “is as strong as ever,” with expectations set for new product launches each season and the fresh storytelling that the brand is celebrated for.

Analysts and investors have criticized the company for its waning innovation and declining market share relative to rising competitors such as On Running and Hoka. 

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These brands have rapidly gained popularity, particularly among a new generation of runners.

In response to these challenges, Nike announced a broad restructuring plan last December to cut costs by around $2 billion over the next three years. 

This plan includes a two percent workforce reduction, or over 1,500 job cuts, to better focus on growth sectors like running, women's categories, and the Jordan brand.

Donahoe said Nike is still “gaining share” and has a dominant position in the market.

He said: “We’ve done more to advance running than any brand in the world over the last 50 years and we continue to lead with elite runners.

“Innovation has always been what’s marked Nike in running, as in other categories and so we’re not just going to copy what other people do, we’re gonna bring innovation.”

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