Who is the key person at Nike Golf? The man responsible for the most anticipated golf club unveiling since Callaway’s Big Bertha in 1991?
If you guessed Tiger Woods, you guessed wrong.
No, that person is neither young, trim, nor movie-star handsome, except to his wife [no offense]. He can’t bounce a Nike ball off the face of an 8-iron more than twice. He rarely visits the company’s sprawling, 750-acre campus in Beaverton, Oregon, instead holding forth in a low-slung building buried under the lip of a side street among some scrub oaks and asphalt in Fort Worth, Texas. In fact, the sign out front doesn’t even say Nike.
Meet Tom Stites, one of the last of a dying breed. Stites is a clubmaker’s clubmaker, the man responsible for crafting a new series of drivers, forged irons, and wedges that are the talk of the golf industry. But more than hype, these new offerings will go a long way to determine whether Nike can raise its own bar and become a force as a “total” golf brand.
Yes, Nike makes very good athletic shoes. It owns virtually every category in sports. Except golf.
Nike makes a great golf ball; its two top players won major championships with it. But the company is way behind Titleist, which has dominated that market for years. What, then, makes Nike think it can enter the golf club category and find success? In two words: gumption and Stites. These could be the same word, if you happen to be familiar with the subject.
In the summer of 2000, two of the game’s most innovative minds were introduced. Kel Devlin, who represents Nike to the Tour players, brought Stites together with Bob Wood, the dynamo/president of Nike Golf. Stites had been running Impact Golf Technologies, a boutique operation in Fort Worth, making clubs for Tour players and a few other companies. He had 30 to 40 “wins” on Tour, but because of player contracts, was not in a position to advertise his successes.
Back in the late 1980s, Stites had been an engineer at the Ben Hogan Company, having learned his craft from the legendary Gene Sheeley and under the watchful eye of the Wee Ice Mon himself. He loves to tell the story of the day he met The Hawk. “I was here in the locker room,” Stites begins, standing between lockers at Shady Oaks Country Club, haunted by Hogan’s ghost. “I walked right up and stuck out my hand, telling him how honored I was to work at his company. He growled at me, ‘Just don’t screw anything up.’ Nobody told me that you just didn’t walk up and introduce yourself to Mr. Hogan.”
Stites arrived at Hogan just about the time the first perimeter-weighted forged iron, the Hogan Edge, debuted. He has a willingness to walk where most don’t dare to tread. The same could be said of Nike, which has led more than one observer to wonder whether the biggest sporting goods company in the world could possibly penetrate the golf equipment business, the ultimate old boys’ network. It speaks volumes for Nike’s strategy that one of the most critical moves it has made was to immediately pry its way inside by hiring one of the old boys.
You might question whether Nike is going about things the right way by making a forged blade one of its primary introductions to the club market. But you can’t question whether that iron will be accepted by some of the best players in the game because it already has been, which was Nike’s strategy all along. One of the primary reasons is an insistence by Nike and Stites that things be done their way. Nike’s trademark aggressiveness paired with Stites’s sense of tradition has begun to evolve into a partnership that both parties believe will vault them into the consciousness of golf consumers of all types. “In our Tour support, we operate on the premise that anything is possible,” says Stites, who invites Nike contract players to Fort Worth to bend, grind, mill, and machine their way to happiness before they leave.
“We knew if we had players spend one day in Fort Worth, we could flip them like that,” Wood says. “Not only can we make a set to their specs, but we can make a set that fits their eye. Nobody is doing that.”
Nike has a history of doing things no one has yet done. Ever since Phil Knight and Bill Bowerman poured rubber into waffle irons to make the first prototype running shoes, the company has been a pioneer in whatever category it has entered. It now makes 180 million pairs of shoes a year.
But golf is a different game, and Wood knows it. Nike dipped its toes into the waters in the late 1980s with its first line of golf shoes. Curtis Strange and Peter Jacobsen represented the company on Tour, and Nike sold $8 million worth of shoes in the first 15 months. But it never made much of a dent in industry leader FootJoy’s dominance, primarily because the product was inferior. One prominent college golf coach called Nike’s early offerings “dispose-a-shoes.” The company didn’t get serious about golf until it signed Tiger Woods for an endorsement contract in 1996. But it didn’t have clubs to offer him — only clothing and, later, a ball.
Golf wasn’t making much money for Nike. Even worse, it wasn’t making any noise. Nike Golf needed a leader, and Knight tapped Wood, 47, a company veteran who’d served in a number of capacities, including a stint in the golf division. He was appointed president in 1998.
