How Consultants Almost Destroyed Nike’s Brand

On June 28, 2024, Nike faced the largest stock price collapse in its history. A single day wiped out $25 billion or 32% of its market value. Despite claims from trolling publications that the drop stemmed from “woke antics,” the true culprit was far less sensational: an overreliance on data-driven leadership.

In business, certainty is often sought. The equation is simple: “If I invest X, I’ll achieve Y.” But Nike, a company whose brand is its lifeblood, doesn’t operate within this tidy formula.

Creative branding thrives on associations and empathy—intangibles that are difficult to quantify yet generate immense value. At Nike, these intangibles are worth billions. But because branding lacks a neatly predefined ROI, consultants, who are eager to distill human experiences into numbers, often miss its true worth.

The Consultants Take Over

John Donahoe became CEO of the world’s second most valuable apparel brand in 2020. Before this role, Donahoe spent 23 years at Bain & Company, one of the world’s most prestigious consulting firms.

His leadership, often described as data-driven, marked a dramatic shift for the company.

According to Nike’s former marketing director, Massimo Giunco, the new leadership team initiated a significant restructuring based on three seemingly reasonable but ultimately disastrous decisions:

1. “Streamlining the organization.” Consultants advised a restructuring that led to the departure of hundreds of experts. This mass exodus eroded tacit knowledge and slowed product innovation. They also dismantled Nike’s traditional product categories (running, basketball, soccer) in favor of a generic segmentation: men’s, women’s, and children’s. The idea was to drive sales with data rather than category-specific expertise.
2. “Customer-centric transformation.” Nike adopted a Direct-to-Consumer (DTC) model, focusing marketing efforts on driving customers to Nike.com rather than relying on retailers. Long-standing partners like Macy’s and Foot Locker were dropped, creating shelf space for competitors. Initially, the changes appeared successful, particularly during the pandemic when e-commerce boomed. However, customers proved less loyal than expected. If Nike wasn’t available at the local shoe store, customers simply bought the next best thing. While DTC offered greater control and higher margins, it also reduced brand accessibility and exposed Nike to greater risks in shifting market conditions.
3. “Data-driven digital marketing.” Replacing inspiring and memorable brand campaigns with tactical sales-driven messages weakened the emotional connection consumers had with the brand. The old strategy was to dominate every touchpoint; the new focus on e-commerce created opportunities for specialized competitors like Tracksmith to better address the needs of passionate athletes. Major rivals like Adidas had already learned from neglecting their brands. Nike could no longer rely on its branding to sell $200 sneakers. Instead, mounting inventory and relentless discounting eroded the brand’s value.

Just Measure It

The pursuit of short-term profits and cost optimization couldn’t compensate for the damage done to Nike’s brand.

Product development faltered because data alone doesn’t create demand; innovation does. It’s about introducing consumers to something they didn’t even know they needed.

Most importantly, the big, inspiring brand campaigns dwindled. It had been six years since the iconic Dream Crazy campaign. Nike had become cheap and stale.

Back to Basics

Brand visibility and salience in consumers’ minds are critical success factors.

Donahoe lacked deep knowledge of sneaker culture or retail experience, leading to disaster. As a former management consultant, his best strategy was cost-cutting, which only worsened Nike’s problems.

Nike has finally recognized its mistakes. Its new CEO, Elliot Hill, who started as an intern at Nike in 1988, took over in October. His deep understanding of the organization—evident in his now-viral LinkedIn résumé—has already made a difference.

A return to Nike’s bold and vibrant roots was evident in its 2024 Paris Olympics campaign, “Winning Isn’t for Everyone / Am I a Bad Person.” But rebuilding brand equity takes time.

Lessons for Marketers

The Nike saga offers a clear takeaway: be cautious about over-relying on management consultants.

Their processes may be analytical and data-driven, but they often fail to understand the importance of branding and marketing until it translates into sales.

Just because something isn’t precisely measurable doesn’t mean it doesn’t exist. It could be the most significant driver of growth. Just look at the numbers.

Erik Mashkilleyson

This story was originally published in MRKTNG magazine January 14, 2025.

The author is the Strategy & AI Director at Avidly , specializing in international branding, digital service design, AI and sustainable business.