08 April, 2016

Don't Focus on the Mirror, Look Outwards

Don't Focus on the Mirror, Look Outwards

Photo Credit: Keith Smiley

Sport needs to focus on solving its own financial and governance issues before it looks to develop any new opportunities.

A statement that is rooted in traditional staleness of an inward looking business model. If you are continually looking towards your navel then you will eventually trip over or walk into something that has been staring you down. Something that Governments and failing businesses do very well.

Bang, take that! I bet some of you will feel the blood pressure rise and that is what I want. Right, lets have a good conversation about why I said that.

My frustration that I am sharing with you today is one of trying to get people to think differently in the sports industry. I have a different point of view to many within the sports industry. By the sports industry I include everyone from volunteers to the Sports Minister and private businesses that support the industry.

Many within the industry sit with an ‘inside-out’ approach. This is where they believe that strengthening the inner capabilities of the organisation will ensure its success. I believe that an 'outside-in' approach is required. This is guided by my belief that creating customer value and experience in a changing environment is primary for business success.

The Sports Industry Today

The sports industry environment has shifted significantly in the last generation and monumentally in the last decade. The power of technology, live streaming, TV deals, strengthening of Asian dominance and shifts in the participation habits of our population in their leisure activities has changed the ball game.

Unfortunately some sports have not changed fast enough and some people are still trying to peddle solutions to issues 10 years past.

The size of the sports industry in Australia is in excess of $14 billion. It consists of over 9.000 organisations with over $4.2 billion paid in wages.* This sector is a major contributor to the Australian economy and is tending towards being professional corporate organisations rather than being run from the kitchen table.

In Australia, the sports industry is highly protected by Government. The industry has been established with an inside-out model whereby sports have been protected from failure and poor business models have effectively been supported. Anyone wanting to try something new, that doesn’t follow the current pathway of sport delivery, is pushed aside. This demonstrates risk aversion.

Successful Business Practices

Successful businesses make a profit by selling a product or providing a service that meets a need. The product or service must remain relevant and successful businesses take risks, based on clear thought processes and market analysis.

If business focuses all its energy on looking inward trying to solve its own processes and governance issues, it will loose sight of its true purpose. The flip side is learning about your customers and the market opportunities and ensuring your product/service effectively meets the need. This is as outward looking business.

Have a look at every successful business around the world and see which ones focus on their customers first and their own business environment second. Here are a couple of very young, successful businesses:

  • Facebook – Customer focused first, all about the user experience.
  • Apple – Product focused and providing customers with products that they didn’t even know they needed.
  • AirBnB – Customer and user experience focused, disrupting the world of accommodation. It is now the largest accommodation provider in the world.

I am sure all of these businesses had to solve their internal politics and structures of the business along the way. But I can guarantee you they didn’t sit around a board table for months on end saying let’s sort out our governance structure first before we look at the market opportunities.

So why are we so fixated on this within sporting clubs and organisations? Why is Government, our largest funding provider, still stuck in post World War Two interventionist and protectionist policy strategy? 

A New Approach

A new approach is needed, one that focuses outwardly and not inwardly. Sporting clubs and organisations must be business minded. They must be purpose driven with a view to make a profit. And don’t tell me not-for-profits can’t make a profit because they can, they just can’t distribute those profits directly to members. Let’s called them for-purpose organisations maybe!

But we as a sporting organisation are doing fine, we are growing year to year, we are developing our staff, we plan our season and our board and staff understand our business well.

You are inward looking!

Lets create outward looking organisations where you see your organisation against the backdrop of the outside world. You can have a true understanding of customer needs and suppliers’ strengths help to build your organisation in a competitive world.

This might mean that some organisations fail to survive. Is that a bad thing? Why should I as a tax payer continue to support an organisation that the community has decided is no longer relevant?

Sport will always be relevant, but the delivery method will change, must change. Sport is a solution provider to a range of issues from national identity to health and education strategies. In order to gain the competitive advantage then the most successful organisations will provide these solutions.

Rant Over…

OK, rant over, but seriously, we need to change.

I will continue to push the boundaries of political navel gazers and risk adverse policies and continue to challenge the status quo of sports’ thinking. I'll also look for other likeminded partners and organisations to progress this thinking. Why, because there is too much at stake not to change and remain relevant.

I believe that sport has the power to create the social change that we need to solve issues within our community. We just need to understand what the opportunities are, develop an outward looking strategy to address the opportunities and then orientate our organisation towards the goal.

If you agree with what I am saying, you might want to read about where to start and creating a purpose

*IBISWorld Industry Report X0028: Sports in Australia, June 2014

© 2019 Paul Mead