Nike: Sporting chance of getting it right

By Ross Tieman
Published: June 24 2005 13:52 | Last updated: June 24 2005 13:52

Geoff Taylor has been thinking about enterprise risk and maintaining business continuity for more than two decades.

As the director of Risk Management at US sporting goods manufacturer and retailer Nike for Europe, the Middle East and Africa, he is in the front line of ensuring a prominent American brand can continue to deliver its promise to customers, and profits to its shareholders.

And yet the core risks to business continuity that concern him most are workaday issues.

“The most important thing for us is to protect the supply chain,” he says, “making sure that customers get the products that they require at the right time in the right place.”

This down-to-earth assessment of the chief hazards to continuity at Nike is fascinating, because it puts the headline hazards in context.

Nike has been criticised for labour conditions in the factories of its low cost suppliers and, like every iconic US brand, could be a focus for those who vent their spleen on US foreign policy against assets of its corporations.

Says Mr Taylor: “This is an underlying issue for any US domiciled business. One of the things we like to think is that through sport and sports sponsorship people connect with the brand in a way that they would not, perhaps, for McDonald’s or Coca-Cola.”

Since joining Nike three years ago, after a career that began in insurance underwriting and spanned risk management roles at US contractor group Bechtel Group and jeans maker Levi Strauss, Mr Taylor has overseen a classic risk management strategy.

From Nike’s regional headquarters in Hilversum in the Netherlands he and his 15-strong team have focused on so-called Tier 1 risks: spanning environmental, safety and health issues at the region’s 174 facilities, ranging from stores to a massive distribution centre.

"Today’s generation of business continuity specialists are working with a much broader spectrum of management"

These elements are then broken down into issues of security, business continuity and insurance and claims. The core aim, he says, is to prevent incidents happening in the first place, but then to ensure there are back-up plans in place to ensure business continuity should an event occur. “If something does happen, we have an emergency plan to cover most eventualities,” he says. This too will have three parts: crisis management, business recovery and finally workplace or information technology recovery.

Picking out any single overriding threat to business continuity is impossible, he says. “There is a raft of things that could happen,” from an incident at an external transport contractor to a warehouse fire.

Every conceivable possibility has to be assessed, ranked and, if necessary, planned for. “We continuously and constantly analyse different risks and, working with the people in the business, assess their possible impact,” he says.

Most of the consultation is with operational managers. Language difficulties across such a culturally-diverse region preclude direct consultation of shop floor staff, though Mr Taylor will walk through the facilities to assess possible hazards.

Where there are significant costs involved, he has to persuade his bosses to stump up the cash to protect against them, and put in place contingency plans to ensure continuity.

“Generally management are pretty supportive,” he says, “but we have to support our ideas and explain why we want to behave in a particular way.”

That explains why he reckons good communication skills are essential to a good business continuity manager.

That and resilience. “Often, what we do is not seen as a priority,” he says. “There is often a view that it has never happened, so it will never happen.” So determination and persuasion are needed to ensure business continuity planning is accepted and implemented. That is particularly true, he says, because of the way risk management and business continuity planning are evolving.

Where once companies focused on insurable risks, today’s generation of business continuity specialists, better trained and resourced, are working with a much broader spectrum of management colleagues, from health and safety specialists to the legal department and brand protection executives.

“Risk management and business continuity are becoming more professional,” he says. Nike has yet to suffer any serious continuity threat in its Europe, the Middle East and Africa region. Yet the company is determined not to be caught out.

“Risks are continuously evolving,” says Mr Taylor, “and so is our planning”.