DF chapter 8
Introduction
The commissioner of the National Football League (NFL), Roger Goodell, stands at the helm of the league, which is composed of 32 organizations. Furthermore, every employee of those 32 organizations is also a league employee. Given the league’s structure, any NFL strategy or changes in the league will largely depend on Goodell’s ability to build consensus, or coalitions, among the owners of those 32 organizations. Even when Goodell successfully builds consensus among NFL team owners for changes in the league, these changes may lead to public scrutiny and backlash. It is not an easy job, especially when situations arise that place the NFL in a challenging landscape. Since 2006, there has been a steep decline in high school football participation rates, which escalated in the 2010s in the midst of glaring headlines regarding traumatic brain injuries of football players (Giambalvo & Sheinin, 2024). In response, the NFL has invested time and resources in making the game of football safer to play. In March of 2024, the NFL voted to outlaw the use of the hip-drop tackle, with the broad intention of enhancing player safety, despite objections from the National Football League Players Association (NFLPA) and many players. The NFL conducted research examining over 20,000 tackles over the course of two seasons and found that the hip-drop tackle led to injuries at a rate 20 times higher than other tackles (NFL, 2024). According to John Harbaugh, Baltimore Ravens head coach, “When you drop down on the back of his legs, it’s a mass . . . and it’s 25 times more likely to have a serious injury. So, it’s really a bad play, and it needed to be out” (Hensley, 2024, para. 4). On the other hand, the NFLPA staunchly opposed the NFL’s ban of the hip-drop tackle. “While players have consistently advocated for health and safety advancements, any prohibition on the ‘hip-drop tackle’ technique is unfair to players and unrealistic to implement. It places defensive players in an impossible position by creating indecision in the mind of any tackling player, puts officials in an unreasonable situation that will result in inconsistent calls on the field, and confuses our fans,” the NFLPA said in a statement (Seifert, 2023, para. 3). L.A. Chargers running back Austin Ekeler said, “It’s part of football. You’re tackling people. . . . I think it’s honestly detrimental to the game if they try to go forward with this decision” (Jones, 2024, para. 9). Because the NFLPA and players have little to no influence over the process of changing game rules, which requires three-fourths of owners to approve, it is not surprising that the rule passed. The rule outlawing hip-drop tackles is a strategic move by NFL owners to make the game safer for players. The rule’s success will be determined by how well officials, coaches, and players implement it. If the rule leads to fewer injuries on the field, it will make football safer for players and may help improve high school football participation rates.
It is difficult to determine causality because there are many other incontrovertible factors to consider when trying to understand why the NFL, the king of professional sports, appears to be in a vulnerable position. These factors include the growing awareness of head trauma injuries, changes in media consumption, oversaturation of the market, changes to the rules of the game, and the amount of attention on officiating. Regardless of the cause, the NFL’s future success will depend on Goodell and the NFL team owners’ ability to adapt strategically to the tumult over its current environment.
This chapter focuses on the importance of understanding strategy and how leaders like Goodell use it to move their organizations forward in a sea of competitors, technological changes, and unforeseen circumstances. The different levels of strategy, strategic planning, achieving strategic focus, implementation of strategy, and execution and evaluation of strategies are explicated with numerous companion examples to help students understand the importance of leaders getting all organizational members to row the same way to differentiate their organization in a crowded marketplace. Further, the chapter offers a particular focus on developing a strategic vision and how organizational values relate to strategy. The chapter ends with a discussion of the characteristics of strategic leaders. Exploring these characteristics is crucial for 21st-century employees working for sport organizations, who will need to develop these traits to lead organizations in an entrepreneurial, innovative, and democratic manner.
Strategy and Strategic Planning
The challenges of leading a successful sport organization are staggering. The responsibility of developing an effective strategy, a plan of action to achieve a major aspiration, is daunting. It requires addressing how an organization will grow itself, satisfy customers, outcompete rivals, respond to changes in market conditions, manage each functional component of the business, develop required competencies and capabilities, and achieve business objectives (Thompson et al., 2022). The development of strategy is carried out across four different levels of the organization’s hierarchy (Thompson et al., 2022). Corporate strategy is characterized by the efforts of senior corporate executives to boost combined performance across all businesses and programs and devise ways to innovate new approaches to take advantage of cross-business synergies that can be leveraged to gain a competitive advantage. Adidas’ corporate strategy reads: “Based on the authenticity of the adidas brand and our constant efforts to understand our consumers’ needs, we aim at capitalizing on the acceleration of favorable long-term structural trends by pushing the boundaries of products, experiences, and services” (adidas, n.d., para. 1). Business strategy refers to the approaches, actions, and steps that are devised to produce intended results and achieve goals in one specific line of business or in one particular program. Using adidas as an example again, one area in which it may look to achieve goals is targeting female athletes with its products. Corporate strategy offers an overarching, macro approach for the entire company, whereas business strategy is more focused on a certain area of production. Functional strategy involves the practices and behaviors used in operating specific business processes and activities. Functional strategic leaders are charged with adding important details and specifics to operationalize and support the overall business-level strategy. So, if adidas is looking to reach more women in sport, it may look to boost functional areas such as marketing and research and development to help achieve the business-level strategy of gaining more market share with female athletes. Finally, operating strategies are the specific and concrete actions taken to manage key operating units (distribution centers, plants) and to support strategic initiatives (marketing campaigns, online distribution). Operating strategies are narrower in scope and focus on specific strategic steps that must be taken to manage the operations of the business. So, if adidas needs to revamp its marketing to engage female athletes, a possible operating strategy could be to create campaign videos and images that represent women’s stories for social media (Maguire, 2022).
