Sports and business — strategic similarities

There are vast similarities between business strategy and sports; let me tell you my story.

Before becoming a strategy consultant with the KPMG Global Strategy Group, and before my Management and Organisation studies at Hanken, I was a professional footballer for 12 years in the top flights of five countries. I am now enjoying my second career, and I want to take this opportunity to share a few reflections – explore a common thread, if you like, on how organizations can manage short-term turmoil without losing course, and contribute some thoughts on how this common thread can be developed into executable strategy.

 

Both short and long-term goals are important

A strategy enables companies to tie their everyday activities to their mission, vision and values. In sports it materializes as a process of balancing long and short-term targets, since, as we all know, in team sports the focus is inevitably directed towards the next game, which is always the center of the universe.

Long-term evolution requires the discipline and buy-in to act in compliance with a predesigned plan, in which certain strategic elements endure in both bad and good spells. I know very well how the atmosphere in football clubs changes with the result of the last game. After a loss in Hungary, for example, one of the owners announced that the players are to be fined by the amount that would have been the bonus for a win. Following a derby win three days later, he insisted on champagne for everybody in the locker room. That is an extreme case of impulsive leadership and it might not be the optimal approach. But the reality often is that, regardless of the means, ever-improving results are needed in order for clubs to earn the privilege to worry about the long-term targets.

On the other hand, a strategic long-term plan provides the backbone for the much desired wins.

On the other hand, a strategic long-term plan provides the backbone for the much desired wins. Clubs like Barcelona, New England Patriots or Tappara will not easily abandon their characteristic style of play. This common thread from one season to the next is much more likely to produce a competitive sustainable advantage than constant change. In my experience, this symbiotic balancing between the long and short terms is an integral part of corporate business success, as well.

 

Identity and origin of strategy

No too long ago, I was a spectator at a game featuring my old club, FC Utrecht. Even though it had been a while since my last visit, I knew that they would frenetically press the opposition from the very outset of the game. That is in the DNA of the club and represents a common characteristic that all stakeholders in and around the club are proud of. In my view, the common thread between sports and business is that ‘if a customer does not know what a company stands for, and what its core competences are, he or she is less likely to buy into that company’s products or services’.

In my view, also, Michael Porter (renowned American academic at Harvard Business School) recognized the congruence between sports and competition.

In my view, also, Michael Porter (renowned American academic at Harvard Business School) recognized the congruence between sports and competition. Just as companies need to analyse segments, megatrends and the competitive landscape, and seek to understand and develop best practices, a football team plans their game in relation to their opponents’ strengths and weaknesses, and, over the longer term, ruthlessly duplicates those methods that have led to success. This requires meticulous analysis, implementation skills, and, most importantly, a strategy that ties the needed changes into the organization’s current capabilities and identity.

But the view of Porter and his followers has somewhat overshadowed the idea that strategy can also develop within an organization, out of things it does well, with less initial planning. Ajax, for example, had a brilliant strategy as far back as 50 years ago, without probably even thinking explicitly about creating a strategy. They managed to create an environment and atmosphere where brilliant minds could flourish, which led to the creation of the “total football”. Clarity of values, vision, mission and purpose, i.e. the club’s common denominator, enables its players, coaches, scouts and management to gradually develop intrinsic knowledge and even create a platform for something revolutionary to be invented. The stories behind the success of Apple and many other market disruptors stem from similar settings.

To conclude, I recognize strategic similarities between sports clubs and corporations in that, for each of them, it is just as important to find the right balance between long-term targets and short-term wins, and between rigorous analysis of the environment and tangibly building upon one’s own inherent strengths.