A suspension bridge and a tree are unlikely inspirations for sneakers. But over the last year, Nike demonstrated that designing with both technology and sustainability in mind can transform everyone's performance—that of designers, athletes, even suppliers.

While the Nike Flywire—super-lightweight footwear stitched cable-style with threads stronger than steel—was killing at the Olympics, Nike's Considered initiative raised the bar for green apparel design. CEO Mark Parker, who started as one of Nike's first footwear designers 30 years ago, explains that when it comes to innovation, there's no finish line.

It's rare to see a designer at the helm of a company. How does that influence the way you run Nike?

I try to make sure that design always has a strong voice in helping to set strategy. The nightmare for me is that design gets subjugated to some short-order cook in the backroom listening to sales, responding to the retailer's demand of, Well, that worked well last season, so we need to do more of it. That's not how you advance.

How do you make sure great ideas don't get lost at a $25 billion company?

We've reorganized the company into more contained categories. Now, instead of having design over here and marketing over there, each sport is organized like its own entrepreneurial little company. If I took you over to the skate area, you'd feel like you were at a skate company, complete with tattoos and piercings. But a great idea should live beyond each category, so you've got to have good peripheral vision. I love to support designers who have a passion but are nervous about putting it out there because it's not a fully developed idea. If we support those things, you watch them grow into something that can have a huge impact.

Nobody knows this, but we used to be the largest MP3-player provider out there. I remember talking to Steve [Jobs]. He said, "Why the hell are you guys doing MP3 players? It's not your core business—maybe we could team up?" We had this notion about connecting their iPod with our shoes and have it speak to a runner, give them real-time feedback. The level of innovation with NikePlus will get even greater this year.

Last year, Nike announced pretty audacious goals: By 2011, every pair of sneakers will meet your Considered standards (reduced waste and toxins, designed for disassembly). How realistic is that?

People ask us, Why would you push so hard with sustainability when the economy is so bad? To us, this is a long-term commitment that will put us in a better, more competitive, more profitable position.

For example, to reduce waste, we've created this new modular design, with component parts that can be interchanged not only for aesthetic purposes but for functional purposes as well. With Considered, we have the opportunity to impact the 250 million pairs of shoes we make annually, and potentially share what we've learned with the industry.

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