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.
Our End of the Pool
June 26, 2012
The six-year veteran CEO of PepsiCo, Indra Nooyi, told Fortune magazine’s Geoff Colvin in a June feature, “Courage in leadership is very difficult, especially in today’s world, where the media doesn’t take time to really understand you.”
We can relate to this in our work in school sports, as very many veteran sports journalists and broadcasters have retired or been downsized, replaced by staff who are fewer in number and relationships and weaker in institutional knowledge and professionalism.
Whenever I read, watch or hear news accounts concerning topics that involve our work and about which I know a lot, I can see how incomplete and inaccurate the reporting is. This has always been true, but now is much more obvious; and this has made me even more skeptical when I read through other topics about which I know less. How much of this is opinion, not fact? What facts are incompletely presented? What “facts” are just plain wrong?
In this environment, it’s risky for leaders to step out with new initiatives; and it’s even riskier to defend the status quo, for the establishment is routinely presumed to be wrong by media who now often lack subject-matter depth and historical perspective.
Still, it remains the leader’s role, according to Jim Collins in Great by Choice, to not just predict the future, but to go out and create it anyway – in spite of criticism by media who have little experience swimming in our subject matter and who are merely wading into the shallow end of our deep pool. Sometimes creating the future means doing something new and different; but just as often – perhaps even more so – it means defending something whose existence helps to maintain the very essence of educational athletics.