What can sports teach business about leadership?

Despite the great achievements of the world's most successful leaders in business, politics and the non-profit sector, it can't be denied that the leaders the public admire most of all are those who play or coach sports.

by Knowledge@Wharton
Last Updated: 23 Jul 2013

Sir Alf Ramsey, Donald Bradman, Michael Jordan - these are leaders whose exploits can invite the eternal respect and gratitude of entire nations. Even Warren Buffet can't claim that.

But is there any crossover between leadership in sports and business? Is being coach or captain of a basketball or soccer team fundamentally different to being a company executive, or do the best sports leaders display qualities and techniques that can be applied to the corporate world?

Knowledge@Wharton assembled a panel of owners and executives with a background in sports to discuss the qualities that makes somebody a great sports leader. They included Jeffrey Lurie, owner of the Philadelphia Eagles, who shed some light on how the football team had managed to reach the playoffs six times out of the last seven seasons as well as the 2005 Superbowl. He said that the Eagles use a battery of tests and evaluations in judging future draft choices that is more extensive than most Fortune 500 companies use when recruiting MBAs. In addition to speed, strength and stamina, the Eagles will assess a potential draft's personal qualities by talking to his high-school guidance counsellor or even the school caretaker.

Several of the panel commented that while sports leadership skills are not necessarily easily learnt, they can be transferred quite successfully to the business world. Mark Fisher, founder of the MBF Clearing Corp, the largest clearing firm on the New York Mercantile commodities exchange, said that a large number of the traders he has hired have a background in college or professional sports. "As a trader, I have found that the qualities that make the best traders are the ones that make the best athletes," he said. One reason is that athletes can have a very bad day on the field just as a trader can have a bad day on the floor, but the successful ones have the ability to bounce back.

Robert Castellini, CEO of the Cincinnati Reds baseball franchise, commented that a lack of formal evaluation is often characteristic of both sports and traditional business. He said that even though players are held accountable by the fans, there is often a lack of formal evaluation by the team's owners or coaching staff. Observing that when he joined the Reds' organisation several years ago, the team was 29th out of 30 major league franchises in nurturing its own talent. "You might be paying a $4 million bonus to sign a high-school player, and so you had better be right," he said. "And if you're not right, you ought to be held accountable."

Another challenge that faces leaders in both sports and business is finding a balance between securing short-term gains and long-term success. In sports, there is often intense pressure - from the fans and hometown media - to win now, which can create the temptation to make short-term moves that might be counterproductive in the long run. "The fans want you to win, but you can't engage in a popularity contest or you will be in last place every year," said Lurie, insisting that the best decisions are often those that do not please the fans - or shareholders.

Source: Knowledge@Wharton

Review by: Nick Loney

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