On the day of Super Bowl XLVIII, it’s impossible to ignore the power of sports to captivate the attention of the world. Few events compare historically to viewership levels and calls for the all-consuming air time devoted by the media to a singular recurring event. Think about it, other than religious or national holidays, only acts of pure terror or wonder attract this much attention.
Irrespective of the team match ups, the pinnacle represented by the Super Bowl offers several compelling lessons to further Business Strategy, though we will overlook the obvious promotional marketing option.
Successful business strategy defines itself as a quest for clear advantage. Sports stories typify this quest and that’s why we wondered about the value of the analogies, given their abundance and frequent invocation. Do they help business leverage competency, inspire confidence and deliver positive outcomes? As usual, participants reviewed in advance a few selected articles (linked at the bottom of this post). These thought starters warmed up participants reflective abilities and helped us frame the conversation as follows:
- A battle of objectives-Winning vs. Value Creation
- Numbering Success
- Beyond the action of “the game”
- Game Changers
The topic was not intended to prove conclusive, and we offer the following post-discussion elaboration of hasty notes for those of you who missed out. Do feel free to add your thoughts and share the responses with others.
Winning Objectives
Undeniably there is a cross-relevance between many sports philosophies and business. Competition and Sports go hand in hand. Opposition, rivalry and contest make up the elements necessary to motivate both players and observers. The experiences of playing or watching sports evoke great passion and focus, behaviors which naturally pervade our lives and make the contests universally appealing. No wonder, sport stories succeed as shorthand references connecting experiences across a series of interpersonal activities including business.
How and do sports’ stories help or hurt business strategy? The context of a game doesn’t exactly mirror the ongoing demands of business. A specific sport’s rules, frequency of play and consistency of playing conditions (e.g. the field, the season, the equipment, ethics etc) make sport’s winners easy to name and likewise test the merits of a particular set of plays or strategy. Business by contrast strives to eliminate ambiguity and standardize its rules and apply them consistently. The result is the frequent restatement of results which makes the parallels to sport that much more divergent.
The context of game doesn’t exactly mirror the ongoing demands of business. For example, is the business of business to win, or create value? Does strategy offer greater value when it focuses on generating general or more specific outcomes?
The delimiters present in sports—the field, the game, the season –all make possible two fundamental self-sustaining attributes:
- Emotional fervor, and sheer adrenaline fuels high performance in individuals, teams and fans but is impossible to sustain naturally.
- Measurable relationships easily established between actions and rewards—both tangible and intangible .
Business strategy in contrast struggles with these issues and looks to sports for inspiration while persistently under playing the value and resists imposing similar clear and consistent delimiters.
For example, the value of a win, though always significant accumulates in sports but often dissipates in business. To get the points, make the down or win the game rarely engages and rewards employees directly as it does players. To deliver success, employees need more sustainable incentives.
How a business measures or tracks a win or a loss differs dramatically from sports. It also differs within industries or within an organization based on the business unit. Are forecasters held accountable for their targets in manners equal to sales professionals? What about wins in customer service versus IT?
Clear outcomes generate stories that rouse emotions to a degree that no numerical analysis of performance musters. Engagement in a given task or play and the survival lesson it produces can motivate both employees and players to focus, as well as extol the importance of each effort. The analogy of surviving a skirmish makes clear connections between the single event’s outcome and its impact on the larger mission.
War analogies and larger battles such as the Super Bowl share common language but differ drastically in participant experience. Isolating a single event and elevating its importance can be an effective motivator, but in business performance goals need to be sustained and ever-increasing.
Sports analogies dominate conversation today may be due to the increasing prominence of the business of sports and the remoteness of common war experiences in many American’s lives. To be successful understood, metaphors need to be familiar to your audience which increases its authenticity and your credibility. These conditions make it easy to turn to sports for help. In a single game, the event stakes don’t carry the same consequences as being a general or platoon leader in battle.
The idea of surviving the skirmish and larger battles may be proper in sports but many business problems are often ongoing. To call for action, any insight the analogy inspires must ring true.
Beyond the action of “the game”
Before any game, a coach and the players generally agree on a strategy.
Coaches help their players gain the knowledge they need to be effective and win. Regular practice, drilled instruction, and constant review raise the level of experience and consistency of individual performance. These factors help coaches recognize the readiness of a player and affect whether to play them in a given game and situation. Since players once they possess the ball often have wide discretion for their actions, the coach’s decisions to play them matters. In business, there’s no overt practice, and few managers and leaders prove effective as coaches, though they remain accountable. In business proven performers get more freedom than in many team sports. For example, players may blame their poor collective performance on decisions made by others, as reported by Darin Gannt.
‘‘That was a changeup,’’ the Chicago Sun-Times reported Brian Urlacher said. ‘‘I don’t like coming out of the game. But he’s the head coach. So I do what he says.’’
Few people close to the details willingly write or disclose these facts, or their reflections in a timely manner for fear of repercussions. There’s greater value to silence and avoids becoming the subject of wider scrutiny. Sure, there are some wonderful tell-all stories even if they tend to be extreme– great failures and great successes. It’s no wonder that everyone confuses tactics and strategy. the failure of planned plays in both business and sport always depend on both the player capabilities and circumstances. The difference isn’t just whose calling the shots, or is it?
Admittedly different sports offer different learning opportunities for business, but in general business could benefit from more post-mortem reflections on the game and analysis of play.
