#BISeattle16 Day 2

Dwolla CEOAfter Day 1 of Banking Innovation packed full of speakers from FinTechs and startups alike I was curious to find out what new information or bombshell quotes would come out of Day 2. The Banking Innovation Conference in Seattle was packed with speakers and Day 2 did not disappoint when it came to mic drop moments.

Ben Milne of Dwolla said in his session, “people who are out there to kill banks, pick a different fight”.  If that doesn’t get your attention from a startup about what this day contained, well than you don’t need to continue reading.

One of the ideas I really liked in the morning session came from Jill Castilla, President and CEO, Citizens Bank of Edmond in OKC.  As President and CEO she has seen troubled times for the community bank but pulled through utilizing innovation and social media.  Reaching out to customers in different methods and showing you care in a unique way has helped their bank excel.  They have since moved to unique micro-branches that are mostly unmanned whether it was through robo-tellers, digital ATMs and only have one location.  But it was important to note that, she helped to put her customer’s minds at ease through personal interactions online, talk about an innovative change management strategy.

Digital Panel
In the same session, Miranda Hill, VP & Manager from Wells Fargo Digital Labs describe something she was really excited about surrounding a live “test” branch that was now focusing on digital express tables.  Everything the customers can play with in the pilot and give real-time feedback.  This is a new approach vs. doing the traditional focus groups or surveys.  Now customers are playing with digital technologies in the setting where they could be using them in a less controlled environment.  To me this is so important because we can’t continue to only use traditional means to gain customer insights especially as “traditional” channels for banks are evolving.

The majority of the middle session was focused around the FinTech competition and the teams making their final pitches.  At the end of the 2 sessions with 11 team presentations – 8 minute pitches – the attendees voted and then it was up to the panel of judges to ask additional questions in a Shark Tank format to decide on the winner of Banking Innovation 2016.  The winner: SayPay which is a voice authentication platform that can be utilized to verify transfers.  As the team continues to work through all the use cases, they now have another award to add to their growing collection. Congratulations to SayPay. SayPay

During the conference, I had the pleasure of getting to talk to Steve Hoffman, the Founder and CEO of SayPay and he is such an impressive guy with a passion for his company which is so important to see from any startup that wants to succeed.  It was great to hear him describe his team and talk about their future goals. One tip I would give to anyone who is attending a conference where startups are pitching – pay attention to the team’s that are pitching, it may seem like the best time to catch up on emails but to that startup this is hundreds of thousands of hours of work wrapped into eight minutes.  To me, the best gift you can give to them is your attention because an attentive group only helps the passion shine through in their pitch and you can see a startups confidence grow with each word.  Steve reminded me of that as we spoke, and I definitely thought about some of the groups that I didn’t give as much attention too and for that I am sorry.  I am going to make it a point as I attend more pitches to give my full attention to the best of my ability.  There is a reverse side to that and it falls on the responsibility of the startups to have a pitch that is attention grabbing, easy to understand, and thought provoking.

The afternoon sessions were filled with quotes that I just loved because they all can be applied to so many things that are top of mind for many. Steve Streit, CEO of the Green Dot Corporation said something I loved, “If the product is not straight forward and self-explanatory we haven’t designed it right.” This is so true and the concept was seconded by a few other presenters. Ben Milne, CEO and Founder of Dwolla – noted the concept of consolidated control needs to become redistributed control within companies which to me is similar to the top-down, bottom-up, middle-out mindset.

Presenter after presented noted the concept of Innovation not being a job but a mindset.  If Innovation is going to work it can’t be a part time job, someone said and I think that is so true.  Innovation has to be engrained in you, it is not a function but a passion.  Innovation can be and should be in everything.  As we think about our customer’s behaviors, what do they want.  What methodology do we follow, the idea that Apple had of give the customer what they want before they know they want it or do we wait for our customer’s to tell us?

IMG_4946Marley Gray, Director of Technology Strategy, BlockChain & Financial Services at Microsoft said, “We always overestimate what you can do in one year and underestimate what you can do in 10.” Why are we in this mindset where in the near term we believe we are going to accomplish so much but when we plan ahead we are afraid to commit.  My thought is, are we afraid to commit to a 10-year plan when everything is changing so fast or do we not want to plan and have to be agile and adjust the plan to meet the times? Abhijit Bose, Head of Digital Intelligence at JP Morgan, summed it up though this is taken out of context, “Banks need to be more real-time then you can think about personalization.”  As we solve the problems of today we can’t all afford to act on the next generation of problems.

