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Risk Taking

February 14, 2012

The June 22, 2009 cover story of Business Week which I just reread was titled “The Risk Takers.”  It featured businesses which during difficult times, instead of playing it safe, placed bets on some gutsy new strategies.

To make a point, the author used an illustration that we can relate to here in Michigan.  I paraphrase:

Imagine a driver on a snowy night.  If the car starts to slip, the driver’s natural instinct is to slam on the brakes and jerk the steering wheel in the opposite direction.  But the laws of physics advise the opposite:  laying off the brakes and steering into the turn.

The author reports that from 1985 to 2000, the average merger in an economic downturn created an 8.5 percent rise in shareholder value after two years; while the average deal in good times resulted in a 6.2 percent drop in the buyer’s share value.  In other words, mergers – one of the biggest, boldest moves in business – do better in bad times than good.  Much better, in fact.

It wasn’t recklessness this article was celebrating; it was risk taking – daring to be aggressive, rather than just defensive, amid a weak economy. Steering into the turn, so to speak.

Just like the winter driving analogy in the article, we who are involved in school sports in Michigan can relate to the big idea of the article because we too made some of our biggest moves at our bleakest times. The MHSAA retrenched in some ways, but the greater theme as we climbed out of our bad times of 2008 was that we made unprecedented investments in new technology.

Today MHSAA.com is the website of highest traffic and MHSAA.tv is the website with the most productions of any comparable organization in the U.S.  And all of these investments in technology during those bad times have allowed us to undertake the ArbiterGame project now that will provide all member high schools the electronic tools necessary to make their tough tasks of school administration more streamlined than ever before.

Continuous Work

July 6, 2015

Since we posted the blog below on May 16, 2014, we have observed that major portions of the NCAA’s sanctions of Penn State have been overturned for being beyond the authority that member institutions have given the NCAA. This reminds us of the need to have our own organization continuously working on rules and penalties, and the authority to make and enforce such rules and penalties, that may become necessary in the future for the ever-growing range of issues we confront in school sport.

We take no comfort when leaders of sports on other levels get embroiled in controversy; but we do try to learn from those situations.

For example, we watched very closely in 2012 how the National Collegiate Athletic Association responded fast and with force to the horrific sex abuse scandal at Penn State. The NCAA may have ignored its prescribed due process and exceeded its penalty authority, winning mostly praise from the public; but now the NCAA is mired in litigation over the legality of its swift and severe actions.

We are currently observing what could be a similar scenario for the National Basketball Association. Its commissioner moved quickly to impose a lifetime ban and other sanctions after racist public statements by an NBA team owner. While most people have praised the speed and severity of the commissioner’s actions, some people note that the recent racist remarks were not something new for this owner and the unprecedented penalties may be the subject of a lifetime of litigation.

The lesson of these situations for leaders in other places and on other levels is to be especially cautious about using power in popular ways. No matter how horrible the transgression, no matter how angry it makes you personally, follow the established rules of procedure and keep within the limits of your explicit authority.

I confess that this can be frustrating and that I have sometimes felt paralysis more than power when performing the role as MHSAA investigator and penalizer. But some of that frustration may be my own fault. If such frustrations are too common, we should be reworking the organization’s Constitution and rules, with the members’ agreement, to streamline process and strengthen penalties.

Significant steps in this direction have been occurring. For example, in May of 2013, the Representative Council adopted the athletic-related transfer rule; and on May 4, 2014, the Council increased the maximum penalty for undue influence from one year to four years for both students and adults.