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What can sport teach the business world?

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It isn't unusual these days to read about how much sports management could still have a lot to learn from the business world. Theories, concepts, models that have proven to be efficient in corporate companies that the sport world could use, adapting them to its own needs with the constant objective of improving performance. But what about the opposite for once?

It is a fact that sport provides the best success stories of all. Great teams that have been leaders in their own leagues for decades in a row. Leagues that for years provide the best quality games in the world. Or younger teams or organisations that have only been around for a short time but through a series of smart decisions taken by a handful of key, focused leaders with a vision, have risen to the top of their sport in just a few years. It doesn't matter: sport has always been a source of inspiration for those who are hungry for great success stories, including the business world. So the question is: is there something sport can teach the business world?

What can sport teach business?

With its permanent load of uncertainty and constant intangible factors influencing its outcome, what can sport really teach the business world? Are there any recurrent concepts in winning sports organisations that can be identified, conceptualized and put into a theory that the corporate world could make good use of? In his book Peak Performance: Inspirational Business Lessons from the World's Top Sports Organisations, Prof. Clive Gilson (et al.) of the Waikato Management School of New Zealand comes up with an answer to this question. And it is an unequivocal "yes".

After having studied in great depth nine successful sports organisations, including Team New Zealand, FC Bayern München, the NY Yankees and WilliamsF1, over three years, the authors have synthesized their learnings and propose a management model that can be profitable to the business world. A model that can also be of great value to other sports organisations that share the same objective of becoming "peak performance organisations" (PPO).

The PPO theory they propose and that we will describe below is made up of the four following principles:

  1. Purpose
  2. Practice
  3. Potency
  4. Performance

1. Purpose

Purpose provides the intent, the meaning and direction for the people within the organisation. It is the dream that is created within the organisation that will then be shared with every member.

The dream is the image of an ideal state or destiny for the organisation that provides meaning and recognition for the individuals who work there. It makes people want to belong to the organisation by bringing a sense of collective importance. Family members become emotionally linked to the organisation and are ready to make great sacrifices (physical, financial) to achieve the dream. This is a crucial common point in all PPOs.

But this dream needs to be turned into action. It must be imaginable, feasible, important and exciting. Of course, it must be measurable. The US Women's Soccer Team has set out to win all the major international soccer tournaments. This provides them with a clear focus, which is the third concept here: a PPO defines its greatest imaginable challenge and then puts all its energy in to focusing systematically on achieving it.

The focus of a PPO is to concentrate all its energy on actions necessary to achieve the organisation's purpose. It involves identifying specific actions to be undertaken and it clarifies priorities and everyday tasks.

2. Practice

It is crucial to understand that the principle of practice chronologically follows the principle of purpose and its identified focus. The focus will establish direction and priorities from which the practice or the structure will be established.

Practice is first about telling all (internal and external) about the organisation's dream, history, legends and traditions. This provides the meaning. Making the dream real is achieved by constant storytelling, which, in leading sports organisations is most often done by charismatic leaders.

Second, sport PPOs succeed in creating a strong sense of family. They all manage to create a calm, relaxed and informal environment that facilitates the mental clarity necessary for performance, by exceeding personal best. The family satisfies its members' basic need for security, mostly financial of course. Also, people might come and go, but they never really leave: collective knowledge stays in house.

Leading sports organisations have a phenomenal record of employing the very best (very often internally promoted) and when they go, of replacing them with others of equal or even greater ability. Physical and financial infrastructure need to be strictly aligned to the identified focus, and need a certain stability in order to achieve excellence.

3. Potency

Potency is the necessary energy, the drive, the engagement that needs to be present in the organisation to sustain peak performance. Many of the top performing sports organisations naturally have this "stamina", because they are constantly looking forward to the next match, the next competition, the next championship. Businesses can lack this kind of potency but sport can teach them a lesson or two about what it takes.

It takes passion. People in the organisation need to be emotionally connected, committed to the organisation. This is achieved by the collective celebration of success and the constant celebration of those who have contributed to it.

It takes harmony. Sport PPOs have created harmony because they have a clear focus and people working for them have the feeling that they are able to participate in it because they are part of the above mentioned family. People in PPOs are mutually supportive, and the challenge they are constantly facing is not too hard to reach, and not too easy. It is a "just right" challenge.

4. Performance

In all sport PPOs, a clear purpose, a careful practice and a developing potency are all prerequisites for performance. The sustaining of these first three principles are almost always a reason from successful performance.

But performance needs to be constantly challenged. PPOs challenge performance by constantly making radical changes to the rules, the league, the players, the game itself to enhance their ability to renew the challenge. These incremental improvements are constant ground-breaking ideas. Creativity is key, and in PPOs mental space is created to allow for individual and group creativity.

Performance is also subjected to perfection in every aspect of the running of the sport PPO. Each organisational process is seen as vital by all members of the family and information flows freely between them. From the improvement of the product to the delivery to the client (sponsors, spectators, etc), all activities are constantly reviewed. If these reviews show that a change in the processes themselves is needed, the change is made without hesitation. In a PPO, everyone is looking to constantly exceed organisational best, and it is all natural given the fact that each of its family members have the energy, the will and the "potency" to constantly improve

Where should one begin?

PPOs were not made overnight. The key in establishing PPO principles is to get the right people to do it. Charismatic leaders, or "inspirational players" are always the ones who, one way or the other, have succeeded in sharing their passion. By sharing their passion, they have dreamt a dream that has become a model to follow by "family members" who have, as a team, succeeded in making it real. There is no magic formula to a sport PPO. It starts with a dream, a dream that once it has become a reality, is constantly renewed by those who want to keep it alive.

The next edition of TSE Commentator will return in more detail to some of the key points mentioned above.

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