Nike’s Culture Upheaval Demonstrates the Power of Employee-Led D&I

Nike’s Culture Upheaval Demonstrates the Power of Employee-Led D&I

Since March, Nike has been conducting a massive overhaul of its company culture, executive leadership, and HR practices after a covert survey of female employees revealed widespread patterns of sexual harassment, discrimination, and hostile work environments for women. As the New York Times recently reported in a major story reviewing the upheaval, this toxic culture was driving talented women out the door. In recent months, several high-level male executives at Nike have left the company amid the scandal.

Some of these executives stand accused of engaging in sexist practices themselves; others do not, but have been faulted for failing to address employees’ concerns, creating the perception of an executive “boys’ club” in which male managers were protected from consequences for their misbehavior. Another key theme in the Times‘ report is the Nike women’s dissatisfaction with the response they received from HR.

Nike CEO Mark Parker has moved quickly to bring the situation under control and assure employees that the company is taking its culture problems seriously. At an all-company meeting last Thursday, Parker admitted that he and other executives had missed signs of the problems that have come to light recently, apologized to the affected employees, and promised a thorough investigation into their complaints, along with changes to the company’s training and compensation practices to make them more inclusive, particularly toward women.

While Parker and his executive team will be responsible for making these needed changes to Nike’s culture and practices, none of these changes would be possible without the women employees who took the initiative to bring the company’s problems to light. One important takeaway from this story, therefore, is the power and promise of employee-led D&I initiatives.

We hear you need top-down. We hear HR needs to lead. And they do. But employees can also lead change through bottom-up initiatives like employee resource groups. ERGs often get a bad rap, with employees or executives assuming that the ERG is little more than an email list for arranging social events. ERG leaders need to work against such dated stereotypes — these groups can provide critical perspective and enormous value.

In our research on enterprise change at CEB, now Gartner, we have found that an open-source model steered in part by employees is an effective formula for real and sustainable change. D&I is a form of change: We’re looking for a different outcome, and Nike is by no means alone among organizations in needing major culture and process changes to become more inclusive. (CEB Corporate Leadership Council members can read our Open Source Change study here.)

When employees push D&I initiatives and align their objectives with the business, they can truly lead change and make a big difference for their organization. The women at Nike have done just that, and shareholders should be very thankful that they were able to put their voices together and share them in a way that will improve Nike’s business in the long term. We suggest that ERG leaders who are looking to lead change become a “voice in the room” and make sure executives’ blind spots don’t hold underrepresented talent back.

Having that voice in the room doesn’t just help in developing more diversity-conscious HR policies; it can be valuable in making a wide variety of business decisions. Nike’s culture problems, for example, also led to marketing decisions that alienated women customers, like an ad campaign featuring a stripper and male athletes in sports bras, which the company ultimately had to kill at great expense. If executives had solicited feedback on that campaign from a women’s ERG, these employees could have provided perspective on how that ad would be received among female customers and helped come up with ideas for fixing it. Organizations that have leveraged their ERGs in this way have gained ground with diverse customer demographics. In these and other situations, employees can be the leaders organizations need to succeed.