The Business of Air – Lessons in Achieving Exponential Growth

I saw the movie Air this weekend and man, it was great.  Air is the story of how Nike and Michael Jordan became a brand match made in heaven.  I love sports movies and I love biopics and this was kind of both, but also neither.  Mainly it is a master class in great business ideation and execution.

In the movie, which stars the dynamic duo of Matt Damon and Ben Affleck, among many others, Matt Damon plays Sonny Vaccaro, a scout for Nike’s anemic and about-to-be-cut basketball division. He is a basketball savant and knows more about the sport and more people who live in the sport than most; despite that, Nike had repeatedly tried and failed to build a basketball sneaker franchise around any materially big stars in the sport, losing time and again to Converse and Adidas, who had far and away more market share and credibility with athletes.  Jason Bateman and Chris Tucker round out the basketball leadership team at Nike, and they know their department is nearing doom for lack of results.  In 1984, when the movie takes place, Nike was known as a running shoe company and that seemed to be its eternal destiny.

Ben Affleck plays Nike founder Phil Knight, delivering a pretty hilarious rendition of this very quirky but smart dude.  Knight is portrayed as someone who at first seems to have lost his edge; Vaccaro thinks that Knight has been reduced to pandering to an unseen Board of Directors and has abandoned the set of company “rules” that drove Nike to the $1 Billion in sales and recent IPO. But in the end, Knight delivers the goods.

The crux of the story is this: Sonny Vaccaro decides that the key to the basketball division’s success, and his and his colleagues job security, is to sign a then rookie player named Michael Jordan, who had just been drafted by the Chicago Bulls after a winning showing at the 1984 Olympics.  It was a big bet.  While we all now know that Michael Jordan is one of the most successful sports figures of all time, no one knew it then, except perhaps Jordan’s mom, Deloris, who is a key figure in the movie.  We all know the end of the story, but the story of the story is pretty compelling for anyone in a business leadership role.  Here are what I see as the lessons/takeaways:

• Gut instinct is important, but gut instinct informed by experience and data can be pure gold. Vaccaro looks at basketball players like I look at shoes – closely, fondly, and discerningly.  He identifies Jordan as special not just because of a gut feeling, but because he has seen so many players up close that he recognized the potential standout.  Others were not so moved because they didn’t see things the way Vaccaro did but given the massive amount of player data he had absorbed in his career, he knew that has gut was right.

• Having the courage of your convictions is essential, especially when everyone is telling you “No.” Despite Sonny’s conviction about Michael being “the chosen one,” everyone else in the Nike orbit was willing to settle for others.  Michael’s agent told Sonny that Michael wouldn’t even meet with Nike because…why?  Sonny’s colleagues were looking for simpler wins and smaller signing costs.  Sonny’s mentors told him not to bother.  And yet Sonny went all in, not letting the chorus of negativity change his mind.  He was willing to stake his career on the decision and, as a result, he was willing to make aggressive and unusual choices to win.  He didn’t waver, he doubled and tripled down.  And that paid off big time.

By the way, the role of Michael Jordan’s agent, David Falk, is alone worth seeing the movie for – what a hilariously awful human.  The actor who played this role, Chris Messina, should absolutely get the best supporting actor role.

• Understand who the decision maker is and don’t let the middle-men stand between you and that person. When you’re doing a business deal, if you don’t know who is really making the final decision, you are selling in the dark. You can’t tune your story to win, and you can’t be sure you are getting the right information to help you adjust your sales process in real time.  Little matters more than knowing exactly with whom your message needs to land. You can spend a lot of cycles selling to people who purport to matter in the process but really don’t own the ultimate decision.  This is a corollary to the next lesson…

• Understand your customer(s) better than anyone else. Sonny fully understood a few things that others didn’t, demonstrating a clear understanding of who he was selling to, initially and ultimately: First, he knew Deloris Jordan was the key decision maker in the transaction (aka the first customer that needed to be won over), not Michael and not Jordan’s agent. When Sonny realized this and had it confirmed by a couple of sources, he broke protocol and made a beeline directly for Deloris at the Jordan home.  This was likely the most important strategic decision he made along the way to winning the Jordans over, despite its unusual nature.  He met the Jordans on their turf and kindly but firmly demanded an audience.  Then he listened extremely well and acknowledged what was important to the young basketball star and his mother. This got him the critical meeting that turned things around.

