Business Leaders: Luck and knowing when to audible
This weekend I was watching the end of the USC-Stanford game and as it became clear that Stanford was going to prevail for the fourth contest in a row, the camera showed a student holding a sign which read “Luck had nothing to do with it”. I smiled at the witty sign, which was a wordplay on the fact that the Cardinal was going to win even though they were heavy underdogs because their star quarterback, Andrew Luck, had left for the NFL this Spring. And then, as happens frequently, I found myself thinking about how much business and football have in common. Luck certainly plays a role in both, but while you can mitigate its potential influence you ultimately cannot control it. Both can also be complex, so you better clearly understand what factors contribute to your success and how you can maximize your chance to win.
Sticking with college football, you have 105 players, up to 85 of which may be scholarship positions. You may have those players for up to 4 years, but success can actually draw them away to the NFL early. Teams have over 30 distinct positions, and they line up in dozens of offensive and defensive schemes to execute 100 different plays with several hundred variations. There are a lot of factors at play: talent, opponent intelligence (film), environment (fan support, crowd noise, etc.), weather, field position, immediate goals (“down and distance”), opponent scheme and talent, etc. All players have an important role, but it is especially critical that the coach and quarterback work together. The coach is responsible for putting the quarterback in the best position, by recruiting and developing the best talent, putting together an effective playbook that can leverage the team’s strengths and highlight the opponent’s weaknesses, and ensuring everyone is mentally and physically prepared to play. The quarterback must lead the team, recognize if they are lined up for success of if they should change the play, and execute on the call made. While all of these capabilities can be improved with continuous repetitions, the ability to understand when the matchup is unfavorable and to call a good audible play as an alternative that differentiates an exceptional quarterback from the rest.
Business Leaders as the Coach
To be successful, business leaders must play the role of both coach and quarterback. They have to select and develop a good team, and they need a ensure that both they and their team have a clear understanding of what needs to be done to address customer needs and competitive threats. This alone is becoming increasingly difficult, because product cycles are shortening and expectations are changing faster than ever. Unlike football, it’s not about simply wanting your team to score more points than the other team – shareholders may pressure you to enter a new market, launch a new product more quickly, or want some other “game changer”. It’s critical, however, that you know when to “call an audible” and exploit an opportunity. And again, this is very difficult. I’ll explain why, and tell you what you can do about it.
In my experience, senior executives have an excellent grasp of what factors contribute to their company’s success – at least with respect to their own functional area. They understand how various product components, or process steps contribute to that success, and they can usually tell me in from memory in terms of margin, net, or gross. And they spend a fair amount of each quarter looking at opportunities to squeeze additional efficiencies out. What they are frequently not very good at, is understanding how situational adjustments can create benefits beyond the immediate proximate trickle down, and they are not very good at identifying dynamic opportunities to capitalize on momentary competitive leverage. In other words, they are not calling audibles, they are simply trying to make the called play work as best they can – even if more promising options are available at that time. If you think hard about this, I expect you’ll recognize having seen this behavior very frequently. Of course in business, as in football, you need to be in alignment with other managers on when you can call an audible, what options are acceptable, and how you it will be communicated.
In summary, leaders have to put themselves in the place to begin with by building a great team and making sure everyone has a clear understanding of their objectives, roles, and processes. They also need to be looking for opportunities and ready for change – not just from within their functional area but from other areas as well. This is one of the key differences that separates the good from the great. And if you need help understanding just how you do this, just let me know. I assure you it is a real game-changer.