Nike’s sustainability strategy uses management innovation to address the company’s impacts on workers and the environment across the supply chain. MIT Sloan has been a part of that innovation process through faculty research and student engagement.

NIKE’s Sustainability Journey

Nike was one of the first US apparel and footwear brands to outsource manufacturing and achieve competitive pricing, helping launch a wave of globalized production in the industry.  Over time, this vanguard role brought them in contact with another key player in a globalized economy - activists with worldwide reach started to criticize the potentially negative impacts to contract workers and the environment, particularly in the developing world where standards often are challenging to enforce.  This experience began a two decade-long journey in sustainability for Nike – from reacting to these attacks, to innovating and creating new business value, to shaping the debate.   MIT Sloan has been there at several pivotal moments as an objective and credible voice as well as a pragmatic partner.

Innovation for sustainability

The Nike-MIT relationship has explored the full range of opportunities for meaningful collaboration along the way.  Dozens of students have been selected for competitive summer internships, or have been hired at Nike through the company’s extensive on-campus recruiting efforts at MIT.  Four different student teams have carried out action learning projects, evaluating Nike’s sustainability strategies, in S-Lab and L-Lab. Peter Senge and his colleagues have helped develop the leadership capabilities of key sustainability leaders at the company through internal workshops and the Society for Organizational Learning.  MIT scholars wrote a case study of the Nike Considered product development methodology, and conducted in-depth studies of Nike’s efforts at improving labor conditions in factories around the world.

Hannah Jones, Nike Sustainable Business & Innovation Vice President said: 'Universities, and specifically MIT faculty, students and alumni, have been important collaborators and thought partners in helping Nike on its journey to be a more sustainable company.'

 

The challenge of social sustainability

Nike’s bold commitment to transparency through this supply chain research helped identify a stark fact about global supply chains: the “standard playbook” of industry (driving compliance in factories through codes of conduct, monitoring, and auditing) has been largely ineffective at producing sustained improvements in workers’ lives. Where there have been improvements in contracted factories in Nike’s supply chain and throughout the industry, it is through far more intensive engagement with factories to grow their capabilities, and engagement beyond the factory walls. This includes programs like lean management, which itself has its roots at MIT.

These insights have sparked an industry-wide inquiry into efforts that go “beyond monitoring,” including factory redesign and managerial training, improvement of product design processes that affect manufacturing, and strengthening of labor and government institutions in developing countries.

Nike has come to a point in its journey where it’s calling for a different type of collaboration - one that isn’t siloed but is based upon collectively identifying barriers and opportunities and working through partnerships to speed and scale solutions. Also originating at MIT Sloan, systems dynamics has inspired the company to strive for a holistic approach. Nike is progressively innovating in sustainability and its philosophy to continuously learn and improve is one that educational institutions including MIT Sloan have helped Nike to embrace.