Nike veteran Peter Ruppe is the man behind Brand Jordan, one of sport’s most iconic marketing campaigns. Now he has been charged by Under Armour to take on his former employers in the footwear space. He spoke to Matt Cutler.
“A great business person thinks like a great designer,” says Peter Ruppe, reflecting on why Steve Jobs is the standout commercial mind of this generation.
Ruppe worked with Jobs in the mid-2000s to create the Nike+ fitness apps.
“I was fortunate to have been around Steve for an 18-month period where he was at the height of his game. It was before he’d launched the iPhone or iPad,” he adds. “He had a reductionist quality and a clarity of thought that meant he cut through the crap of a business model or product like nobody I have ever seen. It was really incredible to watch how he went about doing that, how he led his teams, and how he challenged them.”
He wouldn’t say it himself, but speak to Peter Ruppe’s peers and they’ll tell you they see the same traits in him as he saw in the late Apple founder. Having led pretty much every division of Nike across a 27-year period from the early 1980s, Ruppe played a key role in its journey to becoming the world’s leading sports apparel company, and one that is targeting $30 billion in annual revenues for the 2015 financial year.
Ruppe’s best known work is on Brand Jordan, the banner covering a product range that was created a year after Nike signed basketball’s greatest ever player Michael Jordan in 1984. According to research by Morgan Stanley, last year Brand Jordan had a 64 per cent share of the basketball footwear market in the United States, ahead of Nike on 33 per cent – 11 years after Jordan retired.
Ruppe wrote the business plan for Brand Jordan and masterminded its separation from Nike to create the number one and two brands in basketball.
At the heart of successful leadership in the sports apparel sector is the ability to understand and input into the creative process of product creation while at the same time mastering the business side – everything from marketing strategies to where production is based and what materials are sourced.
“Peter has very good business skills and a creative vision, which is a somewhat rare combination,” says Tinker Hatfield, Nike’s vice-president for design and special projects. If Steve Jobs is the God of the tech world, Hatfield is the God of the sports footwear world having designed nearly all of Nike’s most popular shoes since the late-1980s.
“As a leader, Peter really supported his team members, including the designers. He protected and participated in the creative process. I appreciated his support for new ideas and concepts on several occasions,” Hatfield adds.
Sports executives with the skills and track record to lead at the very top level don’t grow on trees, and that is why, seven years after leaving Nike, challenger brand Under Armour has come calling and asked Ruppe to lead its battle in the sports footwear space, the area of his most prominent successes at Nike.
Under Armour was founded in 1996 by Kevin Plank and, following early triumphs in sports performance, has begun an aggressive growth strategy to knock Nike off its perch as the leading global brand in sports apparel. And if financial results are anything to go by Nike should be looking over its shoulder carefully, Under Armour having posted 19 consecutive quarters where net revenue has grown by over 20 per cent. In Q4 2014, net revenue hit $895 million.
“My task is developing the athletic footwear business for Under Armour, and that means everything from what we create and how we take it to market to where we source supplies,” says Ruppe. “It’s a massive opportunity. The business has been growing well and we are well-positioned to start growing aggressively.”
The son of an American football coach, it was Ruppe’s father’s connection to track-and-field coach Bill Bowerman that opened a door at Nike straight out of university. Bowerman coached Phil Knight at the University of Oregon and the two went on to found the company in 1964.
“I came out of college originally looking to work in the energy field, as I’d been doing a lot of research for oil companies looking at alternative sources of energy,” he says. “That was intriguing, but I went and interviewed and it didn’t feel right; there was too much of the oil industry and not enough of the alternative energy industry.
“So I went back to Oregon and discovered I had good connections with the folks at Nike. I hadn’t really contemplated it before – though I used the products, the company itself wasn’t really on my radar. But I reached out, interviewed, and that’s where the journey started. That was in 1981 and I was there for 27 years.”
Though Nike had captured a 50 per cent market share in athletic footwear by 1980, Ruppe says in the early days of his career the company was really learning how to master the sports apparel industry as it went along.
“We didn’t have the answers, and we didn’t have it all figured out. The sports industry and sports marketing was really basic and undeveloped, so we were really pioneers in that space. A lot of what I had to do [at Nike] was step in and work out how to build a business,” he says.
“You can characterise Nike’s successful growth in the early days in three areas. Firstly, a very defined and clear business model centred on some really strong principals that we held to. The first of those was innovative product; there was always an open curiosity into enhancing athlete performance through the products. From day one that was in the DNA of the company.
“The second was aggressive marketing – being bold and making partnerships work better…basically being aggressive with the markets we were trying to serve. The third piece was economic sources of supply: we really thought about where we sourced the product, who we worked with, how we could pack as much value into the product as possible – but at the same time still be good partners with the citizens of Japan, Korea, Taiwan, China, Vietnam and others.”
Ruppe’s most distinguished period at Nike came from 1988 to 1996 when he headed up Nike Basketball, where he took on Brand Jordan and, despite a strong challenge from Reebok, increased annual revenues of the division from $300 million to $1.5 billion between 1988 and 1992. The competitive response to the Reebok challenge, says Ruppe, was to “develop the soul of the brand”.
“We needed to get the brand to connect with the target audience on an emotional level,” he says. “When I came in to run basketball I had to jump from the back-end of the business to the front-end, and the sharp point in terms of where the brand was defining itself at the time. We spent a lot of time understanding the soul of the brand – why these kids were shaving Nike and Jumpman logos into the back of their heads, or getting tattoos.
“What we had to understand was that the brand wasn’t ours, it was theirs. We had a responsibility to live up to the promise they were holding us to. Part of the brand-building exercise was, for the first time, unleashing industrial designers onto footwear – using design to convey and create an emotional response. It became a hallmark of what the brand is today.”
