Business Strategy and Football – mirror images


Before my son started to play football, I barely knew much about the pigskin sport, America’s game. As a college acquaintance once said, I graduated through 4 years of college without knowing what constituted a “down”. Unfortunately, I could no longer feign ignorance when my son began to play the sport as linesman, move to center, then started to punt and kick, and finally groomed himself to be a quarterback. During his football position progression, I started to understand the elements of the game, — whether I cared to or not—by borrowing from my knowledge of business strategy and seeing the many commonalities.

All throughout this experience, I saw how America’s game became synonymous with great business management techniques and strategy from startups to mature companies. I looked at coaches as if they were CEOs. I viewed the coaches, teammates, and the skills they added to the team. I sought trainers for my son to improve his QB skills, in the same vein in which how senior managers are groomed. Now armed with this football knowledge and experience, I became sufficiently knowledgeable of the game that I now can determine by the quarters, the players, the coaches, reaction to plays, even to the extent to determine whether that team will win or not based on the many ingredients on what makes a company successful.

To every decision there is cause and effect. Bad decisions might lead to systemic failures if consistent throughout the course of the year. Enough bad decisions, then the senior management team must be replaced. Or, even a football coach with too many, frustrating losing seasons. In the past, I myself had recommended to the majority shareholder of a New York company that the whole senior management team be removed because they continuously made “bad calls” in the span of a year. Recently, I could see how a single bad call by my son’s football coach in the last quarter led to losing the semi-final game in the playoffs. Similarly, I have observed bad decisions by senior managers or CxOs play the role in missing the quarter’s sales targets. Did the manager fail to launch his products on a timely basis? Did he react to flagging sales? And if this football coach has previously made such poorly thought decisions before, I question whether the high school football team could win a divisional title under the leadership of this coach.

Hence, the more I learned about American football, the more similarities I saw between that sport and the ability to run a successful business – whether a startup or a publicly traded company. Both can learn from each other for the roadmap to success. In fact, when I look at publicly traded companies, I apply the same football logic to identify the more successful corporations, assist successful startups, implement corporate development tactics, and design business strategy.

Hierarchy – There is the unquestionable hierarchy in a football team. We should start first with the Coach, who is no different from a CEO. The Quarterback becomes his corporate President. And like any deeply run organization you have an offensive coordinator, who in the business world would be the chief marketing officer. You also have the defensive coordinator, who could be the CFO or the General Counsel, since you have to control your losses somehow. Of course, a football organization has many coordinators, trainers, etc., and there seem to be a counterpart in any business. From the executive suite to the mailroom, there is a manager taking charge within a subset of the organization. As an example, I have even met someone in charge of putting together PowerPoint presentations for Wall Street firms. In professional football, someone is in charge of putting together the pictures after each offensive play. Equally true within football teams— coaching staff, special teams, offensive players, defensive players, kickers, punters, and soon, have some expertise to contribute to the success of a team.

Execution of milestones – Just like a company’s fiscal year is measured by quarters, so are football games divided into quarters. Milestones must be met. Instead of the 60 minutes (40 minutes for high school) dedicated to a football game, a company has a year to tabulate results. And within each quarter the football team has “downs” to complete; 4 attempts in which to reach 10 yards or more all the way to the end zone. The team must move the 10 yard chain or relinquish the ball. Relinquishing the ball before reaching the end zone is a statistically unacceptable for a football team. Equally true a corporation must achieve certain milestones within each quarter or the marketplace will begin to treat the management as a failing team. A Wall Street friend once commented that a company must “under-promise” and “over-deliver” to be viewed positively by analysts. Or it fails in front of its analysts. Sounds familiar?

Strategy and Tactics — And both business and football rely on strategy and the underlying tactics to achieve it. Prior to the game, a football coach studies films to evaluate the strengths and weaknesses of opponents. He then considers the strength of his team and what should be practiced prior to the actual game. He considers many variables such as the nature of the stadium – grass or artificial? Indoor or outdoor? Cold weather or a windy day? Does the opposing team have great passing skills or a better running game? To quote Sun Tzu, “Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” Any business also has to consider many factors usually encapsulated in the SWOT analysis, part of the strategy. A business leader must look at his management team, economic resources, his potential competitors, his marketing, and so on. And then measure his results through tactics and implementations.
Then, we return back to the 4 attempts to accomplish a “down.” You have so few attempts to prove to shareholders that you are directing the company in the right direction or lose investors’ credibility with a depreciation of the stock valuation. Are there examples where we observed this phenomenon? Kodak, Bank of America, and Polaroid to name a few. The investors for these companies have become disenchanted when senior managers propose their plans, fail to materialize tangible results. That disenchantment is reflected by the share value. And all comes from the success established from the strategy, or failure to do so.

