Memorandum
- From
- Derek Weston via Fortune | FORTUNE
- Date
- Filed
- Business·4 min to read
- Re
How long should a CEO get to turn around a struggling company?
ReHow long should a CEO get to turn around a struggling company?
Nearly two years into Elliott Hill's tenure at Nike, the question of how much time a CEO should receive to prove a turnaround is working has become central. Research suggests transformations take years, with early signs of progress in North America offering some evidence of success.
Nearly two years after Elliott Hill returned to Nike as CEO, his tenure has brought a familiar question to the forefront of corporate leadership: how much time should a leader get to prove a turnaround is working? Executives brought in to revive a struggling company often inherit problems that accumulated over years, yet face pressure to show improvement within quarters. Hill's case illustrates the tension between immediate expectations and the slower reality of corporate transformation.
Hill inherited a Nike in 2024 that was grappling with weakened retailer relationships, excess inventory, slowing innovation, and declining cultural relevance. Since then, he has restored wholesale growth and strengthened the company's performance running category. However, Nike Direct and digital sales have remained weak, the Chinese market continues to struggle, and the stock has lost the enthusiasm that initially greeted his appointment. The mixed results highlight the difficulty of judging a turnaround while it is still in progress.
Research on corporate transformations suggests that expecting an immediate recovery is unrealistic. McKinsey has found that roughly half of a transformation's value is realized in the first 18 months, with the remainder coming later. Spencer Stuart's research offers a more detailed timeline for evaluating a CEO's progress. The firm describes the first year as a launch period, when new CEOs face a steep learning curve, tackle inherited problems, and make decisions that shape their tenure. By then, a leader should have a credible diagnosis, the right team, and clear strategic priorities.
The second year becomes a period of calibration, when boards and stakeholders can look for movement in measures such as customer retention, product momentum, market share, and operating performance. By around year three, those early decisions should increasingly translate into stronger revenue, margins, and returns. Hill is now far enough into the job to assess whether his early decisions are producing results, and the evidence is mixed but not without promise.
Simeon Siegel, senior managing director at Guggenheim Partners, argues that North America provides one such test. Nike's largest region was among the first parts of the business to struggle, but it has returned to low single-digit growth. Siegel notes that critics of Hill's performance should acknowledge this progress. The question, he argues, is whether that improvement indicates Nike has found an approach that can eventually work in other regions facing similar problems. If so, it may simply be a matter of time before the broader turnaround takes hold.
A turnaround does not have to be complete for a leader to make the case for more time. There should, however, be evidence that the decisions made early in the process are producing results. For Hill, North America provides some of that evidence. Whether Nike can replicate that progress elsewhere will be the next test of his leadership and the patience of those watching.
