Armchair Manager: What Sports Can Teach Us About Management

One of the reasons I enjoy sports is the human dynamic at work in every sporting endeavor, says business and leadership blogger Dan Oswald. At different times and in different sports, an athlete may do battle with another competitor, the elements, or even with himself and his will. This fascinates me, says Oswald, CEO of BLR, offering his thoughts on sports and management in a recent edition of The Oswald Letter.

What’s more, an athlete often has to deal with teammates, a coach, and management or governing bodies. There always seems to be something going on in the sporting world that lends itself to the drama of the human theater.

There are a number of current situations playing themselves out that deserve some analysis and reflection by any manager. Let’s start with the Jeremy Lin phenomenon in New York. Lin was a fringe player in the NBA who had already been cut by a number of teams, before catching on with the New York Knicks.

The Knicks signed Lin because of injuries to a number of its star players and, lo and behold, Lin takes the league and the country by storm. In his first four games, he scored more points than any player in league history. What’s more, his team which had been bumping along with a sub-.500 winning percentage started to string some wins together.

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So why would this be interesting to a manager? Well, put yourself in the place of the Knicks’ coach or front office. You’ve signed this player to a minimum salary to fill in while your stars are injured. Much to your surprise, the player performs way above anyone’s expectations. You want to hold on to this new contributor and maximize what he can do for the team. At the same time, your proven stars are returning to work and expect their places in the line-up.

What’s the best result for the organization? How do you retain all you’ve gained from the new addition who has made significant contributions in such a short time? How do you begin to build team chemistry as the veteran players return to work? There are egos involved. There are team dynamics to consider. It’s up to the coach (read “manager”) to determine how to best use all the talent that has been assembled to advance the goals of the organization—in this case, winning a championship.

It’s fascinating stuff and I wish I could tell you I have all the answers to the questions I’m posing. I don’t. In part, that’s because I’m not smart enough to figure it out. But it’s also because every situation is different. The cast of characters is different, the organization is different, and the goals are different. The manager must be able to assess all the factors involved in each unique situation and determine the best course of action for the organization.

Here’s another situation that just played itself out that intrigues me in a similar way. The Indianapolis Colts had the option to get out of its contract with star quarterback Peyton Manning, who was drafted by the team in 1998 and has played his entire career with them. If the Colts choose to opt out of the contract with Manning they must pay him $1 million. If they don’t, they owe him a $28 million bonus and they get to keep him.

It seems simple, doesn’t it? Evaluate whether or not the employee, I mean player, is worth the amount you must pay him. Is the organization better off paying him $1 million to leave or $28 million to stay?

Well, let me complicate things further. During his time in Indianapolis, Manning has been, arguably, the best quarterback in the league and one of the best of all time. He also led the team to the city’s first Super Bowl victory and is beloved by fans.

So while his performance may seem to warrant the contract extension, given what professional athletes make today, there are other factors for the organization to consider. Manning didn’t play a single game last season due to a neck injury and, at 36 years old, there’s some question about whether he will be able to play at the same level he has in the past. And without Manning, the Colts lost so many games last season they earned the top pick in the 2012 draft in which one of the top prospects happens to be a quarterback many predict will have a great professional career.

So what do you do if you’re the Indianapolis Colts? Do you show loyalty to a long-time star who has done so much for the organization? Do you gamble and extend Manning’s career with your team, despite not knowing how he will recover from injury? Do you let the face of your organization walk away and pin your hopes on a promising, yet unknown, prospect?

Again, I don’t have the answers and I’m not sure that there is a right or wrong answer. It was up to the Colts’ management and ownership to decide what is the best use of the organization’s resources, in this case salary dollars, to achieve its ultimate goal of winning another Super Bowl. They chose, just last week, to let Manning go.

That’s not an uncommon decision for a manager to have to make. You’ve been faced with decisions on who you want to hire for specific positions. You have had to allocate salary dollars you’ve had available in an attempt to maximize the return for the organization. And, if you’re honest, you’ll admit it’s a crap shoot.

Sure, you can increase your odds by doing your homework and having a thorough evaluation process, but in the end a lot of these decisions are made on instinct because people are not as predictable as we might like to think.

So next time you’re watching your favorite sport on television think about the human dynamics that are at work in every situation. Then consider how it relates to your position as a manager in your organization. You might just learn a thing or two while sitting on the couch enjoying the game.