These different strategies are only as effective as the strategic plan that supports them, and developing a strategic plan requires a strong understanding of both the business and the external environment in which an organization resides. Strategic planning refers to setting the mission and vision; developing policies, programs, and strategies; evaluating performance; and focusing on the forces driving change in the external environment and their likely influence on the organization’s competitive position in the market (Ferkins et al., 2005). Youth participation in sport represents a key external environment that professional sport leagues monitor regularly. Lack of involvement from youth can spell trouble for the future of an Olympic national governing body or a professional sports league. The National Basketball Association (NBA) sponsors a Jr. NBA World Championship that features both boys’ and girls’ divisions; MLB holds a Pitch, Hit, and Run youth skills competition; the NFL has the Let’s Play Football Initiative; and every U.S. Olympic sport has youth programs developed by their respective national governing bodies. These programs are strategic in nature and are intended to keep youth interested in future participation in the sport in any way possible: as spectators, customers, or possible players.
Once a strategic plan is in place, it must be implemented across all organizational units and functions and embraced by all individuals in the organization to be successful. It must also be continually reevaluated and adapted to changes in the external environment and the competitive landscape. A strategic plan, as described here, is all-encompassing and requires jumping into the water with both feet. For example, the U.S. Soccer Federation faced a make-or-break moment when The Athletic (Linehan, 2021) reported that former Portland Thorns coach Paul Riley was fired in 2015 for misconduct related to abuse, but the Thorns and the league hid the details of his termination from the public and allowed Riley to be hired by a different National Women’s Soccer League (NWSL) team. U.S. Soccer needed a clear strategy for addressing the allegations and moving forward. Cindy Parlow Cone, the president of the U.S. Soccer Federation, hired former U.S. deputy attorney general Sally Yates to conduct an independent investigation into the allegations of abuse in women’s professional soccer. After the report was released, President Cone announced, “The investigation’s findings are heartbreaking and deeply troubling. . . . As the national governing body for our sport, U.S. Soccer is fully committed to doing everything in its power to ensure that all players—at all levels—have a safe and respectful place to learn, grow, and compete” (U.S. Soccer, 2022, para. 2). U.S. Soccer announced its intention to take immediate action by convening leaders in soccer at all levels throughout the country to collaborate in developing and implementing policies and rules to prevent similar egregious conduct exceeding the scope of authority, leading to a toxic environment that is unsafe for athletes. Executing a successful strategic plan to achieve a sport organization’s mission depends on the ability of those at the top to lead and direct organizational change, create or reinvent business processes, manage and motivate people, and achieve performance goals. U.S. Soccer President Cindy Parlow Cone has her work cut out for her. It will be Cone who is on the hot seat to successfully implement strategies across the entire national soccer federation to prevent abuse and misconduct from occurring in the future.
Strategic Leadership
Strategic leadership focuses on those who have overall responsibility for the organization, as Cone does for U.S. soccer. These leaders steer and direct the organization and oversee the top management team (Cyert & March, 1963). Strategic leadership refers to the capacity of individuals to articulate a strategic vision—to “foresee” that organization’s future and think about how to achieve it and to motivate and influence others to achieve that vision. Strategic leadership centers on the ability to use strategy in the management of employees to accomplish the mission. There has long been interest in what differentiates successful strategic leaders from others, and strategic leadership research examines these individuals at the strategic center of the organization (Mintzberg, 1979) to learn about what they do and how they do it (Hambrick, 1989).
Development of Strategic Leadership
The study of strategic leadership has evolved over the past few decades. In the 1970s and 1980s, scholarship in the field of leadership dwindled, and its future was unclear. Researchers questioned the field’s direction and even questioned whether leadership mattered. Earlier strategic leadership research examined small-group leadership and applied it to middle and lower managerial levels (Bass, 1990; Yukl, 1994). However, the description of the relationship between executives and their followers did not offer a realistic understanding of the influence of top management on organizational success (Vera & Crossan, 2003). Beyond the notable research efforts on charismatic leadership (House, 1977) and implicit leadership theories (Lord, 1977), there were few new theories developed in the field of strategic leadership. A shift in the mid-1980s centered on the upper-echelon theory (Hambrick & Mason, 1984), the antecedent of the strategic leadership theory. This directed attention away from supervisory leadership theories and toward the study of strategic leadership and “new” theories of leadership: charismatic leadership (Conger & Kanungo, 1987; House, 1977; Shamir et al., 1993), transformational and transactional leadership (Bass, 1985), and visionary leadership theories (Bennis & Nanus, 1985; Kouzes & Posner, 1987). Bass’s framework of transactional/transformational leadership has proven to be useful for studying top-level executives (Lowe et al., 1996), and this is primarily because it was developed within larger organizational contexts. In fact, transformational leadership has received significant attention in sport management scholarship (Welty Peachey et al., 2015). Therefore, transformational and transactional leadership theories are important to understanding strategic leadership. Sport management scholars have also turned their attention toward theories that build our understanding of the interactions between leaders and followers, such as servant leadership (Burton et al., 2017) and shared leadership (Kang & Svensson, 2023).
Transformational and transactional leadership styles are distinct. Transactional leadership focuses on motivating individuals through carrots and sticks, or contingent-reward exchanges (Bass, 1985, 1990). Transformational leadership is characterized by individual consideration, charisma, inspiration, and intellectual stimulation (Avolio et al., 1999). The behavior of the strategic leader has a significant impact on the culture of an organization. Strategic leaders who tend toward transactional behaviors will work within the existing culture, norms, rules, and procedures (Hurley & Hult, 1998; Schein, 1992). By doing so, these leaders reinforce the existing culture, norms, and rules that have been established (Nahavandi, 1993). Transformational leaders will challenge the existing culture, norms, and rules and make changes to realign these with a new vision. Transformational leaders challenge the existing order and inspire employees to explore new ways of doing things. The transactional or transformational tendencies of strategic leaders will lead to distinct elements within the organization being emphasized over others, which results in the creation of different cultures and organizational structures. For example, transformational leaders have been found to invest more in culture-building activities and are linked to stronger and more positive organizational cultures (Wallace & Weese, 1995). In intercollegiate athletics, transformational leaders have been preferred over transactional leadership (Burton & Welty Peachey, 2009), and their influence extends to employees across the top three tiers of the organizational chart (Kent & Chelladurai, 2001). Transformational leaders foster the acceptance of organizational change by engaging athletics department employees and student-athletes in the change process (Welty Peachey et al., 2011). The ability of leaders to facilitate organizational change is an important consideration, given the calls for sport organizations to make changes in response to the avalanche of storylines involving scandals and unethical behavior (Lapchick, 2021). These storylines have shifted attention to the important role of leadership in both reforming sport organizations and maintaining an ethical climate within sport organizations (Welty Peachey et al., 2015). Servant leadership, which prioritizes the interests and needs of followers (Greenleaf, 1977), offers a promising alternative to transformational and transactional leadership styles for improving the ethical climate of the sport ecosystem. Servant leaders are associated with achieving organizational outcomes that have an ethical component (Burton & Welty Peachey, 2013). Servant leaders foster trust among employees, support procedural justice, and enhance perceptions of an ethical climate in sport organizations, which leads to better behavior and outcomes (Burton et al., 2017). Achieving positive outcomes is difficult in an industry where resources are limited and sport leaders are often required to engage in collaborative partnerships to successfully achieve their goals (Kang & Svensson, 2023; Welty Peachey et al., 2018). For this reason, shared leadership is a leadership approach that has gained traction in the industry because it emphasizes leadership as a collaborative, interactive process among multiple individuals (Han et al., 2018). With an array of leadership approaches to choose from, the most effective sport leaders are those who are able to adopt the leadership approach that fits best given the situation (Tushman & O’Reilly, 1996).
Widely debated at one time, the current conventional thinking is that strategic leadership does matter. Strategic leadership involves the creation of meaning and purpose for the organization (House & Aditya, 1997). Commissioners, presidents, corporate administrators, top executives, and boards of directors for nonprofit organizations are strategic leaders who are responsible for steering organizations toward success in the fast-paced and dynamic sport industry.
What Strategic Leaders Do
The sport industry has experienced tremendous growth in the past decade. Research and Markets (2024) reports that the global sports market will grow to $629.81 billion by 2028 from $506.93 billion in 2024. The forecasted gains in revenues are largely attributed to revenues generated from media rights and sponsorship, the growing popularity of esports, economic growth, and an increase in the number of internet-accessible devices. The dynamic environment and the fast pace of change in the sport industry make it one of the most complex and challenging industries for achieving strategic objectives. This is especially true after the coronavirus pandemic, as significant changes in technology and business models have transformed the sport industry. Although the costs of doing business continue to rise, the globalization of the marketplace has increased the number of competitors, both foreign and domestic, who seek to gain a competitive advantage and a larger share of the market. Sport scholars have found that the most successful strategic leaders in sport focus their attention on the factors over which they have some control to lead strategy, implement change, foster innovation, and build their business (Rein et al., 2015). Because of increased competition and an expectation for innovation from fans and sponsors, some sport-organization leaders have participated in the “disruption” of traditional revenue models. In spring of 2024, Paris FC announced it was offering free tickets to all its league matches until the end of the season, challenging traditional revenue models in soccer and embarking on a groundbreaking strategy to prioritize community engagement over immediate revenue. Underlying this strategy is the belief that building a strong and engaged fan base will lead to a vibrant, full stadium that will attract sponsors and investors (Laker, 2024). This marketing and sales strategy is unprecedented, and because ticket sales accounted for only 4 percent of the club’s budget, it is a calculated risk and an opportunity to explore innovative marketing strategies that aim to build brand loyalty, engage customers, and attract sponsorship revenue (Laker, 2024). “It was a kind of marketing strategy. We have to be different to stand out in Greater Paris,” said Fabrice Herrault, the club’s general manager (Smith, 2024, para. 7). This example illustrates disruption. Professional firms can no longer rely on tried-and-true business models—not in a digital age where consumers get information quicker and in myriad ways. “The basic rules of the game for creating and capturing economic value were once fixed in place for years, even decades, as companies tried to execute the same business models better than their competitors. But now, business models are subject to rapid displacement, disruption, and, in extreme cases, outright destruction” (de Jong & van Dijk, 2015, para. 1). This is true in sport organizations as professional sports teams ponder innovative strategies to get fans’ attention and persuade them to continue attending games in their stadiums and arenas. Data analytics and generative artificial intelligence (AI) have become important tools for increasing the value of investments in marketing, sales, and operations and for enhancing live sports coverage, player evaluations, sports betting, and fan engagement (Deloitte, 2024). Innovative technologies have transformed the sport landscape, making it critical for strategic leaders to adapt and learn how to effectively use data analytics and AI to achieve a competitive advantage.
Managing a sport organization centers on the performance of top-level managers and their leadership in the development and execution of a strategy. Strategic leaders are responsible for setting the vision for the organization and charting the strategic plan, which involves setting targets for performance, crafting competitive maneuvers that will lead the organization to achieve its goals, evaluating performance, and making adjustments to ensure that the organization is on course. The decision to use one weapon in their business arsenal over another requires careful research and the consideration of a number of organizational and environmental factors. Any conclusion about changes in the organization’s focus and long-term direction must be drawn carefully. Ultimately, organizations are a reflection of leaders’ decisions about where the organization is going and how it will get there.
