Randy L. Rasmussen | The Oregonian/OregonLive/2015

Nike co-founder Phil Knight (left) takes the stage during a 2015 shareholders meeting in Beaverton. Trevor Edwards (second from right), the onetime heir apparent to CEO Mark Parker (right), was among 11 swept out in an executive shakeup this year.

Jeff Manning | The Oregonian/OregonLive



The threats, she remembers, came via text, email, telephone and face to face.



Paige Azavedo's job in the digital marketing department at Nike put her in daily contact with Danny Tawiah, a demanding and mercurial boss who she said routinely browbeat employees, sometimes to tears.



"You better get it together or you're gone," Azavedo said he told her in a room full of co-workers.



Azavedo finally quit in 2015 after getting a job offer with a Seattle technology company. She didn't want to leave Portland and uproot her family. "But he'd given me no choice," she said.



She moved on, and Tawiah moved up. Within two years, he was promoted to vice president.



But then came 2018, a year like no other in Nike's history. The company cut ties with Tawiah and 10 other senior managers amid complaints about a "boys' club" culture. Behind one of the world's biggest brands, behind the beautiful campus and the glamorous athletes, an ugliness was sapping morale and driving talented employees, particularly women, out the door. A survey started circulating that aimed to quantify what some saw as the prevalence of gender bias and sexual harassment.



Azavedo felt vindicated. Tawiah was shattered. The first of the departed Nike executives to go public, Tawiah told The Oregonian/OregonLive the accusations against him are false. He worked for the company for 12 years in various digital marketing roles and contributed to Nike's multibillion-dollar growth.



"My role was to inspire and develop under-performing teams, and through that pursuit there were times I had to make difficult decisions," he said. "Unfortunately, those decisions at times were not agreeable to everyone."



But he adds emphatically: "I have never bullied anyone -- neither directly or indirectly, male or female."



The purge has been widely portrayed as Nike's #MeToo moment: when a cadre of dissident female employees finally shamed the company into action. But that's only partially true. The dismissals also represented a dramatic boardroom power play engineered by CEO Mark Parker and company co-founder Phil Knight, insiders say.



When management was confronted over its workplace culture, the company moved quickly against Nike President Trevor Edwards, who until that moment had been the odds-on favorite to succeed Parker as chief executive. It then went after his team. More than half of the 11 managers who've since lost their jobs, Tawiah among them, were high-level Edwards allies. This was a surgical removal of a discredited senior executive and his team more than it was a broad house cleaning of misbehaving managers, observers say.



In hopes of shedding new light on the dramatic changes at Nike, The Oregonian/OregonLive has interviewed dozens of current and former Nike employees. Most of those who agreed to talk insisted they not be identified for fear of retribution, because of severance agreements or because they still work in the industry.



Nike declined requests to interview Parker and Knight. "We've confirmed that a limited number of employees, among Nike's 74,000 employees around the world, are no longer with the company," spokesman Greg Rossiter said in a written statement. "We don't have anything more to share on that."



Some say the company hasn't gone far enough.



"If they were really serious, there would be more than 11 (ousted executives)," said one former manager, who did not want to be identified because her current employer does some work for Nike. "With Trevor, they have cut the head off the snake. But there are … other snakes."

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Mark Graves | The Oregonian/OregonLive/2014

As Nike's top marketing officer, Trevor Edwards (left) had immense clout. He controlled a $3.34 billion budget that included advertising, marketing and endorsement contracts.

THE EUROPEAN MAFIA



Edwards' departure marks a tectonic shift in Nike's power structure.



In the past decade, no single executive had more impact or created more controversy.



Edwards joined Nike in 1992 from the consumer products giant Colgate-Palmolive. A Brit who was raised in Jamaica, he speaks with a disarming Caribbean lilt.



As the company's top marketing officer, Edwards had immense clout. He controlled a global "demand creation" budget of $3.34 billion that included advertising, marketing and endorsement contracts. He recruited his own team of Dutch, French, Swedish and British managers, tapping many of his former colleagues at Nike's European headquarters, over the course of a decade.



Eunan McLaughlin saw Edwards' ascent from the inside. The Irishman was among a cluster of ambitious, talented managers who had worked with Edwards at Nike's European operations and followed him to the U.S.



"I rose up with Trevor, like a lot of us," McLaughlin said. "They called us the 'European mafia.'"



The continental invasion was jarring to those not in the club. Americans joked that they lacked the proper accent to get promoted. In McLaughlin's view, though, the company badly needed the jolt. "We brought a global perspective to things," he said. "You had a lot of people at Nike who had never worked anywhere but Beaverton. Their vision of the world was inside the berm."



But Edwards and his team had an autocratic streak that seemed out of touch with the Nike way. "The culture changed in about 30 seconds," one longtime Nike executive said. "Suddenly everything had to get the blessing of the senior guys. It became very authoritarian."