Nikhil Lele, Strategic Insights Leader at EY said something I thought really summed up the conference, “Innovation is the responsibility of everyone at the corporation, it can’t be top down or just a bottom up exercise.”  Now that I am back in Buffalo, it is time to start putting together a strategic plan for how to really get the message about Innovation and innovative thinking.  It can’t just come from me but I think I have a really good team in place that has the desire and passion to be innovative and think less like bankers and more like technologists who are ultimately trying to help our customers.quotes

#BISeattle16 Day 1

As we think about the next generation of banking, we have to think about it in a variety of aspects and Day 1 of the Banking Innovation Conference held in Seattle had a lot of thoughts to add to the conversation.

Several trends appeared to emerge from the day and a few really stuck with me.  The concept of Innovation Theatre evolved from Dan Kimerling, R&D Lead from SVB (Silicon Valley Bank) presentation.  This is particularly relevant as our model of what Innovation is at M&T is evolving.  The model is evolving to avoid doing exactly what Dan was discussing and that is putting on the show for the press regarding Innovation and having someone or a team of people that claim to be the only one’s innovating.  Now that may not have been the case for our team; however, it is the case with several other institutions and in some aspects everyone needs to take a look at what they are doing.  Is it truly innovation or is it all for show? Dan made note, having an open floor plan office is not innovation, which made me laugh because people have asked about our team’s space and what is innovative about what we do in the center. Scarlett Sieber, SVP from BBVA, noted that at BBVA, the management team had realized innovation could be utilized as an empowerment tool and have “vertical leads” in place who specialize in one area that FiDanKimerlingnTechs are focusing on which may be Bitcoin, P2P, Lending, etc. Your employees can be your biggest asset if you use them correctly. This concept is one of my biggest takeaways so far from the conference and I will be talking to the team when I return to the East Coast about how we can go about empowering this type of model and making this specialty for individuals a reality.

To go alone with the concept of R&D there is a challenge with what R&D means to banks?  We aren’t Apple or Google but we can do R&D. To Dan, R&D = Perspective + Processes + People, I liked this analogy and he had another great one when he said just like sports, you have to practice R&D.  Excellence is the goal, not perfection.  I think from a banking perspective we have to remember there are very few things we can do perfectly, we hope from the Feds and audit perspective we can perfect our BSA/AML or KYC practices but in the technology space perfection is hard – excellence can be achieved.

Another topic that was discussed by the CEO and founder of Ripple, Chris Larsen, was thinking about “disruption”.  He felt that disruption in FinTech focuses to much on the Fin and less on the Tech for FinTech teams.  He also commented on the transition of the millennial generation and how we are all moving that way.  This concept was seconded by Jonathan Rosen from PRN. We don’t just have to look at the true Millennial generation but also how the adopted millennial has moved digital, some would call this the difference because digital natives and digital immigrants.  My question is why are banks so focused on the millennial generation vs. looking at it broken down in this granular way – those born digital and those who have learned digital technologies as they have come out?

Chris LarsenStaying on the topic of millennial we have to think about what they like and don’t like, millennials have a distaste for hidden fees though they have a lower bar for trust in giving over information making them high targets for startups.  Matt Oppenheimer, stated that when building a startup in the FinTech space, you have to find a business that is scalable but you can’t scale without a strong network of Trust – millennials can help you.  Scarlett referenced that millennials make great customers when they love your product; however, they are quick to turn on you when they don’t and also jump ship if they like something else better.

Branch of the future has been a hot topic as of late and Jonathan Rosen had several things to say. We have to look at Branch of the Future as more tech, fewer people, and more devices. As we move to the “bank of the future” – Dan had an interesting perspective to say that based on behavior targeting, we should be showing our customers different versions of our online and especially the mobile platforms.  This is contextual banking but how many banks are truly ready for it?

POC PanelWe couldn’t talk about the conference without talking about the FinTech company founders that opened the show.  Joseph Pratner from dyme.co wants people to think about his company like Fitbit – taking small steps towards changing people’s behavior.  I loved this analogy and feel that a lot of people can understand it and draw a connection to it.  To me as someone who had never heard of dyme.co that statement made me want to look further into them.  So if you are someone who has trouble with saving, wants a savings “coach” or “buddy” dyme.co may be for you and it is your choice of how much reminding they are going to give you.

Biometrics has been a hot area for patents as of late with the bigger banks so I was surprised that the topic really only came up once in the first day. As far as passwords are concerned, the conversation shifted towards biometrics.  Liran Amrany said he sees the evolution of payments on your phone at the point of sale as much of a hassle as pulling out your credit card, the innovation will be when one can utilize their fingerprint and then say, a phone number or zip code. Joseph Pratner stated, the string of passcodes that we deal with now will be the evil joke that we look back on in 5-10 years which is funny to think because, what is the evil joke we look back on from 5-10 years ago in today’s world?  To me the joke is remembering people’s phone numbers because I know there are very few numbers I still remember. Will passwords be like that?