Developing a Strategic Vision
Strategic leadership begins with the development of a strategic vision of where the organization aims to be in the future. Developing a strategic vision involves wrestling with questions about which direction the organization should take. Would changes in the organization’s delivery of products or services to customers improve the organization’s competitive position? A strategic vision expresses the aspirations for the organization and provides a bird’s-eye view of where the organization is going. To be effective, leaders must develop a vision that clarifies the organization’s direction and path. Secondly, it must provide a reference point for all strategic decisions involved in preparing the organization for the future. Good strategic visions are distinct and unique to the organization. They should stretch beyond an organization’s immediate reach to initiate action and motivate employees to move toward the directional path of achieving the vision. The absence of a strategic vision leaves the organization without a sense of direction. And as the Cheshire Cat said to Alice in Lewis Carroll’s Alice in Wonderland (1865/2013), “If you don’t know where you are going, any road will take you there.”
Dave Andrews, the chairman of the board of governors and former commissioner of the American Hockey League (AHL), has carved out a specific road for the National Hockey League’s main developmental league. According to Andrews, strategic leadership is the requisite leadership type necessary to envision, plan, direct, motivate, and execute a successful governance strategy (McAllister, 2015). In 1994, when Andrews took over as commissioner, the league launched a strategic plan based on a thorough analysis of its external environment. The strategy included making the AHL brand more vibrant, pursuing expansion into new markets with stronger ownership, and refocusing the AHL’s on-ice product on a new commitment to develop players for the NHL. In 2001, the International Hockey League ceased operations after 56 years, and the AHL absorbed its top six markets and ownership groups (McAllister, 2015). Since then, the AHL has increased its membership to 32 teams, all with NHL affiliations (Henkel, 2024).
Strategic Vision Differs From Mission
As one can gather from the AHL example, an effective strategic vision centers on an organization’s future strategic direction—the course that the organization takes and what the organization’s future product or service will be. Andrews of the AHL possesses such a vision. A mission statement captures an organization’s present business and purpose. Although a vision and mission statement can be expressed in ways that capture similar meaning, the mission statement clarifies the organization’s scope and purpose. The strategic vision is forward-looking, whereas the mission statement focuses on “who we are, what we do, and why we are here.” An organization’s mission statement should be unique from those of its competitors and should identify the organization’s products and services, who the organization serves, and how it delivers value to meet the needs and wants of its customers. Consider the mission statement of Nike (n.d.-a, para. 1):
“Bring inspiration and innovation to every athlete* in the world.
*If you have a body, you are an athlete.”
Nike’s mission statement has been recreated over time to ensure that it reflects the company’s current business situation. Nike’s mission statement does a good job of expressing “who we are, what we do, and why we are here.” There are three primary components of Nike’s mission statement: inspiration, innovation, and every athlete in the world. Inspiration represents Nike’s intention as a leading sporting goods and manufacturing company to inspire people to embrace a winning attitude to succeed. By emphasizing innovation, Nike prioritizes continual improvement through the use of new technologies across the entire company. The final component, “every athlete in the world,” indicates that Nike aims to target every consumer around the world in the future. This provides an important strategic reference point for decision makers who must ensure that Nike designs products that will attract and satisfy a broad and diverse global consumer market. Nike’s mission statement goes beyond focusing on the present business situation by integrating a sense of “where we are headed” because it includes Nike’s future strategic goal of its continued expansion into the global market, which is a forward-looking quality that is usually associated with a vision statement. This may help to explain why Nike has not published an official company vision statement.
Nike’s vision statement for its corporate social responsibility (CSR) serves as a strong indication of the business’s future strategic path. Nike’s CSR vision statement is “to help NIKE, Inc. and our consumers thrive in a sustainable economy where people, profit and planet are in balance” (Nike, n.d.-b, para. 3). The core components of Nike’s CSR vision highlight the company’s strategic direction toward a sustainable economy in which people, profit, and planet are in balance. It conveys that the company and its consumers are the primary participants in Nike’s ability to achieve sustainability in the future. Nike’s CSR vision statement’s “sustainable economy” principle implies the corresponding strategic objectives, and this provides a reference point for managers to make strategic decisions and prepare the company for the future. The third principle of Nike’s CSR vision statement, “people, profit and planet are in balance,” emphasizes sustainability and reinforces the priority of achieving balance that will allow all to benefit from Nike’s business (Smithson, 2017). Nike’s CSR vision statement offers a strong indication of what the company aims to become in the future. However, Nike would benefit from developing a formal corporate vision statement to convey the strategic course that executives have charted for the company and to provide managers with a tool that gives the organization a sense of direction.
Communicating the Vision
Strategic leaders must not only create a long-term strategic direction that provides the organization with meaning and purpose to win the support of personnel, but they must also effectively communicate the strategic vision down the line to mid- and lower-level managers and employees. Employees must be provided with a clear and convincing strategic vision that is supported by a compelling and engaging case for the direction in which the organization is going. To move this forward, employees must understand the underlying reasons for the strategic direction that management has charted for the organization. Without this understanding, it will be difficult to hold employees accountable for uniting behind management’s efforts to achieve the vision. An executive’s ability to illuminate a clear and inspiring vision of the organization’s path and destination has an important impact on the extent to which members of the organization commit, and rally behind, managerial efforts to move personnel in a common direction. Expressing the sentiment of the company’s vision is often made easier when the vision is captured in a slogan that is both intriguing and memorable. Nike’s slogan “Just do it” captures the essence of Nike’s vision, and it is easily imprinted in one’s mind. Articulating a vision that resonates with employees and makes people passionate underlies the art of strategic leadership.