Old alliances and time-tested relationships meant little to Edwards. One of his first moves as chief marketing officer was to lessen Nike's dependence on Wieden+Kennedy, the famed Portland ad agency credited with coining, "Just Do It." In 2006, he shifted Nike's running business to Crispin Porter Bogusky, a rival agency in Boulder, Colorado.



Dan Wieden knew he needed to reboot the relationship and staged an extraordinary gesture to try to win Edwards over. The agency brought an enormous bed into its Pearl District headquarters and covered it with a handmade patchwork quilt festooned with images of famous Nike ads created by the agency.



"I just knew that Trevor was the man and that it was a good idea to get Dan and Trevor on the same bed because things weren't going well," said Jeff Williams, a veteran agency creative director who came up with the plan. "It was just a cockamamie idea to help the relationship and it worked."



It did work to a degree. Edwards good naturedly got in bed with Wieden and discussed Nike's needs while the entire agency watched. Shortly thereafter, Nike gave its running account back to Wieden. But Edwards insisted on further diversifying Nike's portfolio of agencies, and tensions persisted.



The rift and uneasy détente helped build Edwards' reputation as a resident tough guy. But the harsh treatment of an agency that had been so crucial to Nike's success did not sit well with many people inside the company, including Knight.



You couldn't argue with the numbers, however. The company was enjoying unprecedented gains.

Already the industry leader, Nike managed to double its annual sales between 2008 to 2017, to $34.4 billion.



That kind of performance allowed Edwards and his team to further consolidate power. In 2013, Nike named him president, the company's No. 2 executive and the historical stepping stone to the CEO's office.



It was disheartening news to many of the old guard. Early Nike executives were famous for meetings filled with invective and insults but that also encouraged a free exchange of ideas. Edwards tolerated no dissent.



"Trevor is one of the smartest brand people I've ever met," said a former executive of one of Nike's affiliate companies. "At the same time, he can be a complete jerk. He demanded obedience."



Critics said Edwards empowered his team to behave the same way. "In any company, there is always going to be a team of leaders who bond together," the executive said. "Here it got very dysfunctional."



Some longtime employees said it felt, at times, as though the company was in the grips of civil war. They hoped Parker would recognize the morale problems and do something about it. But he didn't, they said, and Edwards continued to build his empire.



"They rewarded these toadies and ran off the old-school Nike people," said one company lifer. "Those of us who remained began referring to ourselves as the resistance. I am a proud member."

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Beth Nakamura | The Oregonian/OregonLive

Nike is in the midst of a massive expansion of its Beaverton headquarters. But after the sneaker giant saw sales cool, it shed 1,400 jobs in summer 2017.

MOMENTUM SLOWS

Edwards' upward mobility became a little less certain when Nike's sales cooled in 2016 and 2017. The drop-off was most palpable in North America, where it lost market share to a resurgent Adidas.



The company laid off about 1,400 in the summer of 2017.



Nike's board of directors wanted top brass to explain how it allowed the company' market position to erode. And, by some accounts, they weren't satisfied with Edwards' responses.



Edwards had diversified beyond traditional sports marketing to drive demand. He pushed the company to leverage social media and collaborate with artists, designers, pop stars. But for Nike traditionalists, it felt like a retreat from mainstream sports. And those were fighting words.



The internal disagreements were illustrated in the company's arrangement with British pop star FKA Twigs. She was given broad leeway to direct two television ads. They were striking spots, full of hip hop dance moves, fantastical outfits and facial tattoos, with a voiceover from Twigs herself.



The story among Nike's rank-and-file is that Knight so despised the campaign that he managed to kill it last summer with a reminder that the company is about sports and athletes.



Nike says that's not true. "Your previous reporting on our partnership with FKA Twigs is inaccurate," the company said. "We create a wide array of material and not all of it is ultimately brought to life in the marketplace. Twigs is a highly gifted artist and athlete for whom we have deep respect and admiration. We are proud to have worked together and we remain grateful for her inspiration and partnership."



But the fact remains the campaign was cut short. There was no outward sign that Edwards was in jeopardy. But the Nike universe had shifted.

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Bruce Ely | The Oregonian/OregonLive/2015

Nike CEO Mark Parker never appeared to be at risk despite the purge of 11 top-level executives and "serious" morale problems. “It all happened on Parker’s watch," one analyst notes. "And yet, he escapes unscathed, he even gets a contract extension.”

A QUIET REVOLT

In 1992, Helen Rockey made a bold proposal to her bosses at Nike.



After helping engineer Nike's purchase of Sports Specialties, a maker of hats and other merchandise emblazoned with professional team logos, she asked to run the company.



"'Unfortunately, no,' she recalls then-President Dick Donahue telling her. "'We don't think the professional sports leagues will want to work with a female.'"



Rockey sat there stunned. She knew almost immediately this was her signal to leave Nike. Within the month, she'd been hired as CEO of Brooks Running Co. From there she went on to a long, successful career managing other footwear and apparel companies.