In football’s half time, the coaches reconsider the strategy and analyzes other means to defeat his opponent. In business, the CEO must re-evaluate the successes or failures every quarter. Failure to do so will mean defeat.

Adaptability — The most successful football teams as well as successful companies have something in common – the ability to change its strategy in the middle of the game and finally win, even if it is the last quarter. They all rely on a finely tuned management team that can implement a successful strategy or adapt a change when circumstances warrant them. Each player is dedicated for a specific purpose with the exception of the Quarterback, who is charged with implementing the strategy. Both organizations are undoubtedly hierarchical. But both successful groups are flexible enough to adapt in the middle of a game. In football, one such team is the New England Patriots. The Patriots team, when encountering a failing first half strategy, redesigns its strategy by the second half to achieve victory. In business, Apple bears this reputation.

Secrecy- Another characteristic in football to business analogy is its secretiveness. In attempting to look at practice sessions for a local college team, I found that a local college football team severely restricted any spectators with paperwork so ridiculous, effectively limiting watching practice sessions only for immediate family members. Companies also enjoy their secretiveness, which require NDAs, include in Employee Manuals the need to secrecy and keep information on business operations or products within company property. Does anyone recall when Apple inadvertently left behind an iPhone sitting at some restaurant’s counter and quickly Apple dove with an army of lawyers to retrieve it? Does anyone recall the Patriot Belichick’s videos on the practice sessions for an opponent and how the opposing team reacted?

Competitive Analysis — Now, for every product or for any new initiative, an operating officer or president of a company must consider how to deal in the competitive environment and re-position the product in months. Similarly, a Quarterback looks at the defensive line, determines the “defensive coverage”, and decides in seconds how he is going to penetrate that line and move the chains, before the play clock runs out. (A defensive “coverage” is the formation used by the defense to cover the offensive play. There are basically seven coverages with multiple variations.) Part of the quarterback’s decision is based on studying the films of that opponent and how it reacts to an offensive line or motion. Tsu again: “Know thy self, know thy enemy. A thousand battles, a thousand victories.” Successful businesses acknowledge that there are competitors. Every company has vertical or lateral competitors – actual or potential. What leads to success it is to spot them, evaluate them, and outmaneuver them – no different for the QB’s identifying the football defensive coverages and challenging them.

A parent had once asked me about my opinion of a starting QB’s ability to win and I replied that he had too many interceptions. I doubted that he would carry the team to the divisional championship. True enough, on a key time during the game, that same QB had his throw intercepted, eliminating the team during the semi-finals. Interceptions, I added, are the result of a) inability to spot coverages, b) “telegraphing” the throws, that is, allowing the opposing players predict where the QB is throwing the ball by how the QB moves and looks, or c) throwing the ball so inaccurately from lack of training and practice. Good QBs as well as great senior managers are trained to effectuate their completions or tactical successes. Tom Brady is exemplary of such QB preparations: studying films of opposing teams extensively to predict their coverages, continuously improving his throwing motions for greater accuracy, and moving himself within the pocket to disguise his throws to his receivers. Senior business managers should learn from this example. A senior business manager has to prepare for every week, prioritizing the work to increase revenues, reduce costs, review the competitive landscape, and interact with the customers.

Speed – Speed in business in achieving results is a major key to success. It indicates that you have correctly determined the tactics and the route you’ll take. It means that you are well prepared and informed. It means that the every angle has been thought of. Part of what senior managers establish is chronological milestones – time frames to achieve each and every element of a business initiative. In football, the Quarterback must move the chains to the end zone. Everything is measured in seconds and in yards. The football team must succeed quickly and hold unto its lead. Football teams pride themselves of having the fastest receivers, the most accurate quarterbacks. Equally true a business executive must act quickly on the opportunity or lose it to an opponent. He must not make mistakes, for mistakes represent additional financial costs as well as time to achieve the corporate milestone without sacrificing speed of execution. Too many and the results are revealed on the bottom line by smaller margins.

