In it to win it

Time was when sport was an amateurish business. Contests, competitions and chukkas were conducted in the Corinthian spirit and money didn’t sully outcomes. But sport has now become big, globalised and lucrative, and the wider business community is increasingly envious of this success and keen to learn some lessons.

Just consider the triumph of professional football in the UK. In 1992-93 the average basic wage for a Premier League footballer was £77,000 a year, four times the average salary nationally in the UK. By 2018 that had risen fortyfold to £2.99 million a year before bonuses. Top players now demand in excess of £250,000 per week. Much of the money comes from broadcast rights. Sky’s TV deal is worth £1.71 billion a year, or £85 million a club, with about an extra £1.1 billion from overseas TV deals.

The UK’s other great sporting export, Formula 1, displays similarly impressive numbers. It was sold to Liberty Media in January 2017 for £6.4 billion. Horseracing in the UK and Ireland combined is thought to contribute £5.5 billion to both economies, according to Deloitte. And there are now 34,000 golf courses around the world serving an estimated 60 million players who don their spikes at least once a month.

So what do football, Formula 1, horses and golf contribute to management theory? Why do managers like Sir Alex Ferguson get invited to lecture at Harvard Business School? How do so many retired international rugby three-quarters make such a healthy living on the motivational speaker circuit recounting their past glories? There is a strong desire for those who have enjoyed sporting success to spill the secret sauce.

The team started to make use of antibacterial hand gel to cut down on infections. The team bus was redesigned to improve comfort and recuperation. On the tours, they even carried custom-made pillows around for each rider to ensure a good night’s sleep in hotel rooms. They even rubbed alcohol on the bike tyres for better grip.

Many businesses have picked up on this philosophy, especially in the world of tech. Large quantities of data are ideal for the marginal gains treatment. Google now runs in excess of 10,000 data-driven tests each year in order to reveal small weaknesses and enable small improvements. Every little helps. One such experiment found that by tweaking the shade of the Google toolbar from a darker to a lighter blue, it increased the number of click-throughs. This marginal change meant big bucks.

Marginal gains were not invented by Formula 1 or cycling. They have a long history in engineering and what used to be known as good old-fashioned research and development. In other words: trying something new – innovating – and then refining the results little by little until you come up with something that performs better. Nothing-new-under-the-sun sceptics also note that this approach has clear links with the Japanese concept of kaizen or “continuous improvement” – enhancing every little thing in the manufacturing process

Nick Fry was the CEO of the Mercedes F1 team and is best known for winning the World Championship in 2009 with near-penniless underdog Brawn GP (after Honda had pulled the plug in 2008). He had big corporate jobs with Ford and Aston Martin outside sport before entering F1 and was fascinated to see what there was to be learned. “My first impression was how unruly meetings were,” he recalls. “No agenda or etiquette – just a free-for-all. They even threw paper about. But what impressed me above all was their entrepreneurial drive, their speed of decision-making and a risk appetite that would never be possible in a corporate environment. And it was often their own money they were risking.”

Interestingly, Fry is sceptical about the philosophy of marginal gains. “Marginal gains is just doing your job properly – the day-to-day stuff . It’s the bigger picture that’s fundamental.” Marginal gains may matter but game-changers transform. He continues: “The number one priority that business should learn from F1 is this: get the best people. The best driver, body engineer, IT, accountants.

And it’s not about paying them more. They get the same, they’re just good at what they do.” And how you treat those people, says Fry, is critical. “Don’t ever blame. Blame kills risk. Things will always go wrong and while you cannot have the same mistake happening repeatedly, F1 isn’t a hire-and-fi re business. You have front-line engineers who have worked together for 20 years. If you tell an F1 driver not to crash or else, they’ll comply and brake early. But you’ll never win a race.” People are key to everything: a fast F1 pit stop (the record is 1.92 seconds for all four wheels) isn’t just about endless practice – it’s also down to trust and fellowship between colleagues.