Values
What an organization truly values should underlie and inform its strategic vision. Nike’s CSR vision illustrates its values, people, and sustainability as much as profit. Organizational leaders hold positions that provide them with the unique power to change or reinforce existing patterns within their organization (Sitkin, 1992). Top administrators are responsible for grounding the operations of the business on core values to sustain an effective organizational culture. Developing and maintaining a strong organizational culture and ethical value system is a cornerstone of good strategic leadership. Many organizations develop a statement of values to guide the organization’s pursuit of its vision. These core values are the beliefs, traits, norms, and behaviors expected of organizational members as they conduct business and undertake activities in the pursuit of achieving the organization’s vision. Values often relate to notions of integrity, ethical behavior, fair treatment, innovation, teamwork, superior quality, exceptional customer service, social responsibility, and civic responsibility. Typically, statements of values center on four to eight beliefs about the traits that organizational members should embrace. Top management must carefully select values, traits, and behaviors that will help move the organization strategically forward. Nike’s “11 Maxims” represent the set of principles to guide employees in their work and their representation of the global brand and include the following (Nike, n.d.-a):
It is our nature to innovate.
Nike is a company.
Nike is a brand.
Simplify and go.
The consumer decides.
Be a sponge.
Evolve immediately.
Do the right thing.
Master the fundamentals.
We are on the offensive—always.
Remember the man.
To be effective, it is a priority for strategic leaders in the sport industry to bolster energy, excitement, and enthusiasm about the organization’s core values and purpose. Nike developed a core set of management values in its “Manager Manifesto” to guide the leadership of the company. The core principles of Nike’s Manager Manifesto are (in order): Lead, coach, manage, inspire (Nike, n.d.-a). Although Nike’s 11 Maxims and its Manager Manifesto are abstract, to Nike executives, they reflect everything that the brand represents and provide room for the development of one’s own interpretation.
The degree to which an organization’s value statement translates to reality varies widely. Strategic leaders must hold organizational personnel accountable for displaying stated values to successfully infuse an ethical value system into the cultural fabric of an organization. It is critical that standards and values be supported with a monitoring and information distribution system to create transparency and, therefore, ensure compliance. Sport organizations that fail to monitor compliance are less likely to detect violations of standards and codes of conduct. Nisen (2013) provides a descriptive narrative of Nike’s experience in overseeing the values that guide business activities in the company. In 1992, activist Jeff Ballinger published an exposé of Nike in which he documented exploitation at the hands of Nike. For example, he reported that a Nike subcontractor employed an Indonesian worker for 14 cents an hour, less than the minimum wage required in Indonesia. The poor working conditions at Nike’s factories gained mainstream media attention during protests at the Barcelona Olympics in 1992 and in a 1993 CBS interview of Nike factory workers. During the 1990s, Nike’s sales declined as the company received criticism for its labor practices. By the end of the 1990s, the Nike swoosh had become the global face of abusive labor practices. In the face of declining demand and constant criticism, Nike recognized the need to change. During a May 1998 speech, then–chief executive officer (CEO) Phil Knight expressed this sentiment: “The Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse. I truly believe the American consumer doesn’t want to buy products made under abusive conditions” (Nisen, 2013, para. 18). During this speech, Knight also announced that Nike would raise the minimum age of its workers, increase monitoring, and comply with U.S. clean air standards in all factories. To this end, Nike created the Fair Labor Association, a nonprofit organization in which representatives from companies, human rights, and labor agencies collaborate to establish independent monitoring and a code of conduct, including a minimum age and a 60-hour workweek. Nike conducted an estimated 600 factory audits from 2002 to 2004 and revisited factories that were not in compliance. In 2004, human rights activists reported that Nike’s increased monitoring efforts had helped to address the most glaring and worst issues, like employees’ exposure to unsafe chemicals. In 2005, Nike made strides toward increasing transparency by becoming the first in the industry to publish a complete list of the factories it contracts with and a detailed 108-page report on the conditions and pay in its factories—in which Nike acknowledged the existence of widespread problems. Nike was able to reverse its downward spiral in the 1990s by acknowledging problematic practices and taking responsibility for making improvements. Nike has continued to fulfill its commitment to publishing the results of audits conducted, and the company has embraced CSR as a strategic priority.
There are several ways in which strategic leaders in sport can develop a strong organizational culture. One primary tactic for developing a strong organizational culture is highly abstract and involves setting an inspiring and meaningful vision (Peters & Waterman, 1982). In sport, values can be expressed in many forms. Traditions such as pregame rituals, signage at the stadium, fight songs, band formations, and mascots are just a few examples of how an organization conveys its values and vision to inspire purpose and meaning for stakeholders. Top executives should seek every opportunity to instill the strategic vision and the organization’s values through deeds rather than words. The second way that a strategic leader in sport can develop a strong organizational culture is to pay attention to details in their development of the organization’s culture (Peters & Waterman, 1982). For example, consider the NBA’s efforts to expand into Asian markets. The potential for the NBA to succeed in China was unclear when NBA China launched in 2004. When the NBA set up its office for NBA Asia in Hong Kong, it originally had three people trying to run China, Japan, and everywhere else in Asia. Since then, the NBA has been wise to continue to dedicate resources to China, which has become the league’s largest international fan base. Commissioner Adam Silver believes that the NBA has more staying power in China than they had previously thought was possible. As Silver explained, “Some people predicted that when Yao retired that we would lose popularity, in fact post Yao Ming, we’re even more popular than when he was playing. We’ve been embraced by the Chinese government, and the people—I believe—in large part because of the values of our game. Those values, like respect and teamwork and hard work, [mean] the game itself resonates with the people of China” (Amick, 2017, p. 1). The NBA’s relationship with China was tested in 2019 when Chinese broadcasters stopped airing Rockets games after former general manager Daryl Morey of the Rockets posted a message in support of antigovernment protests in Hong Kong and in 2023 when Dwight Howard referred to Taiwan as a country in a promotional video (Gonzalez, 2023). In spite of these past issues, the NBA and China appear to be in good standing, according to Yao Ming, president of the Chinese Basketball Association and former NBA star, who spoke highly of NBA Commissioner Adam Silver and the league (Gonzalez, 2023). It is clear that the long-term success of an organization is influenced when strategic leaders instill a set of values that resonate with internal and external stakeholders.
