The world's largest sneaker maker is shaking things up, as Nike announced on Tuesday that CEO Mark Parker is stepping down in a few months. And while Parker's replacement has plenty of experience as a CEO, he learned his first leadership lessons as a teenager in a summer job "drinking beer at 7 a.m."
John Donahoe — a Nike board member who is the former CEO of eBay and the current chief executive at enterprise software company ServiceNow — will take over for Parker as CEO of the $145 billion company, effective at the start of January 2020, Nike said in a press release.
The 59-year-old Donahoe boasts a successful career, but Donahoe has said he learned his first "two great leadership lessons" when he was still just a teenager working a summer job for a beer distribution center company.
After graduating from high school in the Chicago suburbs in 1978, Donahoe landed a summer job from the father of a friend who said he could "make good money" as an assistant at a beer distribution center for the now defunct beer brand, Schlitz.
Donahoe wrote in a 2013 LinkedIn essay that his job description for that summer gig "would include 'joining the teamsters, driving a truck poorly, and drinking beer at 7 am.'"
In fact, Donahoe wrote that he did have to join the International Brotherhood of Teamsters in order to secure the job in a Chicago warehouse, where he'd arrive at 6:30 am to assist beer delivery truck drivers with the task of unloading and delivering cases of beer to distributors around the city.
"This was an all-cash route and some of the stops weren't safe," wrote Donahoe, who noted that one driver "carried a gun in his sock and would leave me locked in the truck" because his regular assistant was in the hospital because someone "hit him over the head with stolen beer."
"So the job had potential risks, but it also had definite perks," according to Donahoe. When a driver noticed the future CEO was uncomfortable on one delivery trip, he cracked open a couple of beers for them to share to break the tension. "I was 18 years old, it was seven in the morning and I was thinking, 'This is the greatest job ever.' (18 was the legal drinking age at the time.)," wrote Donahoe.
"In retrospect, that summer unloading beer taught me two great leadership lessons," Donahoe wrote on LinkedIn. "First, I had to get along with many different types of people. And rather than wishing they were like me, I learned from their diversity, their approaches to their job and the different ways they interacted with me."
In other words, that experience taught Donahoe to never write someone off just because they might seem different from him. Donahoe might have been on his way to study economics at Dartmouth and earn an MBA at Stanford Business School, but he still had plenty to learn from his fellow warehouse workers, whose guidance and patience he relied on in order to survive his summer job.
"Today, when I meet people, I routinely ask: 'What [are] this person's good qualities and what can I learn?'" Donahoe wrote. "This is one of the most powerful tools I have available to me as a leader. People intuitively know when you are looking for the best in them—and that it is critically important in creating followership."
The second leadership lesson Donahoe learned that summer came following a dangerous incident where a driver let Donahoe drive a delivery truck into the warehouse. The teenager made a bad turn and smashed into the doorway, causing "thousands of dollars of damage." However, the driver covered for Donahoe and smoothed things over with the warehouse chief, who told him not to worry about it.
The lesson he learned was trust, Donahoe said. The driver in question "showed me something incredible in the moment he stood up for me. He communicated his belief in me. He took responsibility. I spent the rest of the summer incredibly motivated to do the best job possible," Donahoe wrote.
In 2013, Donahoe wrote that the second lesson still inspired him to use a leadership principle he called "Presume Trust."
"People think you have to earn trust, but that mindset reduces team effectiveness," Donahoe wrote on LinkedIn. "Instead, why not presume trust until someone does something untrustworthy? In doing so, you approach colleagues with the understanding that we are all on the same team. Presuming trust communicates support, motivates everyone and ultimately makes everyone more successful."
After college, Donahoe started working as an associate consultant for the consulting firm Bain & Company, and he later became that firm's CEO in 1999. He used the "Presume Trust" theory at Bain, and later at eBay, where he was CEO from 2005 to 2015.
Now, Donahoe is getting ready to take over as CEO of Nike (where he's served on the company's board of directors since 2014). Parker been in that role since 2006 and earned more than $13.9 million in compensation in the 2019 fiscal year. In documents filed with the SEC on Tuesday, Nike said Donahoe will receive a signing bonus worth $45 million in stock and cash in 2020, and he could earn $18.5 million annually in base salary and performance-based bonuses.
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