"In my day, we always knew that the boys made more money (and got more equity) than the girls," Rockey said. "But that was OK, I learned how to create value and make money.



"I've enjoyed a career of CEO jobs in the industry thanks to lessons learned the hard way," she added. "But that doesn't make it right. "



Twenty-five years later, a new generation of employees felt it was time Nike learned some lessons the hard way. A group of women middle managers secretly mobilized, determined to persuade the men who dominated the executive suite that the company had a serious problem.



They were led by, among others, Kerri Hoyt-Pack, Nikki Neuburger and Melanie Strong, three respected managers. All three declined to comment.



By some accounts, the women were motivated in part by an April 4, 2017, memo from Nike human resources proclaiming Nike had effectively attained complete pay equity, on both gender and race.



The memo rang false with some employees. As first reported in The Wall Street Journal and The New York Times, they decided to do their own research. They circulated a survey to female employees asking about workplace conditions and opportunity. They presented their findings to Parker on March 6.



The reaction was explosive.



Parker announced March 15 that Edwards was out and would retire officially in August. A day later, the company confirmed that Jayme Martin, Edwards' senior lieutenant, would leave immediately.



Others followed, with Edwards' loyalists taking a disproportionate hit. Simon Pestridge, Steve Lesnard, Greg Thompson and Tawiah all left the company.



Team Edwards had been gutted.



Nike declined to explain the forced departures. In fact, Parker thanked Edwards for his years of service and agreed to keep him on until August. Parker did acknowledge at the time that there had been reports of "behavior occurring within our organization that do not reflect our core values of inclusivity, respect and empowerment."



A company spokesman later told The New York Times that the problems were restricted to "an insular group of high-level managers" who "protected each other and looked the other way."



The view of most Nike insiders interviewed for this report is that Edwards was already on thin ice with Knight and Parker due to the 2016-2017 business setbacks and their differences over marketing. Knight and Parker may have also realized how polarizing Edwards had become, they said.



Parker's job seemed never to have been seriously at risk, most sources said.



"You've gotten rid of your No. 2 and 10 other vice-president level managers, you've got morale problems serious enough that you publicly apologize to your employees," said Brian Yarbrough, an analyst with Edwards Jones. "Until this last quarter, the numbers weren't that good. It all happened on Parker's watch. And yet, he escapes unscathed, he even gets a contract extension."

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Screenshot

Nike set up a hotline and website for employees to submit complaints. It is believed that dozens were filed, though Nike refused to disclose the actual number.

THE DEPARTED



Nike's handling of its managerial purge astounds some company veterans. "I'm saddened at the public way it's been managed," McLaughlin said. The departed executives "feel they've been tried and found guilty in the court of public opinion without the opportunity to respond."



This is delicate territory for Nike, fraught with legal and public relations landmines. Some critics argue the personnel moves have taken on racial overtones. Six of the 11 departed executives are black or Asian, which has some convinced people of color have taken a disproportionate hit. "It sure looks suspicious," said Craig Crispin, a Portland employment lawyer. "Nike has got to be concerned about that and the possibility of some racial pushback."



Others are thrilled, as well as hopeful, the reorganization Parker announced in March — particularly the departure of Edwards and the promotions of Elliott Hill and Michael Spillane — will remedy the dysfunction that has eroded employee morale.



Investors are back on board. They pushed Nike's stock to new highs after the company reported strong fourth-quarter earnings.



Parker has vowed to continue the housecleaning.



"It has pained me," he said, "to hear that there are pockets of our company where behaviors inconsistent with our values have prevented some employees from feeling respected and doing their best work."



But a woman who'd worked in Nike's IT department until last year, is skeptical. She quit, she says, because she was fed up with the politics and poor management. "I'm not concerned about due process," she said, "I'm concerned about a whitewash."



Nike set up a hotline and website it dubbed "A Matter of Respect" for employees to submit complaints. It is believed that dozens, perhaps hundreds, were filed, though Nike refused to divulge the actual number. It's unclear what Nike has done, if anything, to vet them.



"I know that many women inside are reaching out on the "Matter of Respect" hotline and have not heard anything back from the company and they're all very frustrated," said Francesca Krane, who left Nike in 2016.



When the company announced its fourth-quarter earnings in late June, the gathered executives did not utter a single word about the bullying, or the dramatic executive changes.



"It just happened and now no one even talks about it," said Yarbrough, the Edward Jones analyst. "I think they are going to shine it on and hope it goes away."



Azavedo, too, is wondering whether Nike is serious about reform. The handful of personnel changes to date are almost solely coming out of the marketing organization that Edwards ran. The company's vast sales organization, its design and product development teams have been left virtually untouched.



"It doesn't feel authentic yet," Azavedo said. "Marketing was part of the problem. It's not the only part."



— Jeff Manning

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