The other customer Sonny understood was the legion of young black basketball fans who would be the first likely buyers of the Jordan-affiliated sneakers he was trying to sell.  The interests of this group were a far cry from those of the middle-aged white guys with whom Sonny was generally surrounded.  Sonny tested his theories with the real basketball cultural “influencers” of his time and didn’t just listen to those in his own orbit.  It made all the difference.

• If you think your product is good enough, it probably isn’t. Sonny early on had a key revelation: to get Jordan’s attention, the shoe needed to be built around and for him; that he wasn’t likely to make the Nike choice if they just tried to put the standard shoes out in front of him, as Converse and Adidas would likely do.  For Adidas and Converse, it was about selling their shoes on Michael.  For Nike it became about selling Michael’s shoes, and that meant they had to dream up a new product that hadn’t even been invented before the meeting where Michael and his family came to Nike’s Oregon headquarters. Some of the best scenes in the movie are of the creative director/new product development lead, Peter Moore, throwing caution to the wind to build the next generation shoe for Michael.

• Know the competition even better than they know themselves. In Sonny’s meeting with Deloris at the Jordan home, a pivotal moment is his explaining to her, in crystal clear and ultimately accurate detail, how the meetings at Adidas and Converse leadership would likely go.  He basically gave her an accurate picture of the future, down to the color of the ties, the appearance of the Rolex and the lack of clarity around who would make decisions.  Essentially, Sonny showed her how much he knew and could be trusted, and also how the Adidas/Converse future he foretold would not be inspiring.  When Deloris saw that Sonny’s predictions were accurate, she was open to hearing how Nike could be different.  And Sonny made sure that it would be.

• Superior communication, marketing and branding really matter. This is no place to use the same old tricks or leave it for later – perhaps nothing mattered more than the heartfelt, personal speech that Sonny gave at the Nike headquarters meeting with the Jordan family. Cutting off the usual video montage that Knight insisted be shown, Sonny threw out conventional sales tricks and went for honesty, empathy, and pure emotion.  His compadre, marketing genius Rob Strasser, prepared faux magazine covers showing Michael winning every industry accolade while wearing the Nike shoes, now dubbed Air Jordans in a slick branding move.  The other companies showed Michael pictures of other star athletes wearing their standard basketball shoes.  At Nike, the Air Jordan branding, the personalized storytelling, even the Bulls-inspired color palette, were carefully choreographed to sell the Jordan family on the promise of something meaningful and different.  This contrasted significantly with the same-old story told by the Adidas and Converse teams and ultimately made a big part of the difference in winning the deal.

• It’s important to watch the budget, but you also have to invest some money to make some money. Knight was absolutely committed to staying on budget and would not give Vaccaro an open checkbook, at least at first.  You must respect his focus on costs and good stewardship of capital.  But in the end, when he saw the vision, he opened his wallet and gave Vaccaro much more financial room to make a deal and even agreed to pay the fines that Jordan would accrue for wearing sneakers that were out of compliance with NBA color standards at the time.  Knight’s willingness to invest was particularly prescient when the Jordan’s asked for a percentage of future shoe sales, a revenue sharing model that is standard today with athletes, but which had never been done before the Air Jordan deal.  The bad news:   this deal costs Nike $400 million/year that goes straight to Michael Jordan.  The good news:  that’s a drop in the bucket when compared to the $4 Billion in annual Air Jordan sales, a number 4x the total revenue of Nike in 1984. Knight understood that you can’t waste money, but when you have a great opportunity in your hands, it takes an investment up front to ensure the value is realized.

• Nothing matters more than a high functioning team on a shared mission. Vaccaro spent a great deal of time getting his team on board.  He hand-picked those who would participate in the sales process and ensured they were singing from the same songbook every step of the way. He created a mission, a cause, a “we all live or die together” esprit de corps.  The team was successful not just because Vaccaro was a great leader, though that mattered greatly.  The team was successful because they joined hands and went to war together.  Egos were left to the side.  Lines of authority were blurred and shared.  It was all about the mission and the entire team cared deeply about each other’s ability to fulfill it. Nothing matters more than putting together a team that recognizes the value in every single member and which optimizes for their mutual success.

As you can probably tell, I really enjoyed this movie.  Even if you’re not a sports fan, it is a great story, told well and with real lessons for anyone in business, on a campaign or in a leadership role of any kind.  Lisa says, “Two Thumbs Up!”