Nike's CEO John Donahoe has stated that remote work poses an innovation challenge, making creating new and disruptive products difficult when employees work from home.
Donahoe made these comments in an interview with CNBC's Sara Eisen from Paris, where he was asked about investors' concerns regarding Nike's assortment of fresh new products.
He acknowledged that the company needs to include the bold, disruptive innovation that Nike is known for and explained that the reasons are pretty straightforward.
One of the reasons he cited was the closure of footwear factories in Vietnam due to the COVID-19 pandemic. But Donahoe also emphasized the impact of remote work, saying that it's challenging to develop disruptive products and innovative ideas through video conferencing platforms like Zoom.
Donahoe stated that Nike's employees had worked from home for 2.5 years, which made it difficult to create new products.
He further explained that the company recognized this limitation and realigned its efforts towards rebuilding its disruptive innovation pipeline and iterative innovation pipeline.
Donahoe assured that Nike's innovation pipeline is now as strong as ever, and consumers can expect to see new product drops every season, along with fresh storytelling that the brand is known for.
The CEO's comments come at a tough time for Nike, with some analysts and investors criticizing the company for falling behind on innovation and losing market share to upstarts like On Running and Hoka.
As we previously reported, Nike announced a broad restructuring plan in December to reduce costs by about $2 billion over the next three years.
It also cut its sales guidance as it warned of softer demand in the coming quarters and shed 2% of its workforce, or more than 1,500 jobs, to invest in growth areas, such as running the women's category and the Jordan brand.
Donahoe emphasized that despite these challenges, Nike still gains a share and remains dominant in running and sports.