To Navigate the Future, Look at the Sports Industry

By Thought Leaders Archives
Cover image for  article: To Navigate the Future, Look at the Sports Industry

A few months ago, I was connected to Dr. Sascha L Schmidt, the Director of the Center for Sports and Management at the WHU -- Otto Beisheim School of Management, which is a leading German business school in Dusseldorf. Dr Schmidt began his career at McKinsey and worked on a start-up before combining his hobby and passion for sports with his job. Today he is one of the pioneering thinkers and researchers at the confluence of sports and technology. He also lectures at MIT and is an affiliate professor at Harvard and is the editor of 21st Century Sports: How Technologies Will Change Sports in the Digital Age.

During the past few weeks we have worked together on two projects. Dr Schmidt asked me to contribute a new chapter to the updated edition of 21st Century Sports which is titled Sports in the Third Connected Age, and we spoke at length about where business, sports, technology and the future intersect for the What Next? podcast I host.

Over these weeks it dawned on me that one way to both understand the future, to get people excited about the future and to re-imagine the future is to follow the future of sports, which is far more approachable to most people than the future of technology.

So here are five ways that sports are shapeshifting, which is directly applicable to every individual and business.

1. The Great Mongrelization

Sports and entertainment were always integrated, and today it is live sports that dominates entertainment and in many ways is the heartbeat keeping linear television alive. But sports does not just drive television. Now, television resurrects and gives new life to sports as seen in the massively popular Drive to Survive series from Netflix. Nielsen found that 34% of Netflix viewers became fans of F1 racing after watching the series. Another 30% said they understood the sport more, and 29% said they felt more engaged with the sport.

Sports and television have been long intertwined. Twenty-five years ago Michael Jordan in Chicago fused fashion with sports by dressing in bespoke suits as he arrived and left the locker room. Since then, fashion has weaved its way into every aspect of sports -- as illustrated by the fact that the World Cup trophy handed to Lionel Messi was delivered in an LVMH case.

If fashion is a form of identity so are our sports allegiances. Except for Harley Davidson most fans tattoo their teams and not brand logos on themselves.

Sports and fashion and social media make for a quantum force of congruence and re-enforcement. Mark Shapiro, the CEO of Endeavor, recently said of the intersection between sports, fashion and new media, "In the era of social media, when Instagram moves product and the camera is always on, the legend gets made on the field. But every other waking moment is an image-making performance about what you are wearing, the products you use and how that gets shared."

To understand the future of media, business, fashion and much more, follow the future of sports! This way it is easier to explain to board rooms who may be less passionate about technology than sports to open their eyes to the future and open their pocketbooks to fund the future. Sports also helps one to understand why the threats and opportunities to a business come from adjacent areas which intersect and combine, like fashion and sports.

2. Only the Schizophrenic Will Survive

Most businesses struggle with ensuring that they make their numbers today, keep true to their brands, and focus on their roots while also enabling their future, re-imagining brands and finding new wings. It is never either/or but both/and. It is the schizophrenia of balancing today and tomorrow versus being paranoid about the future or remaining rooted in some psychological fixation on the past which creates long term success.

Sports has grown, surged, adapted and morphed, but has worked hard to remain conservative, true to history and respectful of legacy.

Rules and governing bodies are strict but adaptable as new technologies from lighter equipment, stronger materials and other innovations change the contour of sports including a world where fans expect more, faster and quicker.

If one looks at the highest levels of cricket which began as five-day affair with white clothed players and breaks for tea and lunch one sees these "test" matches between countries continue but are now limited. Cricket has taken the world by storm and IPL cricket in India has become the fastest growing sport.

To understand how to take our company, brand and ourselves into the future by balancing today and tomorrow, risk and reward, roots and wings we can learn from how different sports are adapting to the future. Translating their moves to our industry allows for examples but also much easier translation and buy-in.

3. The Future is Global

Sports is the canary in the coalmine that reminds us that globalization is here to stay. Sports, entertainment and food are three human desires and needs that are common everywhere. They have been turbocharged with advances in communication and other technology.

Advances in travel have globalized food, advances in communication and technology have globalized entertainment. (The biggest shows in the U.S. on Netflix are often from countries outside the U.S. and many of the hits on Spotify today are from Latin America.)

Communications and technology have truly turbocharged sports, bringing cricket and F-1 sports to the U.S. and taking NBA and NFL basketball to Europe and other areas.

As importantly, 6.5 billion mobile phones and the Internet have created a constantly connected and engaged global fan base. With some small exceptions sports is the one content type that is not censored or edited around the world.

Any business or talent that questions globalization (a multi-polar globalization with many centers of power versus just the West) just needs to look at the success of sports and the focus that each sport is trying to globalize itself.

4. The Triangle Rules!

There is no silver bullet in business, because every business has three core constituencies that must be listened to and served. The customer/consumer is the first, management/shareholders are the second and employees/suppliers are the third. No business can endure without finding a way to balance these needs as it moves into the future. Skewing too heavily in only one direction leads either to bankrupt companies, destroyed brands or an inability to attract and retain the talent.

Sports franchises continuously work out a way to balance the fans,' the players' and the owners' needs with a plethora of different rules, salary caps and much more.

To understand how to balance, weigh and adapt to changing needs and circumstances of the three key constituencies as one's industry changes, look no further than different sports leagues to learn from their successes and failures.

5. Reset. Resurrect. Re-imagine.

Every sports player works to reset continuously through feedback and iterative improvement. Many of those real time and constant feedback loops are now becoming available outside of sports due to large amounts of real-time data and our instrumented selves and dashboards. Using this information, we all need to learn the value of resetting each time we start a project from the learnings of what worked and what did not from the past.

As AI and other technology spreads, we can learn from sports leagues which have pioneered many of these technologies and data from the Oakland A’s of Moneyball fame to how to chess players integrate computers into their training.

Athletes lose much more than they win land need to resurrect themselves from defeat. Similarly, today many companies find themselves threatened with potential defeat by new entrants, new technologies and the new needs of the people they serve. The ability to re-invigorate, refresh and reboot is a key to success in these fast-changing times.

Finally, technology is forcing sports to re-imagine not just each sport but what sport is. The e-Sports of today will morph into new types of sports in an AR/VR world. Ownership of sports and creation of leagues may change with Blockchain and DAOs. We will soon have virtual players playing virtual games in virtual worlds which we will all watch virtually.

Sports has shown that anything is possible if one is willing to balance today and tomorrow, address needs of different constituencies, be open to incorporate and blend parts of other industries, never lose the focus on globalization, and continuously measure to reset, resolve to resurrect when down and re-imagine what can be!

The future is sports!

Photo courtesy of Rishad Tobaccowala.

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