Let me paint a picture real quick. Imagine the owner of a company starts to see a dip in sales. What are you taught to do in business school? Evaluate your product, which he/she does (lets just say he for now...no offense ladies it's just one letter shorter which obviously makes a huge difference when typing...carpal tunnel can wait). So he sees that his product is not performing as predicted, so he goes out and speaks with all the members on his board, his VP his CFO, the product team, etc. They all evaluate and decide that the product needs to be upgraded. So they make a concise decision on a new product that they believe will have a larger R.O.I., and invest capital in that product.
Now, go back and put "player" in for product. Now instead of some owner, put John Elway, and instead of sales, put...oh wait sales. What is the difference between what John Elway did with Tebow and Manning and what Apple did with the iPhone 4 and 5? Nothing, except the iPhone 4 doesn't have John 3:16 written on the back. Ok, ok, seeing as this is a sports blog you probably could've guessed where that was going (the title may have given it away), but what sparked my interest to write about this subject? The new IOS 6 Update...I mean the replacement refs, a sub par piece of equipment that doesn't live to up expectations and compromises the product.
We all saw the Green Bay, Seattle game, we all know what happened, "The Golden Push" (as I have so ineptly called it) which led to the new NFL rule "Catch the guy who caught the ball and that is now a catch". But I don't want to talk about the call, nor directly the people who made the call, but the reaction to the call and all the calls that had been made leading up to that. As I stated before, sports is a business, the NFL is a company above anything else, out there to do what every other company tries to do, turn a profit. What happened on that night led to an immediate deal between the NFL and the normal refs. Two days before that call, ESPN had reported that the referees and the leagues meeting had gone horribly, and that neither side seemed to budge. Then all of a sudden they magically agree on everything and chose to give and take? Roger Goodell had a sudden change of heart a la the Grinch?Do you think it was because the NFL really cared that the call was made wrong? No, never, and well kinda. The real reason, in my opinion obviously, is the product was compromised. The product (remember the trade in word for product).
The deal got done because you had a proven product, a $9 Billion a year industry, not performing to its expectations, and the entire world not only knowing about it, but talking about it in a negative manner. Turn on sports radio any of those three weeks, especially the day after that horrendous call, it is all anybody could talk about. Nobody mentioned how Aaron Rodgers was running for his life that game, or the fact that a relatively unknown Seattle defense dominated one of the most prolific offensive attacks the game has seen the past 4 years, no it was the refs. A game that should've been embellished the NFL for its parody and ability to captivate audiences instead turned the league into a laughing stock. In the business world this simply does not do. Do you remember the Toyota recall with the whole brakes situation? That turned out to originally be because a car rental company put the wrong floor mat in a Toyota rental and it pushed up against the brake pedal so the driver couldn't put it down. But it went public and people freaked out. Now when you ride along with someone in a Toyota, you are thinking in your head jump, tuck, and roll while your hand is on the handbrake instead of focusing on the fact that your significant other is trying to have that all important DTR with you.
So what happens when the public screams for you to change the product? When its on as big of a national stage as that game was (and when it hits every paper in the world just like the Toyota thing did), you budge, just like the NFL did. I can almost guarantee you Ed Hochuli broke his record for curls on that night because he knew 100% that the NFL couldn't let its product be shamed and ridiculed like that any longer. You can't put a Sketchers sole on a Nike shoe and expect people not to know the difference. Sure to the casual shoe wearer they may not be able to tell what's wrong. But to those who truly love Nike, they will walk around and be like wait wait a minute, something's not right. Then when that ankle sprains, they'll say enough is enough and go buy a different shoe (ok ok no more metaphors I promise).
So what's the take home message here? Next time you try to figure out why Aaron Rodgers makes $8 million a year, how the NFL can charge on average $78.38 per ticket, or how you yourself are enamored with a backup quarterback to the point where you'll buy the jersey of a guy that doesn't even play, just take away the ball, take away the jerseys, take away the pads, and the colors, and the announcers, and look at the players and the games purely as an item of output. Do they perform to their expected value (salary)? Does the company meet the shareholders expectations (record)? Do they receive bonuses from exceptional output (extra ticket prices for playoffs)? And can poor performance force a company to yield to a union (self-explanatory)? In the end, all it really is is a business, and quite the business if I do say so myself.
E. Moats
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