Next? “Accountability. Right down to your interns. Give people a proper job and get them aligned. In big companies you see far too many people second-guessing what the boss wants. In F1, it’s simple – you want to win. You never, ever want to be second-best. There’s no hiding place every Sunday.”

Fry now travels the world on the lucrative speaker circuit and works with e-sports business Fnatic. And he consults, which must be scary for his clients. He laughs: “I would not dream of telling them what to do. I just try to understand their problems and give them a bunch of ideas to consider that worked for me.” And he’s actually scathing about Formula 1’s broader business sense. “Collectively, the teams don’t function well. They’ve done a poor job on marketing. It needs more colour, action, drama, and it just hasn’t modernised like cricket. One and a half hours is far too long for a race. But its weakness is that the winners will always want to maintain the status quo.”

Formula 1 is about teams but golf is, for the most part, a solo effort. It’s in the area of psychology and individual performance that golf has been influential in business – and not just because so many deals have traditionally been sealed by the 18th green.

Back in the 1970s, Timothy Gallwey launched his Inner Game series of books with The Inner Game of Tennis, dedicated to his spiritual adviser, Guru Maharaj Ji, leader of the Divine Light Mission. It sold over two million copies in the US alone. Gallwey, who had become familiar with meditation techniques to improve his powers of concentration, pushed things even further with The Inner Game of Golf. His was a gentle, thoughtful voice that used both science and metaphor to promote the notion that top performance and mental equanimity would emerge if tennis and golf players could just get a grip on anxiety and negative self-judgements. One of his favourite expressions is, “When we plant a rose seed in the earth, we notice that it is small, but we do not criticise it as ‘rootless and stemless.’” 

On court or in the office, players had to get over the legendary “screaming abdabs”, the insistent voice in the head that expressed doubt. “People have more potential than they think they do,” he has said. This applies both in sport and business. With his mantra, “Performance can be enhanced either by growing ‘p’ performance or by decreasing ‘i’ interference,” Gallwey is the true godfather of the modern coaching movement. At 81, having worked with huge corporates such as Apple, AT&T, Coca-Cola and Rolls-Royce, he is still on the motivational circuit. 

Much of what Gallwey advocates is in line with what we now term “mindfulness” – a deeper psychosomatic awareness that is of as much value to performance in the boardroom as it is to your golf swing. This is about allowing the body and mind’s innate intelligence to be freed up and properly focused.

Getting “into the zone” is another oft-heard expression.  Getting into the minds of professionals and teams is what Pam Billinge and her unusual business Equest is all about. The company’s website is straightforward about what its programmes offer: “We help companies develop more effective leaders. We do this with horses and a team of experienced facilitators. The horses do the coaching.”

Equestrianism can apparently teach business a great deal: “A horse isn’t taken in by our public masks, how we want others to see us or how we want to see ourselves. To lead a horse requires authenticity. Without authentic leadership a horse doesn’t feel safe. And when a horse doesn’t feel safe it will let you know. The flick of a tail, the movement of a hoof. Small gestures that might go unnoticed to the untrained eye but not to a trained facilitator. Working with horses enables us to unearth those self-limiting beliefs that would have us lead ourselves from a place of fear, self-doubt or manipulation.” To some businesses – not to mention employees – this may sound like the stuff of HR awayday nightmares, but plenty of serious operators have bought into it, including Nationwide Building Society, management consultants AT Kearney, the London Business School and MAN Truck & Bus. 

Billinge, who trained as a psychotherapist and coach, says, “It sounds quite mysterious but I know it works. I once had a pretty macho group of senior men and one woman from a retail group. From the first introduction, the horses picked up on the tension and started playfighting and intimidating each other. The colour drained out of the group, who thought they were going to be sent in to sort it out. They were curious about the dynamic in the arena. Then one said, ‘That’s like us.’ They ended up talking more openly than they had ever done about leadership and bullying. You achieve a lower level of resistance and defensiveness. That’s one of its powers. They make of it what they will. I don’t interpret.” 

