Footloose And For Real -- Nike's Success Exposed In `Swoosh'

Colossal mistakes, rampant greed, heady successes, clever marketing and astute risk-taking.

These are the themes behind good business and good business stories.

Nike Inc. is good business and "Swoosh: The Unauthorized Story of Nike and the Men Who Played There," is a good business story.

"Swoosh," named for Nike's curved logo which suggests speed, shines the spotlight into Nike's every nook and cranny. It reveals the challenges, close calls and embarrassments Nike faced en route to its phenomenal success.

Author Julie Strasser was the Beaverton, Ore.-based company's first advertising manager. Her husband, Rob Strasser, was part of the core management team and a close friend of Nike founder Philip "Buck" Knight. Rob Strasser, who had been associated with the company since the early 1970s, resigned in 1987. Laurie Becklund, co-author, is Strasser's sister and a Los Angeles Times reporter.

An advertising copywriter by trade, Strasser says she always wanted to write a book. Eight years ago, Strasser recognized the story value in Nike's history and began gathering information. She invited Becklund into the project 2 1/2 years ago.

Despite Strasser's connections, or perhaps because of them, Knight never agreed to cooperate with her on the book. In fact, he opposed the project and threatened to sue, Strasser says.

Together Strasser and Becklund plowed through 30 years of Nike files and lawsuits, and interviewed most people associated with the company. Despite the lack of written documentation from the early years, Strasser insists "Swoosh" is accurate. In most cases, she says, two or three different sources corroborated information about particular scenes described in the book.

Their inside knowledge of Nike helped, Strasser says. "We already knew where the bodies were buried before we started."

"Swoosh" is a tribute to Strasser's and Becklund's thorough research. The Horatio Alger story chronicles all the significant, and many seemingly insignificant, events in Nike's history. The 700-page book represents only a fraction of Strasser's research. On computer, she has a 2,000-page chronology of Nike.

In an atmosphere driven largely by innate craziness and sustained with regular doses of liquor, drugs and outrageous behavior, the men behind Nike gambled - at times, winning; at other times, losing - as they drove their company to the upper echelons of power within the estimated $11.7 billion athletic-shoe industry.

Blue Ribbon Sports - Nike's original name - wouldn't have existed without some corporate sleight of hand. In 1962, Knight, a recent business school graduate, was traveling the world before settling down. His travels took him to Japan where he introduced himself as an American importer, a serious exaggeration, and finagled an appointment at Onitsuka, a Japanese sneaker manufacturer. That meeting launched Nike.

"Swoosh" also chronicles Nike's financing and Knight's climb to billionaire status.

In the early days, Knight's ability to push financial responsibilities and risk onto the shoulders of suppliers, sales representatives and even the professional athletes who endorsed Nike products helped save the then cash-strapped firm from self-destruction.

In the 1970s, Blue Ribbon's growth had outstripped its financial prowess, but the company didn't pull back. Instead Blue Ribbon wrote checks against insufficient funds, benefiting from "the float." The move abruptly ended the company's banking relationship; and Blue Ribbon teetered on the brink. Nissho Iwai, a large Japanese trading company, bailed Nike out.

Despite Knight's questionable financial practices back then, he maintained firm financial control of Nike, ending up with more than a 40 percent stake in a $3 billion public company, Strasser says.

In the 1980s, Nike's white-male management team learned an expensive, and nearly fatal, lesson about diversity.

Dismissing the aerobic craze as "nothing more than a bunch of fat ladies dancing to music," Nike's management arrogantly ignored that burgeoning market. Reebok took advantage of Nike's complacency and became the No. 1 athletic-shoe company in 1982. Nike has since regained leadership status, but the two companies remain fierce rivals.

Dubbed the "Saturday Night Live" of the Fortune 500, because of management's casual style, the company's stumble in the aerobics market prompted a corporate restructuring. Today Nike is run by a different breed, Strasser says. Except for Knight, all the entrepreneurs who built the company are gone.

The new Nike could bring a new story and a different future.

Can the new, more traditional, Nike managers keep the company ahead of the competition in the fast-changing, fickle athletic-shoe industry?

"I don't know the answer to that, but that is the next question," Strasser says.