To conclude, Matt Oppenheimer asked the audience how many people in the room felt they worked for a technology company, about 5-10 people raised their hands of a full room (my guess 100-150 people). He then stated in his talk, “Banks that do view themselves as technology companies, will be the banks that thrive and succeed”.  But as one person on Twitter pointed out, you can’t forget about the customer’s needs while you create this technology.

The Recruiting Game

recruitmentIt is funny as you go through life – you find yourself looking at the recruiting game from all different angles.  When you are getting recruited for college or to play for a sports team, when you are looking for your first job or you are a seasoned professional and you are getting head hunted by an executive recruiter – it is all the same game with slight tweaks.  I look at it like learning the game of basketball.  I started off in 5th/6th grade with my elementary school team, moved on to 7th grade basketball, JV in 8th grade, Varsity for all of High School, and then 4 years at RIT and college basketball. It is all the same game but you get better at it as you go along, this can apply to a employee or a recruiter depending on who you want to be in this scenario.

As a recruiter at career fairs for the newest professionals in the workforce it is a lot of explaining, sharing what M&T is like, what some of the day to day responsibilities look like for positions in the MDP program, talking to different managers about the candidates I saw at the career fair and working directly with HR to make sure we bring in the right candidates for the job.  It is not only about sharing the on-the-job responsibilities but also the cultural aspects: what Buffalo is like, what is like to be young moving to a new city, etc. You have to treat this candidate differently because typically they have never been through this process before and I am responsible for their first perception of the company.

This part is exciting because you are sharing your passion for your career and your job with the students and helping them determine if they would be a fit or not.  You may not always get the candidate but you know that hopefully they have made the best choice for them.  I think this is where my coaching experience comes into play because I want what is best for my players, just like I want new career professionals to enjoy their first job, to find what they are passionate about and not just go for a salary. I will talk more about sharing my experience and the getting to know the candidate in the next post in the series surrounding interviewing, stay tuned!

The Face-to-Face

I read a stat the other day from First Data that stated, 41st of millennials prefer to communicate at work electronically rather than “face to face”.”  This is a fact for me and I know it is true for many of my peers.  But not for the reasons you think and over the last few weeks this has become more and more apparent to me along with the importance of overcoming this stat when the time calls for it. Face to face

It is not that we are lazy or just because we have grown up digital it is that often times it takes too long in the work world to get in front of someone’s face.  Millenials are a generation of efficiency and getting to the point. We have grown up in a world where answers are just a google away; they don’t take months to get on someone’s calendar. I have seen it over the last couple of months in my new position people from all over the bank coming together in a collaborative way and solving problems that over the phone “because it’s easier” would take months to solve.  The challenge is that not everyone makes the time or feels that they will get value out of sitting in a room with a bunch of people.

Millenials have grown up being able to text all of our friends; although it is important to note, not all of us had texting from an early age as the kids do now, I still remember when my parents had Palm Pilots for work and I would play tetris on them.  I also remember my first cellphone was a TracFone that cost half a minute per text (we have sure come a long way).  Not all of us grew up with iMessage and smartphones.  I am still using my first “smartphone”, hopefully for only a few more weeks since the new 6s has come out and my 4s is on end of life.

I am a millennial and I would rather have a conversation with a person face-to-face at work but it is because I want to gauge their expression and reaction to what we are talking about. But I don’t want to wait month’s to have a conversation either.  For something small, it is easier to just sent a text, message, or email to someone than to wait to get on a calendar.

Face-to-face communication is not dead, if anything it is more important than ever as the millennial generation progresses through their careers.  Don’t create more tools that encourage non-in-person conversations but create more tools pulling people together (virtual or in person), more things get done with this technology, this is when progress happens, not over the phone.  Millenials may struggle with face-to-face conversations sometimes but we need to learn that there is a time and a place for quick and convenient and there is a time for meeting and talking.  It is just making the most out of the meeting that is the most crucial piece to getting anyone to actually come to a meeting, especially a millenial!

I Think I Smell a CopyCat

Last week Facebook launched video posting in Instagram to a not so excited crowd.  Had this launch come prior to Vine for Android was released it may have had a larger effect and been welcomed more readily (at least by Android users); however, the new version of the popular photo sharing app has lead to mixed reviews.