Leadership – One of the most important characteristics of a good QB is his leadership skills. During the 2011-212, we have witnesses that the absence of a great QB can weaken a team, and the opposite has been true in this football season. A great leader and QB elevate the quality of the players around them. In the past, I found this true in business. In my personal experience, I noted that my staff stayed around for longer hours, than for other managers without being asked. My staff remained for the so-called 9 yards just to complete an important task. Leadership by example becomes an important ingredient for any winning team – in business as well as football.

Mistakes – As one football movie commented, football is about inches. In many ways, a winning football team makes the fewest mistakes. A company must mitigate its mistakes in implementing a strategy. First, it can be financially costly – whether a failed attempt for an acquisition when breakup fees can run in the billions of dollars. Second, it questions the credibility of the management team… whether it carefully assessed all of the variables that might impact the transaction. And the more mistakes you make, Wall Street begins to discount the value of the stock. In football, the lack of credibility is symbolically represented by football fans wearing paper bags over their heads.

In football, you reevaluate every year your players, seek new ones. After so many years, you start to replace the coaching staff when the plays are predictable and the team seems jaded. In business, one CEO replaced 10% of his underperformers. Another element in great management is to have every employee committed to the strategy at hand. How does one see this in football? I notice that the best high school teams in Virginia consistently rose to the top because a great experienced coach made sure that every player was well trained for his position and the athletic and experience depth of his roster was deep enough to cover every situation. I noted that the least successful coach relied on a handful of players, who, while the game progressed, were not capable of playing through the 4 quarters. That team might win a few games, but as the season progressed, it would not be capable of winning the division. I see the same analogy in startups – because a startup without every employee buying into the program cannot not succeed.

Finally it is about winning in football, or as football coaches love to say, winning is not the most important thing – it is the only thing. For a company to survive it must be ranked in the top three of its industry, or will not survive. A financially successful entrepreneur friend told me that when he started his company, he faced 40 or more competitors. After a couple of years, 5 were left. When he sold his company to a publicly traded corporation, he was the only company standing. As such, he got a financial reward that allowed him to take time off for his next enterprise. It is all about winning the Super Bowl or, in business terms, achieving the exit strategy. So in the end, the ‘Exit Strategy, must be defined up front so that all the players (‘stakeholders’) know what they are working so hard for, constantly measuring their milestones….And everybody should see this ‘incentive’ – on a personal level….from the guy in the mail room, the players on the field, to the coach and, ultimately, the businessman/women who frequently owns the team and, yes, runs it as a business similar to a football program!

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About Juan Ramón Zarco, SVVGP 胡安•雷蒙•扎尔科

Juan Ramon Zarco, 胡安•雷蒙•扎尔科, Silicon Valley Ventures Growth Partners llp, Hygieia Healthcare Technologies Company, AllRest Technologies LLC, Crimson Growth Partners LLP, jrzarco2001@yahoo.com, is an experienced as CxO, General Counsel and Secretary to public and private companies with global operations. Established track record of producing practical, revenue-focused solutions. As Counselor and Secretary, demonstrating vision, integrity, and sound business judgment, to CxOs. Managed complex, strategic transactions, M&A, contracts support, PE Financing, IPO, SEC compliance, Corporate/HR governance, IP licensing, Budgeting, Staff, outside counsel management, International market access strategies, Domestic & foreign government relations and advocacy. Creative in designing and implementing market access strategies. Practices law beyond conventional model with low-overhead and project-based fees. Effective at managing departments, formulating marketing strategies, balancing budgets, and implementing cost-saving measures. Extensive in-house and private practice experience, advising clients on commercial, corporate, international business, and technology law and policy. http://www.docstoc.com/video/89135472/make-your-business-an-international-presence; http://www.youtube.com/watch?v=fx5gijf3yoc For Sprint, he managed iDen international development in Southeast Asia, Middle East, and Africa, and contractual issues with Verizon. In Private Equity, he worked with Pegasus in vetting international investment deals and interim President for portfolio companies, such as Data Foundation, a data storage company, handling marketing, strategy, fund raising, and accounting. Before Pegasus, Mr. Zarco, as CLO and V.P. of Corporate Development, played a principal role in the structuring, international expansions for 2 telecom companies, U.S. Cable Group and Viatel, Inc. in financing and M&A deals exceeding $200 million. Mr. Zarco earned a J.D. from NYU Law School, M.B.A. from Cornell, and B.A. from Williams College; is fluent in Spanish, Portuguese, French, and German, with working knowledge of Russian, Arabic and Japanese.
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2 Responses to Business Strategy and Football – mirror images

  1. Thanks again for the blog article.Really thank you! Keep writing.

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