Thursday, May 30, 2019

General Patton on decentralization (and Nike)

Don't tell people how to do things, tell them what to do and let them surprise you with their results. 
--George S. Patton

One of Nike founder CEO Phil Knight's favorite management maxims.  From his well-written and fascinating autobiography, Shoe Dog.

Reading the book makes me realize how Nike's success was driven more by belief in a higher cause or purpose than a concern for making money.

 The villains in the book were those erecting regulatory barriers to success, like Converse and Keds, domestic firms who manipulated customs laws to raise Nike's costs of importing.  Only when Nike hired people familiar with how Washington works (who filed an antitrust counter claim), were they able to resolve their claim. 

For Nike, this kind of "rent seeking" seemed like both a prisoners' dilemma (Nike's optimal response was to do something similar as Keds and Converse), and a tax on innovative activity (it would up diverting Nike's attention from their primary business of designing, producing and importing shoes).

No comments:

Post a Comment