I myself do not plan on going out of my way to use Instagram video.  I like the fact that Vine can only capture 8 seconds worth of video.  It makes you have to try harder to fit in everything and it is an interesting concept for marketers to try and work within a limit of 8 seconds compared to a 30 second TV commercial blocks.

So how do you capture someone’s attention in 8 seconds? Is it truly possible, because apparently Facebook did not think so.  Facebook’s acquisition of Instagram had potential to be huge; however, when they pulled Instagram photos from being shown on Twitter they lost part of my faith.  If I have to go to a separate app just to view a picture it is not worth it; however, if I am already on the app (Instagram) I will look at the pictures.  Normally I go out of my way to post a picture to Instagram and then to Twitter (separately) just to prove a point.  I like having a photo library to go along with my Twitter profile and Instagram photos do not save to my Twitter photo log.

It makes the most business sense to me at least for Facebook to want to be on Twitter, their biggest competitor, not attempt to force people off the social network.

Recently Mashable came out with a news update that shared how Vine was now more popular than Instagram on Twitter.  In my opinion this is due to the fact that people can watch your video right in Twitter and you do not have to leave the app in order to view the clip.

It is still to early to tell who is going to win this battle; however, I am curious to hear about your opinion? Vine or Instagram…the battle is on.

instagram/vine

Social “Studies” on the Go

The evolution of technology truly is amazing.  This past week I was on vacation in Florida for the Easter holiday.  I was missing class, which is something that I usually do not like to do.  My last quarter at RIT is extremely busy; I am currently taking 24 credits (yes you are all probably thinking “you’re crazy!”). But sadly I am obsessed with learning new things. digital classes

How many of you can say that your classes utilize hashtags on Twitter so that you can keep up with your classmates?  At RIT, especially within Saunders college marketing  program and classes are beginning to utilize hashtags for classes to continue the discussion outside of class.  My class hashtags currently are:

  • #ritaim
    • Advanced Internet Marketing
    • #ritsm
      • Social Media
        • On my travels I was able to watch a live tweet session by my class and professors during a presentation by Ryan Looysen on social media for businesses.
        • #digent
          • Digital Entrepreneurship
            • This is not just my class hashtag; however, my Professor developed it a few year back when the Digital Entrepreneurship class was first run.  We use a website designed to bring those with digital business minds together in forums.
            • Do you know someone with an idea for a web business? They may be able to find creative like-minded people to progress the idea.

I will say most of the information does requires having an internet connection and one place I stayed on my trip did not have internet, but I guess that is what my iPhone is for.  Most of my work could be done offline (aside from anything social media related) and then uploaded when we arrived at the location with Internet.  Even this blog post was done offline and then uploaded when I arrived at my destination.

I think the way technology has transformed the way we do work is amazing and I think that colleges need to start taking that into consideration.  For me, most of my work for the agency I work at can be done out of the office (when I have internet).  If this is the case than why should homework for classes really be any different?  RIT does a great job with their marketing students preparing them for different situations; however, there are some professors that do get extremely angry if you are missing class or using social media.  I find using my iPad or iPhone to tweet in class a good piece of information is good practice for community management (future career I am looking into).

In my opinion most information is already online; except really for my major because it constantly changing.  Majors like accounting and finance and science based majors (though practices may change) the theory is all relatively the same it is just a matter of how you learn it.  Social media, Search Engine Optimization (SEO), online marketing and Search Engine Marketing (SEM) can all be learned through blogs, tutorials and webinars.  Why not learn your trade on the medium you are going to be using.  Our field is such that the second a textbook is printed on any of the above topics it is obsolete.

Twitter

Social Media Today created an infographic that highlights who is using social media in the classroom.  It found that Twitter is the most under-used social media tool in the classroom. How are professors using social media to enhance student’s education?

  • Share resources outside of class time and then hopefully gain a reaction from students.
  • YouTube is a widely used medium in the classroom for its wide variety of videos.

So, how would you like to tweet for a grade? Colleges are starting to see digital marketing, new media marketing, online marketing, and community management are growing fields in the world, so why not offer a major for this type of career path?  I know at RIT I have take social media courses, online marketing courses, digital business courses and internet marketing courses to gain a little bit of all the pieces of the “online marketing career field”.  The problem is finding the right people to teach the young field.  What makes an “expert” and makes someone qualified to teach the field that is ever changing.

To me it seems crazy that I could essentially do all my work remotely and tweet and blog for grades; then again, I am a New Media Marketing major, and I love every bit of it.