Setting Objectives
For strategic visions to become a reality, they must be translated into concrete objectives and tactics that embody the organization’s values. Managers convert the strategic vision into reality by setting objectives, or the actual steps taken to achieve desired results. Strategic objectives refer to performance targets that measure the strength and competitiveness of the organization in the marketplace and its future business prospects. Creating specific performance targets involves developing quantifiable, or measurable, hard objectives that must be achieved by a certain deadline. For example, in 2010, NFL Commissioner Roger Goodell declared the ambitious goal of $25 billion in revenue for the league by 2027. Since then, the Supreme Court paved the way for sports wagering, and the growth of revenues from gambling and media rights has made that goal within reach for one of the most popular leagues in the world. Objectives serve as yardsticks for measuring the success of the organization in achieving its mission and moving toward fulfilling its vision. Clarifying measurable, concrete objectives is of utmost value to keep track of the organization’s performance and progress. Well-stated objectives spell out exactly how much of what kind of performance is expected and when (Thompson et al., 2022, p. 31). When they are concrete and measurable, objectives are an invaluable tool for managers to communicate to employees the level of performance that is expected. Vague objectives that do not specify how much, what kind, or when lead to inconsistencies in performance that inhibit the organization’s progress.
Strategic leadership is responsible for steering the organization to perform at its full potential and deliver the best outcomes. To fulfill this responsibility, “stretch” objectives challenge personnel to perform at their highest level by setting objectives that motivate employees to push past their current performance targets to improve efficiencies and foster innovation. For example, a senior account executive might challenge themselves to surpass their number of group tickets sold from the previous year. Organizational leaders express their values and priorities to personnel in the form of incentive structures. By consistently linking extrinsic and intrinsic rewards for desirable behavior and using punishments to deter undesirable behavior, strategic leaders can strengthen the expectations and norms to support a culture that fosters the success of employees. However, leaders should be wary of a carrot-and-stick approach to achieving strategic objectives because different motivations appeal to different people.
Developing a Sound Strategy
A company’s strategic intent is exhibited in its relentless pursuit of and commitment to achieving an ambitious strategic goal. Organizations pursue a strategic objective by rallying around efforts to achieve higher performance targets, analyzing the competitive landscape, crafting offensive and defensive strategies to beat out the competition, and carefully using the resources and organizational capabilities in ways to maximize progress toward achieving the strategic vision.
The development of a competitive strategy involves examining how to best grow the business, provide value to customers, gain a competitive advantage, respond to changes in the market, manage business operations and functions, develop needed competencies, and achieve objectives and the strategic vision. The most successful strategies involve the differences in the ways the organization does things in comparison to its rivals. According to Porter (2008, p. 64), “Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.” The more fierce the competition, the stronger the organization’s commitment to differentiation should be (Moon, 2010). In order to break away from the competitive herd, it is necessary for sport organizations to examine the external environment, including all of the relevant factors and influences beyond the borders of the organization, to identify any changes or potential developments that may have an impact and influence on competitive conditions in their market. The most important strategy-shifting impacts will relate to the organization’s immediate competitive environment and the forces that drive competition: the actions of rivals, consumer behavior, supplier-related conditions, and the potential of new organizations entering into the market.
How does an organization start achieving a needed strategic focus? Birshan and Kar (2012) outline three tips. First, an organization should contextualize strategy relative to its distinct industry. In 2017, the pace of sneaker sales plunged, leaving sneaker brands and footwear retailers reeling (Liu, 2017). However, adidas was able to escape unscathed from the downward sales trend and steal market share from its big rivals in the United States. How? adidas’s competitive maneuvers to outwit Nike and Under Armour reflect a strong understanding of the dominant economic factors driving the industry and the competitive landscape. According to Baird analyst Jonathan Komp, adidas realized it was crucial “to embrace non-athlete social influencers who have resonated well within current consumer trends” (Komp, as cited in Robb, 2017, para. 5). Building on the company’s association with Jay Z and Kanye West (who now goes by Ye), adidas developed a strong following among those who wear sneakers as part of their casual wardrobe. Adidas figured out a game-changing factor to buck the downward sales trend: Sneakers are not only athletic gear; they are fashion statements. This factor became a major component of adidas’s competitive strategy, leading adidas to revive some of its classic products to cater to the retro-chic footwear trend. Adidas’s Superstar, a popular shell-toe shoe from the 1960s, bumped Nike out of the top position and became the top-selling shoe in 2017. Adidas’s U.S. market share increased by 11.3 percent, and overall footwear sales increased by around 30 percent in 2017. However, in 2022, adidas’s partnership with a celebrity whose values did not align with the brand’s became the focus of public scrutiny. Kanye West made offensive public statements that negatively affected his reputation and tarnished the adidas brand. Adidas ended the partnership and had to deal with a significant hit to the bottom line. Many companies have found the strategy of partnering with influencers effective, but they must be careful to balance rewards with risks when entering into partnerships.
The trends demonstrate that the competitive landscape is changing. Sneaker brands do not have the long-term traction in the market that they once had because of the shorter attention spans of customers and industry dynamics. This makes it more difficult to predict the shelf life of a style when it is released to the market. Organizations seek to gain a competitive advantage by doing things differently in ways that count. From developing innovative products and new styles to providing superior customer service, organizations aim to deliver unrivaled value to customers.