With Brand Jordan and its legendary Jumpman logo, Nike created an emotional brand attachment that exists today, even with basketball fans who were born long after Jordan retired.
Brand Jordan produces a wide range of sports apparel, though it is best known for its Air Jordan shoes that were first released in 1985. On December 20 last year, the retro Air Jordan XI Legend Blue shoe sold out on Nike’s website in three hours, and according to Forbes, Jordan earned $100 million from Nike and other partners in 2014, making him the highest earning current or retired athlete in world sport.
Ruppe was involved in Brand Jordan in two phases, but says the first wasn’t as successful as many people would imagine: “Michael was immediately the rockstar of basketball, but the first generation of products we did, between 1984 and 1985, was very mediocre and we tried to sell way too many of them. We learnt some hard lessons there.
“I came in more fully two years later when we had a far more solid game plan. I carried the ball forward with brand campaigns, and [director] Spike Lee came in to have fun and show a human side to Michael in our communications. I also briefed the design of the products.
“However, my work was all about moving the culture of basketball forward, understanding how it was moving society forward and how Michael was involved in that. It was deep-ridge briefing and interacting with both Michael and advertising agencies and the designer, Tinker Hatfield, coming through with great ideas year in and year out.”
Nike operates to leverage its near monopoly power. They try to crush everybody
Ruppe moved on from basketball in 1996 to head up and diversify Nike’s entire footwear portfolio, before managing the business units that weren’t footwear or apparel under the title of vice-president and general manager for Nike Global Equipment. It was during that period, from 2000 to 2006, that he worked with Apple to create the Nike+ activity tracker technology.
His last two years at Nike were spent managing the training and field sports division, but following a series of management changes, Ruppe says the culture of the business changed and it was time for him to leave.
“My leadership style wasn’t valued anymore,” he adds. “Phil [Knight] had officially given the reins over to the current CEO and a small group he surrounded himself with; they were all my peers, but took control of the company…it wasn’t collaborative and participative anymore, and ideas that came bubbling up weren’t celebrated.”
Ruppe says that the culture at Under Armour under Kevin Plank reminds him of his early days at Nike, and the reaction to his new job from former colleagues at Nike has convinced him that it was the right move to make.
“Nike operates to leverage its near monopoly power. They try to crush everybody, and they’re pretty damn good at it so I respect them for that,” he adds.
“But at the same time, I have a great reputation, and the benefit of me being here [Under Armour] is that I know how to treat people and I know how to help people develop.
“I think I help people get the most out of their capabilities and I take a lot of pride in that. What I’m finding here are opportunities to build a strong team with a phenomenal culture. I honestly believe that all the work I have done until now was to prepare me for this moment.”
Ruppe says though they are two very successful entrepreneurs in the sports apparel space, comparing Phil Knight and Kevin Plank is like comparing apples with oranges.
“Kevin Plank is not Phil Knight, he’s in another world: super bright, super aggressive, very participative, connected to his teams and very open,” he adds. “He’s a team sport athlete by his nature and he’s one of those people that earned his way onto the field. He’s humble, he’s hungry and from the time I met him and his leadership team I fell in love with the place.
“I worked closely with Phil, obviously, but only as much as anyone has worked closely with him – he is very introverted. He doesn’t let a lot of people into his circle. That was and is his style of management.
“Phil is a competitor. He’s very smart and thoughtful. He also did a great job with the culture at Nike because he levelled egos very well and didn’t let people get stuck in their positions. He encouraged the best out of people. So in many ways he is a fantastic leader. But a distant leader, he was detached.
“I think Kevin has a lot of the traits Steve [Jobs] had. He has the same sharpness, but at the same time he’s young compared to the Steve Jobs I worked with. He’s learning all the time and he has something Steve didn’t which is a team-centric way of operating.”
Ruppe has been charged by Plank to create a consumer sports footwear business that challenges across the board. And though that means basketball is only one of a number of areas the company is targeting, Ruppe will have Brand Jordan and Nike Basketball firmly in the crosshairs.
“We’ve had a lot of success in field sport, particularly American football, because that’s where the company originated. So we’ll stay very atuned to sports like American football, baseball and lacrosse,” he says.
“The one that’s in our bullseye right now, though, is soccer. We believe we are really ready to force a step-change there. I don’t need to convince anyone in the sporting world of how big soccer is. We have some assets there, we’ve got some great ideas for products and some good ones about to come to market.
“Then you have to compete in the big categories, so running and fitness is one where we very much want to be a ‘change-agent’, bringing new ideas forward and being a thought-leader by connecting with athletes during, pre and post those experiences. Athletic footwear is the biggest consumer segment and we have a couple of big winners in that market right now – that gives us a good position to begin with.
“We also have to win in basketball. Right now we have the world’s best basketball player on our team, Steph Curry – that gives us a foothold in the sport and we are doing well with product sales. The kid’s amazing, and everyone is going to fall in love with him. He puts on a show every night he plays, and importantly he’s wearing our products and he’s loving them.”
An early win for Ruppe and his division came this year when its Fat Tire GTX product (see above) – an “all-terrain vehicle for your feet” that is targeted at hikers and developed in collaboration with tyre manufacturer Michelin – was named product of the show at January’s Outdoor Retailer show in Salt Lake City.
“It’s a really compelling piece and one of those items that shows how Under Armour looks at things differently compared to some of our competitors,” says Ruppe. “We’re getting wins now and we’re going to continue to multiply those.
“The challenge for me is I’m already thinking about two years down the road. But what you are seeing in the pipeline for us is continuous proof that we’re as good as anybody, if not better, at making athletic footwear. Fat Tire is evidence of that.”