Social Media for Higher Education

The education world is constantly evolving to meet the changing strategies and technologies in the digital space. Social media adds a new marketing medium for educators, recruiters, and students to use. The digital space is often confused with being an easy marketing tool and strategies are not thought out within the college space. Problems with social media have plagued colleges during the digital era. Educators and college departments have made attempts at grabbing the students attention with whatever platform they currently are on, but a lot of campaigns lack one huge component: the student voice.

Educators often lack the understanding of how students talk, communicate, get engaged with different things. What are the secrets behind student engagement? For the past year I have been working at Rochester Institute of Technology on the social media marketing campaign for our new Student Information System with ITS and the more recently (since July 2012) on the Semester Conversion campaign. The SIS campaign began as my six-month co-op and turned into a part-time job when I returned to classes in the Fall. I became part of the semester conversion campaign during the end of my co-op when I was approached for ideas regarding creating awareness to the student population about the major transition that RIT was entering (the transition from quarters to semesters).

To give some metrics from my campaigns:

  • We had over 1,300 likes for our SIS page when the transition was happening and 259 followers on Twitter (and growing)
  • Both pages have given out prizes including: gift cards and iPads
  • We have over 328 likes on our Facebook page and growing for Semester Conversion and 45 followers on Twitter (and growing as the conversion approaches)
  • The SIS blog has received over 13000 views in under a year, while the Semester Conversion blog has received over 1000 views.
  • We monitored Reddit and watched to make sure that student’s were giving out correct information online and put the correct information out there when there was a problem.

So what did I learn? How should my knowledge help people in higher education trying to reach students with the power of social media?

Here is a short list that I learned that can help other schools trying find their way with Student Engagement Online.

1. Blogs

If I learned one thing, it was the power of blogging. If you are going to have a social media campaign, you better have a blog and use it. If you are unsure about blogging, the proof comes from my campaign, 13000 views, retweets on Facebook and Twitter. A blog can be the ultimate bank for canned responses in higher education. A blog allows you to give the correct information and then post it on Facebook and Twitter to create a dialogue with your users.

2. Create Content that Students Want to Read

RIT

Social Media is not about just giving information and promoting yourself. You want to engage your users to ask questions and give you feedback, especially if you are targeting a student population. They already get spammed by college emails that are sent out to the massive population. Students want to feel connected to something more than an auto-reply. I tried to create content that was original, yet informative at the same time. When you stop feeding students facts and give them something that makes them want to “like” a post and say that is cute, it can be the difference between maintaining the like and the student “un-liking” your page especially for a specific campaign. It can also be the difference between the student remember the information in the post and just glancing over it.

3. Never Delete

The only reason to ever delete any feedback or comments is if they are spammed links. If you delete something off of social media it can create an even bigger fall-out. Positive or negative feedback all deserves a response. There is a fine line between ignoring someone because they are being annoying and asking useless questions and addressing serious concerns or negative feedback. The new SIS system at RIT received a lot of negative press and we had to address student, staff and faculty concerns. We had “trollers” (excessive posters) and we found that when you monitor what you say to them, answer the necessary questions and do not give them any reason to post further, they will start to go away or in our case other students will start to call them out on their trolling and unnecessary commenting.

4. Not Everything Is Going to Be Liked By Everyone

It is extremely important to stand by what you post, if you make a mistake than you can correct yourself; however, you should not delete the mistake.

I know for me on Twitter, I just recently made a mistake regarding when final grades were due. Unfortunately, I confused a staff member and they tweeted back to me. Before this campaign I would have deleted the original tweet and tweeted out the correct information. However, I personally apologized for the error and tweeted the correct date.

5. Never Assume

Assuming can lead to negative comments by students. When you make a mistake, students will find it and they will call you out on it.

The same mistake I made on Twitter, came from assuming. I did not check the academic calendar because after 7 previous finals weeks and grades, I assumed that grades were due by Sunday night at midnight as it had always been or as I had always received my .

Working in social media is about creating engagement. If you are creating a buzz and creating awareness than you are doing your job as a campaign manager in higher education. Most campaigns that will be run in higher education will be awareness campaigns, you want students to learn or get to know something know something. My two campaigns created the awareness that the Student Information System was changing and that RIT was converting to semesters for the 2013-14 academic year. We did not have any students complain that they did not know that the SIS was changing nor say that we were unaware we were converting to semesters. The semester conversion campaign was more about getting the information out while the SIS campaign was about making sure that students were informed and understood how to use the system.

In higher education the powers of a university often forget how to utilize your students. Releasing power is often hard but why not let students talk to students or come up with ideas about how to create awareness when it effects them.

I urge anyone to comment or contact me regarding their experience with using students to do work in higher education or create engagement through a social media campaign.

