What companies can learn from the troubled tenure of Nike’s former CEO

Nike’s in trouble.

The footwear giant has cut revenue forecasts twice in the last year, and lost valuable market share to competitors. Those struggles, along with many others, are likely why the company announced last month that CEO John Donahoe would step down.

Donahue was a former Bain management consultant and served as the CEO of eBay. His ascendance at Nikei promised to bring tech-savvy to the company at a time when it was trying to sell directly to consumers. But by putting him in charge of the company, my colleague Phil Wahba writes that the corporate board forgot something critical: The CEO of any company should be focused—and knowledgeable—about the core business.

Despite his previous business experience, Donahoe wasn’t totally immersed in sneaker culture.? That may be why he made some key mistakes: Underestimating the importance of retail partners, and failing to make sure that the company was constantly innovating new design ideas. Nike’s issues allowed rivals like Hoka and New Balance to gain a foothold in a competitive market, which they may very well hold onto for quite some time.?

The last 12 months have been brutal for the apparel company. Nike slashed its revenue forecast for the first time in December of 2023, after which Donahoe announced a $2 billion cost-cutting plan that included layoffs. The company cut its revenue forecast again in June of this year. The downward spiral is likely why the company appointed a new CEO to replace Donahoe.?

Elliot Hill will be coming out of retirement to take on the role. He will be returning to the company where he’s spent decades, starting as an intern and working his way up to various leadership positions. That means that, unlike his predecessor, he’s very familiar with sneakers. You can read more about Nike’s latest leadership troubles here .?

Leadership Tip of the Week ??

The climb up the corporate ladder is less straightforward than it used to be. That’s according to LinkedIn’s chief economic opportunity officer, Aneesh Raman, who told my colleague Emma Burleigh that the path to the C-suite looks a lot more “squiggly” than it has in years past.??

Leadership Next

Demand for in-person jobs is way up, while remote jobs are slowly dwindling, says Indeed CEO Chris Hymas.

On this week's episode of #LeadershipNext , Hyams talks about return-to-office, AI, and how being a drug and alcohol counselor earlier in his career gave him an advantage in the corporate world.

Listen to the episode and subscribe to Leadership Next wherever you listen to podcasts, or read the full transcript here.

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-Azure Gilman , Fortune’s Deputy Leadership Editor