Organizations that do demand routine project reflection, write and publish them at least internally demonstrably outperform their peers. Still, the number of organizations who have embraced this practice exemplifies the larger ambiguities that are rampant in business. Of course, sports isn’t immune to the fall out that comes to their industry from these stories but not to the extreme and speed with which the market punishes business.
Numbering Success
Numerous performance indicators exist in both business and sports. In sports, wins and losses are common denominators of success for both players and teams. Regularly, new scorecards and metrics attempt to track and match up players within an organization or rank the organization in an industry. The quest for more data and more metrics has led to the rise of numerous successful businesses.
Numbers try to provide great performance inspirations but fail to rouse people at the level of a great story. Using alternative statistics to recruit and balance a team ‘s capabilities and diversity of skills plays out in both arenas. Michael Lewis and his compelling story Moneyball heralding the quants’ efforts in baseball to change the dynamic of the game, proved to be an ineffective strategy. Sports management quickly learned that an over-reliance on more statistical data missed the things that trained scouts or observers of real behavior historically captured. Situational competence, summarized in statistical measures still requires a great deal of domain knowledge to properly interpret and produce winning combinations. Either may be sufficient to generate a strategy, but both are necessary to create effective strategies.
These lessons, business sadly discovers slowly and fails to fully embrace even in the wake of the colossal market disruptions caused by internet and mortgage back investing bubbles. Moneyball profiled the underdogs and arguably changed the consciousness of average America about the power of data analysis, a welcome message to Chicago quants.
Another key lesson was the use of underutilized information to plea the case for alternative strategies.
The NY Times story that second-guessed the NFL coaches we read illustrates the common decision-making tension data analysis presents to both sports and business leaders. The wide availability of data made it possible for the NY Times to create an accurate predictive model and demonstrate punting’s value punting in the fourth quarter, an impulse Coaches rarely heed. A response by Ditka in the comments that follow reminds modelers that the model fails to consider what people in the game may know about the particular event that may be missing from the analysis–may being the operative phrase and tension point.
Clearly, quants have their place but good decisions always include some domain knowledge. The access to information makes it easy for competitors to rely on the same information and in fact, that’s part of why the law of averages continue to pan out. Statistics are wonderful reference points but one still needs domain knowledge to recognize what made the outlier an outlier.
Important to understand boundaries or the difference between situational competence and domain Knowledge. Sports metaphors can help more people think differently when used effectively.
Game changers
The business of sports creates value regularly, but what about sport itself?
George Steinbrenner purchased the Yankees at the low point of their competitiveness in 1973 for $8.7 million. According to Forbes, the teams’ worth was $1.7 billion in 2010, at the time of his death. Steinbrenner was the first to grasp the handle of the free-agent market and he made it work for him. In effect he made the rules they all had to live by and he dominated the game. He made offers to players they couldn’t refuse. Mike DeGiovanna writing for the LA Times explained that lavish spending on free agents became investments that helped fuel five world Series Championships since 1996. His willingness to pay the premium for exceeding the league’s salary caps allowed them to keep a winning streak. Under his tenure, the Yankees started a television network and built a new stadium.
“The bottom line is he put great players on the field, and he delivered championships,” Cashman said. “He built something the fans can be proud of, and that’s what a great owner does.” (see )
Discussion Takeaways
In business turnarounds, surely the numbers matter but they are often not the deciding factor.
Steinbrenner’s leadership style and strategies show how it’s possible for a single individual to usher in sweeping changes in an industry.
When it comes to Big Data, it’s important to differentiate situational vs. statistical know how. The premium value attached to Baseball statistics could easily explain why Alex Rodriquez got kicked out, because his drug enhanced performance was screwing up the stats.
Business can learn a lot from Sports. The ready availability of numerous statistics offers a baseline and yet one still needs to overlay good judgment. Efforts to track results may bring you closer understanding the true nature of a problem’s structure. Numbers balance your intuition and know how. They may clarify your findings, but in the end performance is a blend of art and science.
Steinbrenner’s decision to reward players so heavily for performance may have changed the game but it also made it more lucrative for players to juice. Be careful what lesson you take.
Sports analogies can be intimidating, to those who don’t fully understand the sport or make the connections storytellers perceive as relevant.
Increasingly Sports has taken to applying business analogies to improve its own game, its own business performance. None the less some of the greatest quotes come from sports players, e.g Yogi Berra. “I like the moment when I break a man’s ego.
Business is a long-term effort toward an ever elusive goal, while sports and sports management operate in a much more limited, shorter term horizon. The lessons don’t offer much assistance or inspiration for sustaining success over longer horizons.
Sports has its Black Monday, the day in January when poor performing coaches often get cut. No singular day of reckoning in business though the swift reaction after annual earnings may produce a similar response.
ARTICLES
Journalism second guessing NFL coaches
http://gigaom.com/2013/12/06/awesome-a-new-york-times-bot-is-second-guessing-nfl-coaches-on-twitter/
be sure to check out the comments and remark by Ditka.
NASCAR second guessing
Adopting analytics
http://www.sportsbusinessdaily.com/Journal/Issues/2013/08/12/Opinion/Sutton-Impact.aspx
Think Tank: sport and business are not a good fit
Communicating your strategy
http://gbr.pepperdine.edu/2010/08/communicating-your-strategy/
Optional:
Focus on Game Changer—short video for investors in sports
Notes on Strategic Management Practices 