Nike = Innovation

Nike SwooshWhen I think of innovation, I think of one thing, Nike.  There is no denying that Nike is an innovative and world leading company in both design and creativity for sports apparel.  Nike has served as the number one sports apparel company since the mid to late 80s and has continued to shock the world with each new product design.  The creative team of designers, developers, and marketers has come up with winning product campaigns, time after time.  To Nike it was always about the mind of the athlete, the body of the athlete, and helping the athlete be the best that they could be.  Nike was an athletic driven company that wanted to help athletes all over the world improve and reach new limits every day.

Leadership

It is hard to imagine a world without Nike.  It is not surprising to me to know that Nike was founded by athletes for athletes.  The original founders were Bill Bowerman and Phil Knight.  Both were track runners.  According to Inc.com, Phil Knight essentially created the market for running shoes.  But people would often ask how did he do it?  Well, he made athletes believe, to be a serious athlete you have to have the right equipment, his and Nike’s.  After getting the athletes on board, he turned his product into the “it” thing to have and convinced the remaining non-athletes to buy into the company.

Knight was the young track star, coached under Bowerman and while at the University of Oregon, ran a 4:13 mile (Inc.com).  Track was in both founders blood.  They were committed to designing the most innovative track shoes to push the limits of their passion-filled sport.  Even today as a basketball athlete I know that almost every single athlete has to own a pair of running shoes to train outside of their sport, Nike just capitalized on that market like no one else, in my opinion, had.    The Mission of Nike

Sources of Innovation  

A great product comes from passion.  Bowerman and Knight had a shared passion for running and innovation.  They understood the mind of an athlete, the body of an athlete, and the passion an athlete can have.  They also understood that the world of athletics is constantly evolving as research becomes available and knew they needed to stay up to date with the latest trends and research to fit in to the athletic world.  They believed in doing research in house and studying real athletes.  The pair wanted to understand what athletes want in a product for their sport, so they turned to applied research.  Nike developed their own research lab known as the Nike Sports Research Lab (NSRL) to which few outsiders are allowed in (Newcomb).  Inside the lab they do personal interviews with athletes to understand the mind of today’s athlete, as well as, physical tests to understand motion and feel and the reactions of athletes (Cushioning Explained: Nike Lunarlon).  I believe that it is important to understand your market before you try and create for that market.  In my opinion after conducting my research, Nike is one of the best companies at doing applied research.  The research lab is probably one of the coolest things I have ever studied and now have a better understanding for Nike’s passion for its consumers.

Running shoes were the company’s first product.  They were designed for athletes with runners in mind.  In order to create the Nike Lunarlon, and design the best product the company could develop, they performed a series of tests to understand how the body would react to the samples and made changes.  They studied different pressure points in the foot; in order to, displace the pressure running can place on particular areas of the foot.  I believe that the dominant light weight design lead to the creation of a signature product that developed into an empire.  Bowerman and Knight did not set off wanting to create an empire; they saw an opportunity to help athletes with their passion and took it.  This in my mind is extremely important; you rarely find success in things you are not passionate about.  To find your calling, you must be driven by passion. Nike Shoe

Strategy

The Nike Inc. strategy was to create products for athletes designed with the athletes (consumer) in mind.   The company took risks when risks were not always popular in businesses.  They designed with passion and detail in mind, rather than dollar signs in front of their eyes.  I believe that that mentality drove their success.  Athletes want to feel like the products they are using are designed with them in mind, not something that was mass produced with little thought.  Nike products allow users to feel like way.

Nike’s strategy did not just end as customers would hope it would.  Nike had a main goal to produce their goods cheaply since the process of production required fairly little skill, Nike was able to acquire a large unskilled labor force in Asia to aid in the manufacturing process (Nike- Managing).  The design and modeling/pattern making phases could take place in house by the team assemble at Nike.  Followed by molding of soles, cutting materials, lasting, stitiching, finishing, inspection, and packaging could all be done cheaply with the help of unskilled labor.  Nike then placed staff members at their contract factories.  These workers were in charge of reporting back between Headquarters and the Research and Development team and the factories.  See Problems for more information about the unskilled labor at Nike.

Porter’s Five Forces

Degree of Existing Rivalry – When getting down to the specifics of the Nike running shoe, Nike is the industry’s leader in the athletic footwear market.  Companies like Under Armour, New Balance, Adidas, and Reebok all hold a smaller share of the athletic footwear market.  I believe that with the current competitors of Nike, no one with the exception of Under Armour, can compete with Nike in the sport specific athletic shoe market.  In my opinion, athletes come to Nike to get a shoe designed for their sporting needs and then find additional products at the store.  I understand that there will always be competition within industries, but for me and I believe that most runners will agree, Nike will always be the leader in running shoes.

