Elliott Hill loved Nike and left It. Now he’s back as CEO

Elliott Hill started working at the sneaker giant in 1988 as an intern, taking calls from customers and moving boxes in a warehouse. Over more than three decades, he climbed to be one of its top executives before he was passed over for CEO and retired in 2020.

On Thursday, Nike announced that Hill was coming back, this time to take the helm of a struggling company. Its current chief, John Donahoe, is retiring after making strategic blunders that caused the company to lose ground to competitors.

The decision to change CEOs and bring Hill back was led by Nike’s 86-year-old co-founder, Phil Knight, who is chairman emeritus and the largest individual Nike shareholder, said a person familiar with the matter. Just a few months ago, Knight had expressed support for Donahoe.

Starting in October, Hill’s job will be to undo recent mistakes and lead Nike’s turnaround.

He faces steep challenges: The industry is increasingly fragmented. Rivals like Hoka and On are taking market share from Nike’s core running category and its lifestyle offerings. Another hurdle will be managing key franchises like Air Jordan and Dunk, which Nike oversold in recent years. Nike is cutting back on new releases under those models in an effort to engineer scarcity. Executives warned in June that the move would likely hurt the company’s sales growth rate.

Another big task is rebuilding the company’s culture, which deteriorated over the past several years as restructurings and strategic missteps took a toll on employee morale. Hill is emblematic of a culture that Nike veterans hope to see restored, but it will be hard to convey the message to the company’s more than 80,000 employees, former executives say.

“I know things haven’t been easy, and we certainly have taken our fair share of shots," Hill said in a memo sent to staff Thursday. “Being at the top and being the best has never been easy." In a video shared with staff, he asked employees to rally together and “move with speed and a sense of urgency."

A Nike spokesman said Hill wasn’t available for an interview because the company is in a quiet period ahead of its quarterly earnings report on Oct. 1.

The announcement of his return immediately boosted employee morale—and Nike’s stock price.

Fixing a corporate culture

Hill, 60, is known as a warmhearted Nike veteran who identifies with the rank-and-file because of his 32-year experience at the company. While Donahoe’s leadership approach leaned heavily on consultants, Hill embodies Nike’s culture of dreaming about changing the world, former executives say.

In his video to staff, Hill said if he had to dream of being an athlete, he would choose to be the anchor leg of a 4 x 400 relay. Even though he isn’t a fast runner, he said he welcomes the idea of being part of a team and the pressure of finishing a task.

Hill wasn’t a track star. He earned a bachelor’s degree in kinesiology and worked as an assistant athletic trainer for the Dallas Cowboys.

He had his first encounter with Nike when he was a graduate student in Ohio, where a Nike executive named Tim Joyce came to speak. Hill asked him for a job, then chased Joyce for about six months until Joyce hired him as an intern in the company’s regional sales office in Memphis. The rookie salesman started on the apparel side of the business, with a tough job selling neon and Lycra to shoppers in Oklahoma and Texas.

Hill rose through the ranks to hold leadership positions in North America and Europe. He was promoted to president of consumer and marketplace by former Nike chief Mark Parker in 2018, after Parker’s potential successor, Trevor Edwards, resigned during an investigation by the company into complaints by female employees of a boys-club culture.

Hill was one of the leaders who later gathered with employees as part of an initiative to encourage men to be better allies for their female co-workers. During one of the meetings, Hill shared details about his Texas upbringing by a single mother and told employees he wasn’t at the company because of the brand or the products. “I’m here because of the people," he said at the gathering.

Second comeback plan

This won’t be the first time that Hill has worked on a comeback plan for Nike.

In 2017, he stepped on to a stage in Nike’s Beaverton, Ore., headquarters before a room full of investors. Nike was struggling as North American shoppers snapped up shoes by rival Adidas, but Hill, then a senior Nike executive, was optimistic. He and his colleagues presented a strategy that would shape the future of the sneaker giant for years to come. The company’s plan: double the number of new product launches, halve the time it took to develop new products and sell directly to consumers through its website and apps.

Hill led the part of the plan focused on expanding the company’s direct sales to consumers and reshaping Nike’s partnerships with bricks-and-mortar retailers like Foot Locker.

Hill was among a small group of executives who were passed over in 2019 when Donahoe, a Nike board member, was selected as the company’s next CEO. Hill retired the following year.

When the pandemic hit in 2020, Donahoe accelerated the digital sales push to reach shoppers stuck at home on Covid-19 lockdowns. He soon ordered an aggressive exit from longstanding bricks-and-mortar retail partnerships that Hill had helped build.

Donahoe’s push for digital sales and overreliance on Nike’s cash-cow franchises such as Air Jordan and Dunk worked initially. But ultimately the strategy backfired, and the company’s sales growth hit a wall.

Hill has said that aside from his mother, Nike’s Knight is the person he has tried hardest to make proud. When Hill is asked what makes him proud, he points to the people with whom he has worked at Nike.

“Watching people around me grow, develop and be successful and know that I hopefully had a role in identifying, helping develop those individuals into who they became," Hill said in a podcast interview last year.

As he spoke, his eyes teared up.

Write to Inti Pacheco at inti.pacheco@wsj.com