Wood isn’t your garden-variety corporate executive. Like many employees who work in the 17 buildings on campus, he often reports to work in jeans, sweater, and running shoes. He is an avid rock guitarist and is probably the only top man in golf who knows a Stratocaster from a 7-iron. He can be found in his office — in shorts on summer days — playing his guitar as a respite from the day’s pressures. The corporate culture at Nike is not very corporate. Two buildings on campus are devoted to exercise, and employees are encouraged to use the facilities any time during the workday. There is day-care on campus that takes care of about 300 children daily. In exchange, employees are expected to meet demanding standards. A “work hard, play hard” mentality blends with an us-against-the-world attitude. “We love to compete,” says Wood.
Nike Golf, which operates as a separate business unit within Nike Inc., has brought together a mix of Nike people and golf people. “The ones who don’t know golf are working hard to understand it,” Stites says. Even Wood admits the golf business is worlds apart from what he is accustomed to.
“We haven’t accomplished our goal of being a great golf brand,” he says. “We had to take an outsider’s view looking [in]. When Nike is successful, we always have a position of being inside. You want to know what’s going on at the World Cup? We know. You want to know what’s going on in baseball? We know. You want to know who the next 10 best college football players are? We know who they are.
“It’s our business to know — more importantly — being inside from an emotional standpoint, to the people who really care about the sport and how it translates into the products we make and how we communicate with them. Anybody can say that, but Nike has a history of proving that. People say that Nike is a marketing machine. We’re a product company. The best marketing in the world can’t sell a bad product twice, especially in a specialty sport like golf where you are either trusted or you’re not. You’re either inside or you’re not.”
The fact that Wood recognizes the old boys’ network gives him more than enough incentive to penetrate it.
“When I came into this thing again, we were going nowhere,” Wood says. “We had Tiger, but we weren’t doing a good job. I basically told our people that if we were to disappear tomorrow, rounds don’t go down, sales don’t go down. If we go out of business tomorrow, nobody cares. That’s not like the other categories [at Nike]. We’re 60 or 70 percent of some categories, and in those, if we don’t ship, they’re dead.”
The first pivotal point in Nike’s foray into golf was when Tiger decided to play the Nike Tour Accuracy TW ball. The company blared the news in what has become known as the “hacky sack” commercials, in which Tiger bounced a Nike ball off his (Titleist) 8-iron behind his back, between his legs, and finished off with a full turn down the driving range.
“When we first started working on the ball with Tiger, I knew he’d switch,” Wood says. “I knew it. I had people here telling me it would never work. It was a better product. The ball he was playing was a black-and-white TV, an antiquated piece of equipment. He could get everything he wanted out of his old ball and get everything he wanted out of a new ball. The last thing we changed in the ball was the way it sounded: We digitally measured the sound of his old ball and changed the new product so that it makes the same ‘note’ as his old ball. He was laughing the whole time he was testing it.”
Everyone knows that Tiger has tremendous touch and feel, but the Nike folks didn’t know how sensitive he was. “We gave him four balls,” says Stan Grissinger, Nike’s category product director of golf balls. “He bounced each off the face of his wedge once and told us, in order, the relative hardness of each ball. It was amazing.”
Tiger tested the ball at the beginning of 2000, won The Memorial with it, then appeared at the Nike sales meeting at Sunriver resort in Oregon. He presented Wood with a signed ball and glove and, unscripted and totally unexpected, announced that he was making the switch permanent.
It was Nike Golf’s crowning achievement up to that point and, as a result, its ball sales increased 58 percent in 2000, raising Nike’s share of the very competitive ball market from 1 to 6 percent.
Still, it didn’t mean immediate success for the entire product line. The company had taken a youthful, edgy approach to the early clothing and footwear offerings that centered on Tiger. The look was non-traditional and so far out of the mainstream that the middle-aged golfers who spend most of the money stayed away.
“People looked at (the line) and said, ‘What the hell is that?'” Wood says. “And when they saw where we were trying to sell it, they said, ‘Golfers don’t shop at Foot Locker.’ They take their kids to Foot Locker. They buy their basketball shoes at Foot Locker.
“Golfers do play basketball and run and do other things. But when they play golf, they are in the golf world. We weren’t getting it. We were trying to take our organizational world view and impose it on a group who doesn’t need it and doesn’t care.”
Nike’s education in the ways of the golf business continued in slow, sometimes painful steps. The realization that golf doesn’t operate in the same way as other sporting goods categories has been more than an awakening for Wood and his people. Golf exists and thrives in its own little world, and at the core are the golf-savvy people who do most of the buying and selling.
For all the talk about the golf boom in this country, we must remember that the number of rounds played has been flat for the last 10 years. For every new golfer who comes into the game, one golfer leaves. The number of core golfers — those golf-mad people who do most of the playing and buying — also has remained stagnant.