Threat of Potential Entrants – The running shoe has been around longer than Nike has but the company was the one (in my opinion) to modernize the athletic shoe market.  To change the way things had been done in the past and customize shoes on a sport by sport basis.  The Nike Empire was built for its customers and stood by the idea that athletics are constantly evolving and athletes need a company to grow with their desires and needs.  Their buyer loyalty towards the signature swoosh helps create an entry barrier for potential entrants.  Fun fact, Nike only paid $35 to have the signature swoosh designed (Gunderson).  With the big five (Nike, Under Armour, Reebok, Adidas, and New Balance) in shoe manufacturers holding a majority of the market shares; potential entrants are hesitant to attempt to enter into the athletic footwear market.

Bargaining Power of Suppliers – Nike is a company built on good relationships and products that have a lasting quality to meet the needs of all athletes regardless of sport, fitness level, or competition strength.  Shoes in general are built out of basic materials, including rubber and leather; suppliers have little bargaining power over prices, as these are manufactured into something else and the warehouse.

Bargaining Power of Buyers – Brand loyalty is a staple of Nike’s company.  Customers choose to buy from Nike based on what they grew up with.  It is often innate for Nike loyalists to go to purchase a Nike shoe over that of its competitors.  These loyalists dictate a lot of things and can alter Nike’s success if they are not happy.  Nike has to think twice before discontinuing or changing popular products.  Nike loyalist grow accustom to certain things and when things are altered it can either work in Nike’s favor or be a negative (shoppers may choose to go to a rival and purchase their like merchandise and cause a loss for Nike.  Buyers also have the power to dictate price.  Nike offers a high quality and moderately priced good to the masses.  In terms of Nike running shoes, their prices on Eastbay.com, averaged typically between $80 and $100.  This is in comparison to Under Armour which ran from approximately $100 to $120.  I will never not be brand loyal to Nike but I know and recognize that there are other brands out there for sale.  I was having problems with my feet last year and was told I should try a pair of New Balance running shoes because they are better for people with extremely high arches like I have.  I bought them but I have only worn them once because I am convinced they hurt my feet.  I know deep down they do not but because they are not Nike there has to be something wrong with them.  For me however, I do not know if I will ever be able to fully accept another brand, at least when it comes to my athletic shoes.

Threat of Substitutes – Nike is a globally recognized brand for athletic shoes. Athletes from all over the world will be sporting Nike shoes during the Olympic track and field competitions.  In most athletic competitions (on-land) it is recognized that one must where shoes.  One threat of substitute could be going without shoes, I recognize that there will always be the latest research going on that says that running barefoot is better for this or that.  However, dry-land athletes, I believe, will want to protect their feet and will always need shoes.    Nike’s design will continue to change the sport of running for the better, creating a lighter design that will help athletes dig deeper and reach for their dreams.

Introducing the World to Nike         

The original idea for Nike came from a research paper that Knight wrote at Stanford.  But the timing of Nike could not have been better.  The first New York City marathon was planned in 1970, this started a national running culture.  As Nike emerged to the world in 1971, the new runners of the world needed a shoe that was going to power their run. Runners began turning to Nike for their shoes because it was a company for athletes created by athletes.  Runners could relate to a company that was created by runners because they felt the design would be running focused and they were right.  The 1972 and 1976 Olympics were the press that Nike needed to continue its new found success (Gunderson).  Nike started out so many years ago as a shoe manufacturer and I believe that despite their continued expansion they have continued to return to their first product, running shoes.

 Dominant Design

The running shoe was not a new piece of technology.  Running has been around since (hypothetically) the beginning of time.  Nike was the company that put running back on the map.  Their continued innovation and drive to produce a better product for athletes made the company a popular favorite of many athletes; whether they were professionals, Olympians, everyday citizens just starting out, young or old, Nike drove the phrase, “if you have a body, you are an athlete”.  As the times changed, and as athletics developed into a cultural phenomenon, Nike had to evolve to make their athletes better.

In 1979, Air Technology was implemented into the Tailwind running shoe. The new technology was the first of its kind.  The original technology was created in an insert form according to the article Cushioning Explained: Nike Air.  The technology was then transformed into a patented process by Frank Rudy which placed dense gas-filled plastic membranes inside the sole of the running shoe to provide a cushiony light feeling to athletes (History of Nike).  It was an “air revolution” in the world of sports.  This was a large step towards athletic training and running becoming more comfortable for the athletes.  The air technology was placed in multiple models of Nike’s shoes and continued to advance the way athletes trained.  As the technology evolved it became lighter and provided more cushioning adding additional comfort.   The innovative Air technology allowed for smoother transitions and quicker responsiveness.   I believe that Nike’s dominant design powered their work and increased sales driving them to the top of the industry.  People want the latest and most innovative and that is what Nike promised them.

