“A society grows great when old men plant trees whose shade they know they shall never sit in.” – Greek Proverb
Newly-minted CEOs face a stubborn dilemma. Do I prioritise short-term strategies that boost the company’s stock in the short term? Or do I take the long-term view and risk stock analysts’ disapproval as I lay the foundation for the sustainable health and growth of the company? Yes, my mindset plays a significant role, whether I see myself as simply a custodian of the position or leave the company in a better place for the future. As a consultant, I found that family businesses were consistently more likely to choose the long-term route. However, you cannot just blame the CEOs, with CEO turnover at a record high.
In this Thursday Thought, I draw the analogy of a long-term business view to a sports academy, in particular, the recent decision of the Italian rugby union to close the academy. For those who don’t have any interest in sports, this is not a sports article. The principles holds for both (ahem) fields.
Former Ireland rugby coach Eddie O’Sullivan and I had a coffee a few years ago. I had not seen Eddie since he capped me in 2003. During our chat, I asked Eddie if there was anything else I could have done as a player. He answered brilliantly. He said, “There are three types of players. Talented player. Disciplined players. And, talented players, who are disciplined.” I breathed a sigh of relief, knowing which bucket I belonged in. I also knew it was his way of saying. You did very well with the talent you had.
I was an average athlete who was highly disciplined. I know I did everything possible to make the most of my little talent. I played for two of the best clubs in the world, Toulouse and Ireland and I have benefitted from the gift of discipline in every endeavour after my rugby career. The thing is, I never intended to play rugby after school. I only played rugby because our school was a rugby school. Two things changed that. The first was that I toured Australia with Leinster as a schoolboy and was voted player of the tour. The second resulted from the first; I was picked as a wild card for the newly-created Irish foundation, a dozen players selected in an academy. It was that academy that changed the course of my life. Suddenly, I had a structure, strength and conditioning programmes, visioning exercises and most of all, people who believed in me.
One of those people was Stephen Aboud, who established Ireland’s rugby academy in the ’90s and then called the foundation. That academy, a phenomenal school feeder system, the structures of the Ireland Rugby Union, fantastic coaches and many more elements are why Ireland has become one of the best teams in the world. Ireland has never had such a depth of players, and it is only getting started. On Sunday, Ireland confidently beat Scotland despite experiencing all kinds of chaos, and the Ireland U20 side destroyed Scotland 7-82. For those who don’t remember, twenty years ago, Ireland rarely won many games in the Triple Crown, Four Nations, Five Nations and now Six Nations. When we played a southern hemisphere team, you would be forgiven for mistaking the final score for a cricket score.
Today, Ireland is enjoying the fruits of that labour and all the pain that it involved. It is a long road, full of critics, laggards and naysayers – as with any change programme.
The Italian Job – They Blew The Doors Off
Just like a newly-minted coach, newly appointed coaches face a similar dilemma. The dilemma is exasperated when they are designated to turn around a struggling team. He or she implements a game plan, selects a starting team and, after a rocky start, begins to put a string of victories together. Now they have a formula that works; maybe even some superstition creeps in around their starting team. Even when they play weaker sections, they stick with a chosen few.
Furthermore, the coach does not invest in an academy. With an intense focus on present-day results, they neglect the club’s future. The fault does not lie just with the new coach. There are committees, boards and trustees who appoint the coach. Picture the science. After a decade of discarded coaches, Conor O’Shea takes on The Italian Job. One of his first moves is to set up an academy, knowing this is a long-term turnaround. He headhunts the same Steve Aboud who set up the Ireland academy.
O’Shea enjoyed a few historic wins but never enjoyed the shade of the saplings he helped to nurture. However, Italy has shown real promise in the last two seasons, resulting in several significant victories. The lengthy change process in developing the academies resulted in landmark wins for the Italian U20s team defeating England, Scotland and Wales. As a pinnacle of their success, the Italian senior side beat Wales on their doorstep, a massive achievement. What do you do in such situations? You double down on the strategy, right? That is what has confounded the rugby world, Italy “blew the bloody doors off” and killed their academy. Under pressure from Italy’s lower-division clubs, the Italian rugby union has decided to dismantle its excellent work. Those clubs don’t want their players to attend the academies.
The entire situation mirrors what happens in the business world all the time. As we are seeing today, many successful organisations are shuttering incubators, innovation labs, and accelerators to satisfy the pressures of stock analysts. Whatever you call them, these exploratory projects are business academies. Not only do they help the business uncover new business models, but they foster new mental models. One of the reasons Ireland is beginning to beat the All Blacks, England and Australia consistently is self-belief. As a teenager, I witnessed Ireland experience cricket-score defeats to these teams. We rarely saw substantial victories. That leaves a mental scar, and when you encounter those teams yourself, you had often lost the game before you even took the field.
The business world is rife with stories of short-term wins. Albert Dunlap was brought in to turn around Sunbeam. He doubled down on the present, and of course, the stock soared fleetingly, but soon after, the company fell apart.
Conversely, Lou Gerstner, appointed to turn around IBM, overhauled the culture, structure and policies. Gerstner endured stagnant stock prices and the scorn of the street. They called him a failure. His strategy ran counter to the prevailing wisdom to disaggregate the company. His bold decision kept the company together gave IBM the capabilities to deliver complete IT solutions to customers. Today, he is primarily credited with reversing IBM’s fortunes.
All disruptions share a pattern, including sports. The transition is neither abrupt nor immediate. When a new approach substitutes an old one, that evolution is gradual. A persistent problem emerges for leaders, however. When nascent saplings are in their infancy, they are considered a drain on company resources. Many leaders even dismiss them as marketing (and in many cases that is true). But when the world flips, the years of incubation pay dividends. This is not an easy decision. After all, very few leaders get to bask in the shade of their sapling strategy.
If your organisation (or you) has not yet embarked on this work, take solace in another proverb from China: “The best time to plant a tree was 20 years ago. The second best time is now.”
THANKS FOR READING
We are coming to the end of our Clayton Christensen series. We have landed on one of my favourite books, “How Will You Measure Your Life”, and co-author of that book Karen Dillon joins us to share her insights.
Part 1 is here:
Part 2 is here: