In early September, Nike made a surprising and bold move: It made Colin Kaepernick, the controversial former NFL player whose decision to kneel during the National Anthem bitterly divided people, the face of its 30th anniversary “Just Do It” ad campaign.
In embracing Kaepernick, Nike took a big gamble. While its popularity may have taken a hit, with favorability ratings dropping from 76% in early September, to 60%, by September 21st its stock reached an all-time high continuing a year-long trend. Shares have dropped 15.7% since the high or 9.4% since the ad campaign began.
It’s not that Nike suddenly decided to champion the cause that Kaepernick sought to bring attention to – police brutality against people of color. In fact, the company simply made a calculated financial decision.
While I’ve addressed corporate social responsibility before, an APCO survey showed that around 95% of people believe companies have the ability to create a better society and 90% expect companies to be involved in taking on societal issues, with 71% saying it’s acceptable for companies to take stands on social issues. Spending $4 billion a year in marketing and advertising, the sports apparel maker certainly knows its consumers.
Regardless of your opinion on Kaepernick, Nike not only gained a great deal of media attention but managed to bury another, much more damaging corporate reputational story: the accusations of sexual harassment and gender discrimination at Nike against its executives that came out in August.
How many now recall Nike was slapped with a federal lawsuit by multiple former female employees who alleged a hostile work environment in which grave pay disparities existed, men were promoted at higher rates for the same level of work, and reports of sexual harassment were mishandled and ignored by the human resources department.
It must be said that these are not the first less-than-rave reviews of Nike workplaces. The corporate giant has been long accused of running sweatshops overseas, which became painfully obvious after the catastrophic collapse of a Nike factory in Bangladesh several years ago.
From human rights violations, the use of child labor and unsafe, and widespread, decades-long public outrage over sweatshop conditions, the company has spent mightily to rebrand itself as an environmentally-friendly, socially conscious company.
The New York Times initially reported that an internal survey of female employees found its way to chief executive Mark Parker and lead to the resignation of several of top-level employees, such as the President and Vice President of the Nike brand. The class action lawsuit had the potential to pose a significant PR earthquake and yet, it has since been largely ignored in favor of the Kaepernick story.
Its recent campaign has shifted attention away from a potentially very damaging narrative that might otherwise have receive a lot of oxygen in the wake of the #MeToo movement.
The diversion – supposedly a brainchild of Nike’s head of communications – worked!
So, while the brand will need to take future action to smooth over its name with the clearly angered veteran community, in the initial short term their gamble paid off.
One influential communications team leader at Nike rolled the dice and moved to utilize a brand ambassador who has been under contract since 2011. With the story of gender discrimination and sexual harassment muffled so far, its actions have produced tangible results.