Who is Involved?

Nike is home to many different types of workers.  One can start with the designers.  The team has created product after product that challenged the way people think about sports.  The factory workers are the shoe manufacturers.  Unfortunately most of these workers are paid below the cost of living and are working extensive hours (see Problems for more information).  Then there is the marketing team who has run successful campaigns that have become known all over the world.  Biomedical engineers can be involved in the process because in some cases Nike’s running shoes are designed for a health benefit and based on movement.  These engineers are helpful in understanding motion and the way the body functions.  Electrical engineers are involved in some Nike running shoes.  They have helped create the Nike + system in which a tracker is inserted into your shoe and registers data on your iPod.  Nike contracts hundreds of shops around the world to manufacture its products.  Nike is always on the hunt for mechanical engineers, software engineers, and program management engineers.  There also other areas of engineer that are less assumed including Quality Assurance, Manufacturing, and Development Engineers (Career Areas).  There are countless other engineer types but at Nike they fall under the Shoe Engineer category.  A lot of people make the team run successfully at Nike.  Through my research I was able to find out even more people are involved in making Nike the company everyone sees.

Problems

Nike has received a lot of complaints from consumers due to their labor conditions.  Nike is a company that outsources their production to countries such as China and Vietnam, which continue today to be the major countries Nike shoes are made.  Nike also does not own its own factories, it simply pays the price that they set, controls what materials are used, and gives out the design.  The controversial statement Nike used to use was that they were simply the “buyer”.  This has lead to the anti-sweatshop movement and now Nike is forced to take responsibility for their workers who manufacturer their profitable products (Nike FAQs).  The workers in the factories in Southeast Asia receive minimal wages and work large amounts of overtime.  Workers continue to organize labor strikes that Nike often leaves out of company briefs.    After doing my research, I can conclude that there is a lot to Nike that people do not understand because all we are exposed to is the athletic powerhouse.  Although I can see that Nike did raise their standards for working conditions and increased their minimum wage, I can accept that Nike has a long way to go.  For a company that can afford to have everything, they can afford to pay a living wage to the companies factory workers.

Nike is not just a company that is based around running shoes anymore, or even shoes for that matter.  However, when you look at their core values, despite their success, they are still a company whose core competencies lie in innovation and creativity, for athletic sneakers.  Knight was quoted speaking to Inc.com “I hope nobody ever starts thinking this company is some kind of institution.  We’re still just a bunch of guys selling sneakers.”

Just Do It

Work Cited

Career Areas. (n.d.). NIKE, Inc. . Retrieved July 17, 2012, from http://nikeinc.com/pages/career-areas

Cushioning Explained: Nike Air. (n.d.). Striperpedia. Retrieved July 16, 2012, from http://www.footlocker.com/striperpedia/article/5000743/Cushioning%20explained%3A%20Nike%20Air

Cushioning Explained: Nike Lunarlon. (n.d.). Striperpedia. Retrieved July 16, 2012, from http://www.footlocker.com/striperpedia/article/5000742/Cushioning%20explained%3A%20Nike%20Lunarlon

Gunderson, A. (n.d.). Great Leaders Series: Phil Knight, Co-founder of Nike . Small Business Ideas and Resources for Entrepreneurs. Retrieved July 16, 2012, from http://www.inc.com/30years/articles/phil-knight.html

History of Nike . (n.d.). KicksOnFire – Sneaker News & Release Dates. Retrieved July 16, 2012, from http://www.kicksonfire.com/history-of-nike/

Newcomb, T. (n.d.). A Look Inside the Nike Sports Research Lab – Popular Mechanics. Popular Mechanics. Retrieved July 16, 2012, from http://www.popularmechanics.com/outdoors/sports/technology/a-look-inside-the-nike-sports-research-lab

Nike FAQs. (n.d.). Global Exchange . Retrieved July 17, 2012, from http://www.globalexchange.org/sweatfrree/Nike/FAQ

Nike – Managing a Non-Market Environment. (1998, May 1).Goodworks International. Retrieved July 17, 2012, from gsbapps.stanford.edu/cases/documents

Women’s Running Shoes. (n.d.). Eastbay. Retrieved July 16, 2012, from http://www.eastbay.com/