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.
Planning & Doing
January 31, 2012
One of the MHSAA’s counterpart organizations in another state recently asked to see the business plans of other statewide high school associations. Some of the states supplied their detailed budgets, but most had nothing to offer.
Of course, a budget is a much different thing than a business plan. A budget is built more on past performance, while a business plan looks more to the potential of future problems and opportunities. A business plan is much more than numbers.
Since 2007 we’ve been using a “Mission Action Plan” (MAP) at the MHSAA. It was developed to deal with the opportunities and obstacles of three powerful trends: (1) growth of non-school youth sports programs; (2) expansion of educational alternatives to traditional neighborhood schools; and (3) proliferating technology.
While not a typical business plan or a classic “strategic plan,” the “MAP” has become increasingly useful to point the way for the MHSAA both in terms of program and finance. The MAP states a single “Overarching Purpose;” it identifies four “Highest Priority Goals;” and it lists four multi-faceted “Current Strategic Emphases,” many of which have quantifiable performance targets, including financial goals.
Next to each Current Strategic Emphasis are two boxes. The first is checked if we’ve gotten started, and the second is checked when we’ve completed the task or are operating at the level we had established as our goal. At this point, every MAP strategy has been launched, but only a portion have earned the second checkmark.
Quite efficiently, the MAP keeps us both strategic and businesslike without the formality of purer forms of strategic or business plans.