“Everybody in the golf business, if they’re smart, is targeting the same five million people who play all the rounds, spend all the money, for whom golf is a lifestyle choice and the sport of choice,” Wood says. “If you want to be a great golf brand, those five million people have to respect you. We want them to more than respect us. We want them to look to us for innovation, we want to inspire them, we want to make them laugh, and we want to surprise them on the positive side.”
Wood borrowed a premise that had served him well in other sports: Make products that the best players in the world will use, and the public will soon follow. “One of the ways Nike galvanizes itself is to become associated with the best,” Wood says. “When we were getting into football, one of the first things we did was to sign [college coaches] Bear Bryant, John McKay, Joe Paterno, Bo Schembechler, Woody Hayes, and Lou Holtz. We didn’t even have any shoes. Are you going to take lousy shoes and sit down in front of Bear Bryant? I don’t think so.
“If you sign someone as visible as Tiger Woods, what you do had better work. How would it be for us to have what we do not work, to be disrespected in the golf business? It’s embarrassing, a black eye. The products we were making [prior to 1998] were not good products, they were not good for the market, and we weren’t selling them to the right people.”
“People have been puzzled by our marketing approach,” Stites says. “Why a blade iron first? We worked with David Duval and others to find something they would win with on Tour. Well, he won the  British Open with what we had developed. If we can build clubs for great players to win major championships, that part of the equation is met. Then comes the challenge of making something the average player can have fun with and play better. The single biggest category in that regard is the driver, so we developed a product that could cover every profile.”
Wood refuses to believe that Nike is taking a chance entering the market this way. “I think it’s a good strategy,” he says. “Yes, with the [forged] irons, that’s a really finite part of the market. But the woods are much more accessible. Those woods go from 275 [cubic centimeters] to 350 cc to 400 cc — that anyone can play. We aren’t taking a chance with the driver; with the rest of it, we can afford to be patient.
“What people don’t see are all the ideas we have and our innovation stream that goes out for years. We have three or four incredibly great ideas that we’re cooking on. Clearly, on the iron front, it’s going to be a while before we have the game-improvement [club] done. We have to start with the best. It’s the way we work.”
As an example of the way Nike works with top pros, take Michael Campbell. On a balmy winter’s day last year, he showed up in Fort Worth with two sets of irons. One was his old set, from a previous manufacturer, the other his new set of Nikes. He wanted the new set to perform just like the old. So, Stites’s crew set about bending, grinding, and adding bounce to Campbell’s satisfaction. Stites even told Campbell that he could make him a driver and a 3-wood (fairway woods aren’t available to the public yet) that could draw the ball for Augusta National. “They told me I shouldn’t have promised that,” Stites smiles.
Last April, Wood had two sets of the prototype forged irons at Palmetto Golf Club in Aiken, South Carolina, during Masters week. People crowded around the bags to see. “They were raving,” Wood says. “This product is incredibly simple, beautiful. These things are works of art as much as they are an awesome piece of equipment using better materials. We want to bring a craftsman’s point of view to this project.”
Although Stites is a craftsman, he knows he must stay abreast of technology to keep a step ahead of the pressure to introduce new products as often as twice a year.
“Even in our independent, consulting phase, we spent a lot of time knowing that there would be a big surge in the way technology was used to design golf clubs,” Stites says. “With all that time and all those dollars, we found ways to use computer-aided design and those things had their place. But there has never been a time we could make a golf club without going to the art — grinding, hand shaping, looking down at the club in the playing position. A few people in the Nike group were able to recognize that we had the ability to equate the technology and the art of making clubs.”
So much so, that Stites and company crafted a set of irons with which Duval could win the British Open before they ever sold a single club. This past February, at the AT&T Pebble Beach Pro-Am, Tiger put a Nike driver in play. Company officials say they are “close” to getting a set of irons he will be happy with.
“Can we have a great golf club business without Tiger?” asks Mike Kelly, Nike’s director of golf equipment. “Yes, we can; we’ve already won a major. We have a lot of plans. But if Tiger switches [to the irons], that will be the greatest feat in our history. He’s a complicated player and a tough consumer.”
As is the rest of the golfing public. The powers at Nike Golf are banking that much disposable income will be spent on drivers while players wait — who knows how long? — for a Nike game-improvement club.
“We don’t have to explain the brand,” says Chris Mike, Nike Golf marketing director. “If you are 15 or 55, you know who we are.”
Nike has operated its shoes and apparel divisions on that premise for years. But this is golf.
“It’s a crapshoot, this business,” Wood says. “The equipment business is cutthroat, nasty, the most brutally competitive business I’ve ever been associated with in my 21 years at Nike — by far.
“We’re not sneaking up on anybody any more. Now, we’re a target.”