In the highly competitive corporate domain, team sport metaphors are often applied to business. There are common themes – teamwork, competition, and will-to-win. But what can organisations really learn from professional team sports? Are there really enough similarities, or are the differences so large that the metaphor actually becomes misleading?
Here we present an interaction with Dr. Julian
Birkinshaw, Chair and Professor of Strategic and International Management
at the London Business School. Dr. Birkinshaw examined these issues in www.ceoforum.com.au
Question: What can business learn from professional team sports?
Julian Birkinshaw: In both cases, you bring together a group of people with different skills, to achieve a particular objective. The beauty of sport is that the whole process is very transparent: the objective, the need for teamwork and the results. It’s a kind of goldfish bowl, within which you can study the effects of particular leaders and/or approaches.
The second aspect is that using sport provides a way to get important management ideas over to the wider public..
When you put ideas in the context of something the public feel passionate about, however – like football – people get more engaged.
Question: But can’t the whole analogy with sport and business be overdone? Are results, for example, as clear-cut in business as they are in sport?
Julian Birkinshaw: When you push on the metaphor, you can see parallels and you can see differences. With results, in business you are usually addressing multiple stakeholders – customers, employees, shareholders etc – whose interests are not always aligned. In sport, the fans, players, owners etc tend to have the same interest – winning! There is also an issue in business with short-term and long-term results that arguably doesn’t apply to sport in the same way.
Another point of difference is the absence of disruptive technology in sport. In sport, the terms of competition are much more clearly defined – who you play, what the rules are, what equipment is permitted, and so on. There is, of course, a lot of tactical innovation within those constraints, but its still within the same overall framework. In business terms, this is more of a sustaining than a disruptive technology, by definition.
Question: In sport, your competitors are clearly defined. Yet in business this is not always so.
Julian Birkinshaw: Right. Michael Porter has pointed out that, for effective business strategy, you need to broaden the idea of who your competitors are. You customers are your competitors, because they are competing for your margins. Some customers you may be both competing with and collaborating with. Your suppliers are your competitors, for similar reasons. You may also have competitors you don’t even know about.
Question: How about motivation? If I’m a CEO of a large company, I need to communicate a message to possibly thousands of people, with varying degrees of motivation. As a sports coach, I’m dealing with, at most, dozens of elite, highly motivated sports people.
Julian Birkinshaw: The approach to motivating and communicating with people has to be different. Even in the best companies, you will never have the same levels of skill and motivation in your employees as an elite coach has in his players. You simply don’t get that same level of passion and enthusiasm to do whatever it takes.
The role of the business manager is much more about creating a shared vision and motivation. In elite sports, that is pretty much assumed. It’s much more about working out how to get there.
Question: How about the issue of CEO/coach delegation of decision-making?
Julian Birkinshaw: If you look at Eriksson, for instance, he delegated many of his most important tasks to his various assistants. The process is very much one of “I have my strengths and weaknesses, so there is certain things I should do and certain things I shouldn’t. If I’m not the best person to do the half-time talk, for instance, I should delegate that to someone who is”. I think this is also very good advice for a CEO.
I think there’s a cultural dimension to delegation, which I highlight in the book. Swedes in general are much more consensus-driven and egalitarian. They focus more on the collective than the individual. This means they will listen to anyone, regardless of rank, in developing a solution. They will also try and get consensus around that solution.
The Anglo-Saxon countries are, generally speaking, more hierarchical, more ego-driven, and more stress is put on being seen to behave as a leader: the one with the good ideas, and the one who implements the good ideas. The point here is that delegation can be quite hard to do in this context because it is pushing a bit against your inclinations.
Question: What about the point you make about tactical simplicity of Eriksson’s approach? What’s the message here for business?
Julian Birkinshaw: I guess the message here is that “the more complex the world gets, the more simple the strategy has to be.” Detailed planning simply doesn’t work in very complex systems – look at the old command economies in the former Soviet bloc.
When things are simple, and stable, you can map out your strategy to some extent from the centre. But as the world becomes more fast-moving, this becomes less tenable. What you need to do is lay down certain parameters, and then give people enormous freedom in figuring out what they need to do.
Question: What can business learn from sport in dealing with failure? Everyone agrees failure is instructive, but very few people want to actually acknowledge and deal with it.
Julian Birkinshaw: In the case of professional sports, failure is transparent. There is nowhere to hide – the scoreboard shows everything. Equally the chance to redeem yourself comes relatively quickly – there is always next week or next year! Sports people are pretty straightforward about admitting and confronting failure.
In business, goals are less clear, so its harder to know if you have actually failed. You also have more excuses – it’s a tough economy now, our competitors are struggling, and so on. Failure is much harder to see in business – often you don’t realize the magnitude of it until it’s too late. Perhaps it’s too easy in business to make excuses. There is this culture of denying failure, which ultimately doesn’t serve the business.