How Can Morale Be Kept High During Lengthy Turnarounds?

“I’m so tired, and I know you are too, of talking about fixing this business,” Nike’s CEO Elliott Hill told staffers, following last week’s announcement of a bleak forecast, in a bid to shore up morale.

“I want to move to inspiring and driving growth and having fun,” he added, according to a recording reviewed by Bloomberg News.

His blunt comments came after Nike warned that quarterly sales would continue to fall for the rest of the calendar year, briefly sending the company’s shares to an 11-year low.

Hill told his employees that while progress is being seen in North America and in the running category, other parts of his strategy “took longer, way longer than I’d like.”

Hill, a Nike veteran appointed CEO in October 2024, has faced numerous obstacles in his quest to return Nike to growth — including needing to liquidate massive quantities of Air Force 1, Air Jordan 1, and Dunk inventory after prior management became too reliant on the classic franchises. Nike has also had to repair relationships with wholesale partners after fixating on direct-to-consumer for several years. It also faces newer competition from newer brands — including Hoka and On — as well as weakness overseas. The restructuring has also included several layoffs.

He added, “I hate to lose, and we’ve got work to do in some of these places.”

Turnarounds in Retail Can Be Turbulent, But a Steady Hand in Leadership Is Key

Nike is far from the only brand or retailer facing a longer-than-expected turnaround effort.

A Harvard Business Review article — “Keeping Morale Up During a Turnaround,” featuring a number of turnaround experts — suggested the key to maintaining team morale during difficult times is leading with empathy, transparent communication, frequent recognition, and fostering employee empowerment.

“During a turnaround, keeping employees motivated isn’t easy,” said Patti Sanchez, chief strategy officer at Duarte, on LinkedIn. “But you can make their journey smoother with clear, timely, and caring communication.”

Peter Cuneo, who has earned credit for turning around Marvel and Remington Products, believes fixing a company’s culture is critical in executing a turnaround… but it takes employees up to the task. He said on a Harvard Business Review podcast, “My experience is that most human beings have a very hard time being inside a turnaround because it’s scary. You don’t know what the future is. And it takes a certain type of person that will be comfortable with that risk, usually because they see what the rewards could be, particularly financially.”

He likewise promoted the value of being open with staff about progress, noting the staff “would rather hear bad news than no news.” However, he said any communication and body language coming from the c-level has to remain optimistic.

Cuneo said, “If things aren’t going well, you can go home and scream in a pillow. That’s cool. I won’t say that I haven’t done it, but you’re on stage. You’re literally on stage. And even in the case of bad news, you have to be projecting a positive image and optimism.”