Billinge’s and Fry’s focus on people is echoed by Simon Mottram, the founder of upmarket cycling brand Rapha, which, 18 months ago, was sold to the heirs to the Walmart fortune for £200 million. “It’s all about human beings, not technology,” he declares, adding that there are four main things that business can learn from sport: “The first is mission and a clear sense of purpose. You have to know in crystal-clear terms what you are trying to achieve. Secondly, you must never stop measuring how the actual performance of your business stacks up against the mission. Data gives you that lens. How many businesses relentlessly monitor their KPIs? Thirdly, a sense of having a foe to defeat. I love this. Sometimes I think we lost that a bit at Rapha and I want it back. Of course, we don’t want every rival brand to disappear but the benefit is powerful and it allows you to make instinctive decisions. Fourthly, professional sport has an amazing connection with a broad public: its ritual, its folklore, its DNA, its spectacle.”

This is undoubtedly true. It’s all about bread and circuses, as Juvenal wrote in the 2nd century AD. This is acknowledged by Christopher Satterthwaite, who, having begun his career at HJ Heinz, recently stepped down as CEO of Chime, the international sport, entertainment and communications group. “Welcome to the experience economy,” says Satterthwaite. “Disney understands it, as do the best sporting events. Look at the Madrid Tennis Open, where, for example, women can get their hair done while watching Nadal. Goodwood gets it, as does Wimbledon. Retailers have learned from sport – just look at how Apple does retail, with its understanding of the theatre of a store and the drama of a new product announcement. Next has learned drama whereas maybe M&S has still to pick it up or re-find it. You have to turn customers into fans. Look at the whole artisanal movement and the way, for example, micro-breweries are into the theatre of beer production. It’s a restless sense of innovation that sport possesses – cricket launches 20/20, rugby goes with sevens.”

What sport offers to its constituency is drama, involvement and unpredictability. Gambling on its outcomes, after all, is a huge industry in itself. There is no more compelling stakeholder than a committed sports fan. Satterthwaite acknowledges that few want or expect such excitement from a tin of Heinz baked beans. Yes, through marketing and advertising you can imbue a product with character, but the intellectual property itself hasn’t changed in 118 years.  

There are drawbacks to working the sport/business knowledge transfer too hard. The main one is that it’s not necessary for every company in business to be a winner. The final of the 100 metres in the Olympics might be winner-takes-all, zero-sum-game, but selling consumer goods usually isn’t. Samsung, Apple and Huawei can tough it out for top spot and still do very nicely. Sainsbury’s managed perfectly well trailing behind Tesco during the Noughties. (And indeed, Tesco came a cropper for running their business far too hot, which led to disgrace, a plummeting share price, and even the attentions of the Serious Fraud Office.)

Sport displays many qualities that business seeks to emulate: skill, diligence, teamwork, strategy, resilience. But pushing it to the limit, whether by marginal gains or lack of ethics, can lead to the poor behaviour and complete disregard for standards of corporate governance that were exposed in the FIFA bribery scandal, the numerous doping instances in cycling and ball-tampering in cricket. 

The action of sport is time-limited to 90 minutes, 18 holes or one mile and four furlongs. It isn’t the relentless grind of the nine-to-five in an office or factory. This is the world in which normal businesses operate. Nick Fry admits that after Formula 1, “Most people find it very hard to go back into mainstream business. The slow pace of change is almost impossible to adapt to.”

To excel at sport, one cannot – as an individual competitor or a team – be half-baked when it comes to discretionary effort. But businesses are often enormous, and cajoling a workforce of thousands to operate consistently at a peak level, cranked up, Spinal Tap-stye, to 11, is entirely unrealistic, however much that particular business’s leaders might wish it. Sport and business may have a great deal in common, but in business there’s more than one winner.

This article was taken from the Spring 2019 edition of the Goodwood Magazine.