In business, spring also brings thoughts of summer strategy off-sites and refreshing corporate strategies in advance of fall board meetings. Of course, ‘strategy’ can mean a lot of things to a lot of people, but at its most fundamental level, strategy is about making choices. In business, as Michael Porter said, “you can’t be all things to all people.”
In that context, I’d argue that my team, the St. Louis Cardinals (the second most successful baseball franchise of all time with 11 World Series rings and currently leading the Central Division) can teach us two important things about business strategy.
Lesson 1: Build strategies to create more than satisfied customers. Create engaged fans instead.
Generally, Major League Baseball teams are in the business to:
(a) Win games, pennants, and championships (i.e., put a good product in the market), and
(b) Keep fans satisfied and sell tickets.
Success may be defined differently by different ownership groups, but broadly speaking, winning championships on the field and making money off it are key indicators of success.
In baseball, customer satisfaction is often measured by such metrics as fan attendance, local viewership, and merchandise sales. Moreover, for most franchises, these satisfaction measures are tied to the quality of the product. Teams that are losing don’t draw fans. Cardinals fans, however, show up regardless. Much to the chagrin of other fan-bases, Cardinals fans are often cited as the “best fans in baseball,” and well over 3,000,000 of them have shown up the last three seasons despite the team not even making the playoffs. That’s top 3 in attendance in the MLB over that stretch. A further look shows the Cardinals in the top-third for total attendance in any given season in this millennium (http://www.espn.com/mlb/attendance).
So how do the Cardinals go beyond satisfaction and keep their audience truly engaged? For one, the Cardinals are masters at cultivating strong connections through unique experiences off the field that bond their customer, the fan, to the team. A few examples of these experiences are the Cardinals Kids Club, Team Fredbird – a youth camp with the team mascot, a Spring Training Fantasy Camp, the “Winter Warm-Up” where fans get to meet and greet players, numerous fundraisers, and volunteering days. When I was in high school, my baseball team even got to play a game at Busch Stadium. And, the list goes on and on. It is worth noting that the proceeds of many of these events go to local charities in the St. Louis community.
These events and activities are strategic choices to stay connected with fans and the community and build true engagement. That is not to say on the field experience is not important, but off the field fan engagement and experience certainly help in years where the team is not as successful in the win column. Personally, I believe nostalgia certainly plays a role and being born in St. Louis makes you a lifetime Cardinals fan by birthright, but that is a bit more difficult to objectively measure.
Likewise, companies strive for financial performance but also need to keep their stakeholders – customers, employees, and shareholders – engaged. The business landscape is littered with examples of companies who do this well. Patagonia, Tom’s, Southwest Airlines, and Chipotle all can teach us something about the value of engagement – even when the team’s record on the field may be going through a period of lackluster performance or temporary challenges.
Lesson 2: Choose a strategy to differentiate, not copy.
A few years ago, a Cardinals employee was found to have hacked into the scouting database belonging to the Houston Astros. Ultimately, the perpetrator was sentenced and the Cardinals themselves were fined two million dollars.
One could argue the intent was to steal and possibly emulate the Astros’ scouting strategy. When it comes to business, we believe that differentiation is better than emulation. Or, as Seth Godin says, “fitting in is a short-term strategy…standing out pays off in the long run.” In their popular framework described in “Playing to Win: How Strategy Really Works,” Martin & Lafley offer two choices in how companies should position themselves to win – either through (a) a low-cost model, or (b) by differentiation.
In baseball, some teams – perhaps the Miami Marlins are a good example – choose the low-cost model. Most franchises, however, choose to differentiate both on and off the field. On the field, this choice is certainly made easier by the lack of a real salary cap in baseball. For any business – as with the Cardinals – there are also strategies that can be employed “off the field.” And, maybe even more importantly, there are strategies that can be implemented for zero or very little investment that create a differentiated experience. Anyone who has flown Southwest Airlines or has visited Disney World can attest to this. When a Southwest Airlines flight attendant cracks a joke over the PA, the total cost is essentially zero. The differentiation value is immeasurable.
In baseball, the advent of ‘Moneyball’ and advanced analytics by Oakland Athletics’ GM Billy Beane could be deemed a similar play for differentiation. After all, the Houston Astros of course went on to win the World Series that season, and my Cardinals missed the playoffs for the second straight year.
As you look toward your company’s strategy session (see our blog here for how to make that session successful), keep the above two points in mind and ask your executive team the following questions:
- What do we need to do strategically to create not only satisfied customers, but truly engaged fans?
- How do we define our playing field and what other teams are we competing against on that field?
- What do we need to do as a company in order to truly differentiate us from the competition?
- What strategies can we employ that would make us different but would cost us essentially zero?
The discussion that ensues may be just as important as the answers to the questions themselves.
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