As leaders we all attempt to create something bigger than ourselves. We understand the role isn’t that of maximizing our individual contribution, but instead to optimize the outcomes for our broader team/organization. In industry, that process can be muddled, difficult, inconsistent, impacted by external factors, and a million other variables that make envisioning and executing a long term strategy to optimize our team seemingly impossible at times. All those factors can also make us lose sight of or focus on what is within our control.
This is where an example from outside of a business context can be helpful. As a sports fan, you quickly realize that owners and management in all sports face similar problems to us in many ways. There is much outside their control that can undermine their ambitions, often in a very public way. That being said, if you know what you are looking for, you can see strategic leadership very often in the sports world. As a fan of teams who have had both awful and amazing ownership, I thought sharing a recent example (that is in the sports news every few days right now) could be an interesting case study in setting and implementing a strategy in a highly fluid, variable environment.
The process for new management/ownership in sports and in business is fairly predictable:
- Develop a clear “why” you are leading/owning your franchise
- Create goals that are aligned with that why, in both the short and long term
- Deeply understand the environment you are operating – the proverbial rules of the game
- Build a strategy that fits the rules of the game/environment and aligns with your goals
- Balancing short and long term goal attainment
- Allowing the organization to act unencumbered when an opportunity presents itself
- Consistently focus on finding solutions focused on “and” instead of “or”, especially falsely binary decisions
- Refine that strategy as the results come in and/or the environment changes
One of the most interesting examples I have seen of this in sports in recent years was the moment in 2020 when Steve Cohen agreed to and bought the New York Mets (my favorite team). In a day, they went from one of the worst ownership situations (the prior owners – the Wilpon family – ran the team as if they were running a regional softball league team and that was before they were fleeced by Bernie Madoff) to one of the most interesting. Cohen is both the richest owner in MLB (no small feat) but, more importantly, he is a huge fan of the team he bought – it wasn’t just an investment, it was a passion for him. That makes his approach all the more interesting when you think about how we approach leadership of a new team/organization – it’s often both a role and passion for us too.
Develop a clear “why” you are leading/owning your franchise
Mr. Cohen was well aligned with the above. In his initial press conference after the purchase he laid out his why in a couple of statements (paraphrased):
He stated that he both wants to win championships and be an integral part of the community, calling owning the team a ‘civic trust.’ Essentially, I’m doing it for the fans. I can make millions of people happy, and what an unbelievable opportunity that is. I’m not trying to make money here…It’s really about building something great, building something for the fans, winning.
Create goals that are aligned with that why, in both the short and long term
With that as a foundational “why” he bought the team, the goals were pretty obvious:
“I’m going to be an owner that builds a team that has continued success. We want to win now, but are also building for the long term. I’m not in this for a short term fix. I’m in this to build a sustainable franchise. I don’t want to be good one year and bad for three years.”
“If I don’t win a World Series in the next 3-5 years – and I’d like to make it sooner – that will be slightly disappointing”
So on day 1 as the leader of the franchise, Mr. Cohen declared why he wanted to be the owner/leader and laid out concrete goals for the organization, including time frames. Clarity in message and intent. A north star that everyone should work towards – this isn’t a 10 year rebuild nor is it a sprint to make one good team that falls apart.
Deeply understand the environment you are operating – the proverbial rules of the game
After that first day, the organization began to work towards that vision by improving their understanding of and utilization of the environment they operate in. The operational environment includes not only the team on the field, but the support staff – baseball management, coaches, scouts, analysts, medical staff, organizational operations, multiple minor league teams with all the above, etc. In the barely 2 years of his ownership, the Mets have upgraded nearly every facet of their organizational operation – new management, new coaches, drastically expanded scouting, rebuilt analytics, broadened medical staff, etc. They’ve went from a technological and analytics laggard to a leader. They became one of 2 MLB team to invest in cutting edge machinery that can mimic opposing pitchers, for example. (Does it work? Who knows! But if it does, they’ll have an advantage.)
Beyond that, it includes the competitive market – the rules within MLB – both on and off the field. The team has dramatically increased in payroll (more on that later), become more aggressive in the international market for players, and pushed the envelope in nearly every way possible within the rules of the game.
Build a strategy that fits the rules of the game/environment and aligns with your goals
All of this was done in service to a strategy that fits the environment and also aligns with their goals. Clearly, the team wants to compete today while it builds a stronger foundation for sustainable success in the future, just as Mr. Cohen stated. To that end, they have balanced short and long term as best they can by aggressively increasing payroll for quality players the last 2 seasons, while largely avoiding long term contracts with aging players. They have overpaid on shorter contracts to give the team more talent short term without undermining a longer term strategy. While they do have a couple longer contracts, the players who signed them are under 30 today, ensuring they will be with the team in their prime. Additionally, the team has both invested in the minor leagues and player development, but worked to stockpile amateur draft picks to begin to build a talent foundation for the future. They’ve largely avoided trading tomorrow’s potential stars for today’s good players – something the last ownership group did regularly.
In the winter of 2022, the team found itself with many free agents and the need to replenish the roster. The opportunity to improve on a good team from last year was available. Armed with a the richest owner in the sport, the team really showed it’s understanding of the rules of the industry/game and willingness to take advantage of that system. MLB does not have salary cap, but it does “tax” teams that spend more than predetermined thresholds – meaning it makes them pay even more money to the league beyond what it pays the players, and that money is redistributed to the other teams. The team spent hundreds of millions of dollars on many of the best players available. They will pay the “tax” for sure, but they just optimized what they could do with the assets they had: in this case the owner’s money.
As they continue to build their team and their organization, they will continue to focus on “and” instead of “or” as many teams do. They not only paid millions on established MLB players, but also (“and”) signed the most prominent international free agent. They additionally used contractual mechanics to end up with 7 draft picks in the first 4 rounds of the upcoming baseball draft, providing more opportunities to find good young (and cheap) players for the teams of the future. The organization continues to flip over rocks and look for even the smallest advantages by always saying “and”.
Refine that strategy as the results come in and/or the environment changes
All this has been in 2 short years! In 2021, they won 77 games (and lost 85). In 2022, they won 101 games (and lost 61) including a brief playoff appearance. Does all the above guarantee that they will win the World Series as Mr. Cohen has stated as his goal? Absolutely not. There is never a way to guarantee that. But the organization is building strategy to put themselves in a position to have a chance every year. And if/when this doesn’t work, we’ll see if Mr. Cohen and his management team can continue to refine their strategy to give the team it’s best chance to win. Their willingness to attack the problem with such an open mindset gives fans like me hope that they’ll be able to pivot when needed. And if they can’t, it won’t be an issue of resources.
So how does this all translate to you or I? While we are all about $17B shy of Mr. Cohen, we can follow the same process when we are taking on new challenges/teams/organizations. Like the Mets, some of the things we try won’t work (they lost more than they won in 2021 and lost early in the playoffs last year) but with clarity on where we want to go, an understanding of our environment, an aligned strategy, and willingness to pivot, we can consistently give ourselves and our teams a chance to succeed…and that’s why all of us are here.
View from the Middle 