Second, effective strategists also address or identify future industry-related changes or disruptions (Birshan & Kar, 2012). A common concern is what will be the next innovation in technology because teams that do not make effective use of new technologies will fail to capture the markets of new generations of consumers who demand instant information and easy access to the sport experience. Traditional sport business success depended on putting fans in the stands or getting them to watch through the traditional media of television. If consumers are not in the stands or in front of a screen, how can sport businesses attract future consumers from different demographics who access information differently (McAllister, 2015)? To address future industry changes, organizations should consider performing SWOT analyses of their industries. A sport organization should make itself aware of threats (e.g., poor economy) and opportunities (e.g., increased use of social media) that may negatively or positively affect its ability to deliver value. Opportunities and threats (the O and T in the acronym) represent the external analysis of the SWOT. The S and W in the acronym refer to strengths and weaknesses. An organization must consider an internal analysis of things that it does well and areas in which it needs to improve. For example, now that many fans use social media to communicate with their favorite teams, they want quick feedback. If an organization has not set aside money for human resources to nimbly handle social media communication, this could be a weakness.
Birshan and Kar’s (2012) final suggestion notes that communication among those in the strategic process is paramount in maintaining strategic focus. Usually, there is no dearth of information or data available to the strategy team, but it is important that they communicate effectively about interpreting the data to fully understand the issues facing the business. Teams must have information about group sales, walk-up sales, season ticket sales, and corporate sponsor sales. More and more, sport organizations are hiring employees for the sole purpose of sifting through these data of key performance indicators, looking for ebbs and flows and reasons for valleys and peaks in sales and overall revenue production. The business must also coordinate consistent efforts among the various sales points in a way that reinforces the most important contributor (i.e., group sales) while improving the lowest performing (i.e., walk-up sales) (McAllister, 2015). In the past decade, data analytics has been joined with advancements in technology, leading to enhanced computing power and analytical tools that have resulted in more informed decision making across all sport organizations. Sports teams that are effective in analyzing, operationalizing, and communicating the results of data analyses are more likely to make better decisions and achieve strategic goals.
On the court or on the field, many believe that the best way for organizations to maximize their success is to win at all costs. However, it is risky for organizations to focus their competitive strategy on fielding a winning team. As highlighted by Rein et al. (2015), over the long term, a winning team does not necessarily translate into a winning business, and there are many examples that illustrate this point: The University of Connecticut women’s basketball team has won 11 National Collegiate Athletic Association (NCAA) titles under Coach Geno Auriemma. However, even after winning the NCAA championship and having a 90-game winning streak from 2009 to 2011, the team reported financial losses every year. The U.S. Department of Education (2015, p. 5) reports that the Huskies’ financial losses were up to $1.2 million after the 2012–2013 season. On the flip side, teams with losing records on the field may still be able to win in sports business. Rein et al. (2015) point to the Chicago Cubs, or the “lovable losers,” and a brand identity associated with the inability to win. Even before the Cubs captured the World Series in 2016, fans continued to attend Cubs games to enjoy a Chicago-style hot dog with an Old Style beer or to celebrate Harry Caray’s tradition of singing “Take Me Out to the Ballgame” during the seventh inning. Cub fans continued to pay high ticket prices, and when the team was losing, revenue from gate receipts actually increased. When the Cubs started to win after 2008, Cubs attendance rates declined consistently from 2009 to 2014, and television ratings decreased by over 64 percent (Rein et al., 2015, p. 6).
It is clear that sport organizations can be successful without relying on a strategy that is centered on winning, and relying on winning is a risky proposition in the sport industry. The key to long-term stability and success is to devise strategies that center on delivering value to customers using the factors that strategic leaders and organizations have some control over. Researchers have identified reasons why people attend sports games and found that the quality of the stadium, the opportunity to socialize, and the excitement associated with the games are often much more important than whether a team wins.
Implementing and Executing the Strategy
Implementing and executing strategy are the most challenging and time-consuming steps for top executives. Translating strategic plans into real action and results requires leaders to oversee organizational changes; motivate people; invest in the development of company strengths, key competencies, and competitive capabilities; and support a work environment that fosters strategy and learning. To be successful, strategic leaders must determine what has to be done in their area to execute the strategic plan and must develop the organizational structures, processes, and controls that are needed to efficiently and effectively execute the strategic plan.
Strategy execution involves staffing the organization with individuals who have the appropriate skills and expertise, as well as strategic allocation of resources. We must rely on best industry practices to perform business activities, motivate people, and sustain a strong organizational culture and work climate conducive to executing strategy, and most importantly, strategic leadership must exist to drive implementation forward and overcome any hurdles encountered along the way. Researchers have discovered that strategic leaders’ capacity to learn is crucial in their ability to develop and execute a sound strategic direction that reflects environmental forces and changes in the competitive landscape. The capacity to learn requires a willingness to tolerate small failures (Sitkin, 1992), along with an organizational context and culture that fosters learning. Cooperation, discipline, trust, and support are important elements that influence the context of an organization and its capacity to foster learning (Ghoshal & Bartlett, 1994) in the process of executing strategy.
Although this text is about leadership, the importance of managers in implementing strategy cannot be underestimated. Smaller organizations are often characterized by a CEO-centered strategy, but strategy making and the implementation of strategy should be a collective effort that involves every manager and sometimes key employees throughout the entire organizational hierarchy. The collaborative approach to developing an organization’s strategic plan ensures that the individuals who will be held responsible for implementing the strategy are also involved in developing the strategy. A collaborative approach to developing and implementing strategy often leads to more success in winning the support of personnel across the organizational hierarchy and rallying members of the organization behind the strategic vision. So, frontline managers need to be in on the strategic-planning process, particularly when it involves functional and operational strategies, which were touched on at the beginning of this chapter.
