From The Gridiron To Lessons in Governance

R. Brad Oates

In addition to having played professional football in the NFL with the Cardinals, Lions and Packers, I have served on a number of public, private and non-profit boards, as well as been a strategic governance advisor to a wide variety of companies, from tech startups to troubled bank turnarounds. Through this vastly varied experience, I’ve observed that governance in the corporate world is mainly “top down,” trickling from a board of directors, which is a distinctly different approach from the “bottom-up” governance principles I learned from championship teams.

One of the most important principles the professional sports arena teaches you is the competitive advantage to be gained by completely aligning and linking a team’s vision, governing values, mission, competitive strategy and execution plans with measurable performance outcomes. I refer to this type of strategic alignment as “Championship Alignment,” and it is the core governance principle for building a true championship team.

Similarly, “Championship Organizations” have four self-governance dimensions that, when leveraged together, create sustainable competitive advantage:

• Governance Leadership: The right team leaders at every level in the organization provide a model for team members for how to achieve performance outcomes the right way.

• Self-Improvement Resources: Sufficient financial and non-financial support resources enable team members to continually improve their performance outcomes.

• Accountability Processes: Formal and informal accountability processes empower team members to be accountable for performance outcomes.

• Performance Culture: Shared values and self-governing “tribal traditions” challenge team members to exceed performance expectations.

Championship Alignment + 4-Dimensional Self-Governance = Governance Capital, the competitive advantage currency of Championship Teams.

Every Championship Organization I have been associated with, whether in the sports or corporate world, had a measurably greater amount of Governance Capital than less-competitive peers. This is the primary reason why Championship Teams win consistently against seemingly equal competition. Championship Teams expect to have a competitive advantage on the field of play from having more Governance Capital than their competitors.

To illustrate: When I was drafted into the NFL by the Cardinals in 1976, I became a member of what was widely considered the best Offensive Line (“OL”) in the NFL at that time. The Cardinal OL set the record for allowing the fewest quarterback (QB) sacks in a season for three straight years (1974 – 1976); a record that still stands today. Consider the Cardinal OL mission to win games for the team by allowing the fewest QB sacks. The Competitive Strategy to achieve this measurable Mission Outcome was to architect and execute blocking schemes each game that neutralized the opposing team’s best pass rusher. One of the tribal traditions of the Cardinal OL was not just “no QB sacks,” it was a performance expectation that the man you were assigned to block never even “hit” the QB in a game, let alone sack the QB. The coaches did not dictate this; the players developed this self-governing tribal tradition themselves. It was not written anywhere in any playbook. The Cardinal OL Governance Leaders (i.e., the All-Pro Veterans) constantly emphasized this performance expectation as the “signature reputation” for being a Cardinal OL during film study, particularly if your man ever did hit the QB.

But the performance expectation of not allowing your man to ever hit the QB was really perfected during football practices. The Execution Plan to perfect this performance expectation was “perfect practice” execution: practice with a specific Execution Outcome to achieve—never fall to the ground in practice and always be in an on-your-feet mobile position to make a competitive difference.

The Championship Alignment and self-governing building blocks that enabled the Cardinal OL to be the best in pro football can be depicted as a “Championship Governance Pyramid”:

Can you see the parallel competitive advantage in the corporate world, if a company was in complete Championship Alignment and every organizational unit in the company was self-governed? The board’s governance responsibilities would then become more focused on ensuring the company is effectively self-governed, rather than having to solely govern the company themselves.

A company’s overall amount of Governance Capital is the sum total of the Governance Capital created from each of its self-governing organizational units, i.e., a bottom-up governance model.

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Brad Oates is chairman of Stone Advisors and an independent director on the CIT Group Board of Directors (NYSE:CIT). He is also a regular lecturer on corporate governance and business ethics through his academic affiliations with the Institute for Excellence in Corporate Governance at UT-Dallas and the Marriott School of Management at BYU. He can be contacted by e-mail at boates@stoneadvisors.com.