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College Sports Transformation: A Lesson for Business

In 1976 I joined the Michigan State University Sports Medicine staff as a 17 year old freshman. It was my dream, all I ever aspired to do was support high level athletes in their pursuits. The experience I gained in just one year was phenomenal. Working with Big 10, yes there were only ten schools in the Big Ten at the time, athletes, physicians and Athleteic Trainers shaped much of my life. I loved collegiate athletics. Not any more! I can barely follow Division 1, FBS schools without shaking my head.

The transformation from an extracurricular activity that allowed opportunities for gifted athletes to achieve an education has turned into a full-on business endeavor for college football and basketball. Now, the gymnasts, fencers and swimmers still go to class and take advantage of the athletic scholarships. These athletes ride around in vans, stay in cheap hotels and remain uknown to most people. They complete their studies at a high graudation rate and become contributing members of society, as far as I know competitive fencers don’t demand $20 milllion contracts.

Over the past few years with the introduction of Name, Image, Likeness (NIL) contracts and the Transfer Portal the landscape in collegiate athletics has been entirely transformed. It’s a new world. So new that coaches are retiring, fans have not idea who actually plays for their Alma Mater from year to year and female athletes take a pay cut when they go pro.

The immediacy of the transformation has been so dramatic it makes any commercial business green-eyed with jealousy. So let’s break it down and do some comparison between the collegiate athletics transformation and a typical business transformation.

OBJECTIVE

Collegiate Athletics: Generate growth for the institution and individuals through enhanced revenue.

Business: Generate growth for the business through enhanced revenue.

STAKEHOLDERS

Collegiate Athletics: Institutional Leadership, Athletic Directors, Media Outlets, Individual Athletes

Business: Business Leadership, Shareholders

INVESTMENT

Collegiate Athletics: ZERO (any and all new costs are borne by commercial investors)

Business: Varies by magnitude of transformation and company size. Let’s throw a number at it from my experience in the large enterprise space of $100-$200 million off the bottom line.

COMMITTMENT TO END STATE

Collegiate Athletics: Extremely High, little or no resistance to adoption

Business: Dependant on multiple variables. In most cases resistance is typically high in the early stages as committment to end state is high. Over time resistance becomes higher, if not managed correctly, and committment wanes.

SPEED TO VALUE

Collegiate Athletics: Immediate following court decision and contract negotiations with athetes

Business: On the balance a major transformation time to value is 3 to 5 years.

LEARNINGS

Transformation, when driven by legal means, can be fast and furious much like the whirlwind caused by Sarbannes-Oxley following the Enron debacle. When a transformation is driven by a vision for the future without the stick of legal or regulatory rules the pace is slow, the investment high and the speed to value lengthy.

Conceptually the “burning platform” for change should always carry both a positive result and a negative outcome. Many times a business contemplating transformation will focus only the potential positive outcomes. Putting some fear into stakeholders about the negative consequences of transformation assists the psychological acceptance and adoption of the future vision.

What’s In It For Me (WIIFM). Student athletes are all in! They see dollar signs everyone for themselves personally. University leadership sees millions of dollars flooding into their coffers from media contracts. The WIIFM is clear and strong for collegiate athletics. In business the WIIFM is much softer and more challenging to quantify. Most workers in a business see very little gain from a major transformation. Possibly some reduced manual labor or the promise of contuing employment with the opposite also being in the back of their minds of automation replacing their employment. Leadership and shareholders hope that the transformation moves faster than market forces.

The primary learning from the rapid transformation of collegiate athletics is that a clear message resonates, backed by significant risk of non-adoption with strong WIFFMs for all the stakeholders impacted.

Take a strong, committed stand to your transformation efforts. Tell an honest story that articulates both the positive and the negative. Drive ahead at mach speed, do not delay the change.

April 16, 2024 Posted by | Uncategorized | , , , , , , , , | Leave a comment