Evaluating Performance
Strategic leaders must constantly monitor the environment and external changes, evaluate the progress of the organization, and make corrective adjustments to ensure that the company’s direction, performance, and progress are in line with the implemented strategy, as long as the strategy continues to be well matched to the industry and the competitive landscape. Strategic leaders can reinforce and change the culture of a sport organization by directing their attention to the important aspects of the organization, from existing norms, patterns, roles, and beliefs to what is measured, controlled, rewarded, or systematically addressed (Schein, 1992). Shifts in competitive conditions often serve as triggers for decisions about whether to continue or change the organization’s strategic direction, objectives, strategy, and the steps used to execute strategy. Changes that are disruptive to competitive conditions raise questions about the relevance and strength of the strategic direction of the organization. Therefore, the strategic vision, objectives, strategy, and the steps used to execute the strategy are never final; strategic leaders must be engaged in an ongoing process of revisiting the strategic plan and keeping an eye on internal and external conditions.
Good business entrepreneurship underlies the ability to craft a good strategy. The CEO of the organization serves as the captain of the organizational ship. The CEO carries the torch when it comes to being the chief direction setter, objective setter, strategy maker, and implementer of strategy because they are ultimately held responsible for the results that the entire enterprise achieves and the progress that is made toward the strategic vision.
Situational and Personal Characteristics of Strategic Leaders
The building blocks of strategy making are straightforward: Develop a strategic plan, implement it, and execute it to the fullest extent possible while making adjustments and corrective actions as necessary to succeed. However, the leadership challenges throughout this process are complex. Researchers have found many factors that influence the effectiveness of strategic leaders, such as discretion, strategic flexibility, and managerial wisdom.
The extent to which leaders found themselves in a situation where they had discretion determined the relationship between their strategic choices and organizational performance and outcomes (Hambrick & Finkelstein, 1987). Discretion reflects the ability to take actions and the extent to which these actions are met with resistance or accepted in light of environmental constraints, demographic and personality characteristics, and organizational factors. When a leader has more discretion, the greater the impact their choices will have on the organization’s success. Additionally, past research suggests that demands, expectations, and constraints on leadership have a significant impact on the choices made by leaders (Selznick, 1957/1984; Stewart, 1982). Interestingly, the degree to which strategic leaders believe that they have discretion has an impact on their success. When leaders enjoy large degrees of discretion but they do not perceive this, they are unlikely to take action. In contrast, when leaders mistakenly believe that they enjoy a large degree of discretion, their actions will usually be met with fierce resistance and lead to failure. In sport, the discretion that strategic leaders use may be met with public scrutiny, and there are numerous examples of this, from NFL Commissioner Roger Goodell’s discretion in determining the degree of severity for sanctions against players for domestic violence to MLB Commissioner Rob Manfred’s approach to penalizing players who participated in the Astros electronic sign-stealing scandal in 2017 and 2018. It is clear that strategic leaders must carefully assess the degree of discretion used in decision making.
Strategic leadership occurs in an ambiguous, complex, and increasingly turbulent environment in which leaders are overloaded with information (Eisenhardt, 1989; Hambrick, 1989). In an increasingly competitive landscape, organizational success is dependent on the ability to change and demonstrate strategic flexibility (Hitt et al., 1998). Strategic flexibility refers to the ability of an organization to act quickly and respond to changes in competitive conditions and the environment. Again, this is situational. The organization’s capacity to change allows the organization to perform and take advantage of future opportunities (Sanchez et al., 1996). Leaders at the top of the organization largely determine the extent of an organization’s ability to change and respond to environmental changes and market dynamics. The capacity of senior executives to recognize new information, process it, and be able to apply it to achieving organizational objectives is important to enhancing the fit between an organization and its environment. Therefore, it is important for CEOs to exhibit cognitive and behavioral complexity in decision making, demonstrate strategic flexibility, and be open to and accepting of change (Black & Boal, 1996).
The success of strategic leaders often depends on their approach to completing tasks and their ability to effectively manage the most important resource of an organization: people. Managerial wisdom (Malan & Kriger, 1998) refers to the capacity to recognize patterns and changes in the environment, along with an understanding of people and their relationships, or social intelligence. The ability to recognize changes in the environment (Osborn et al., 1980) and to understand others and their relationships is interwoven in the fabric of managerial wisdom. Social awareness (e.g., showing empathy) and social skills (e.g., managing conflict) are two important components of social intelligence and managerial wisdom. The third component of managerial wisdom is the ability to take the correct approach at the critical moment or right time (Bartunek & Necochea, 2000). Table 8.1 captures the key characteristics of strategic leaders. Readers will note that the characteristics are either termed “situational” or “personal” in the table, meaning that the characteristic is either personal to the leader or emanates from the external and internal environments the organization operates in (situational).
TABLE 8.1 Situational and Personal Characteristics That Affect Strategic Leaders
Characteristic
Explanation
Example
Discretion (situational)
Reflects the ability to take actions and the extent to which these actions are met with resistance or accepted in light of environmental constraints, demographic and personality characteristics, and organizational factors
When MLB players were questioned by members of Congress about PED use in a 2005 hearing, the nation’s lawmakers had little discretion to change baseball. However, the commissioner of MLB at the time, Bud Selig, and MLB players’ union lawyer Donald Fehr had more discretion to take action to solve MLB’s PED issue.
Flexibility (situational)
The ability of an organization to quickly act and respond to changes in competitive conditions and the environment
Despite the regular occurrence of spectators being struck by foul balls, it was not until 2018 that MLB teams extended netting to the end of each dugout. This delayed action illustrates a lack of flexibility for MLB to make changes quickly.
Managerial wisdom (personal)
The capacity to recognize patterns and changes in the environment, along with the understanding of people and their relationships, or social intelligence
In 2014, defensive end Devon Still was cut by the Cincinnati Bengals but then re-signed to the team’s practice squad so that he could continue to get health benefits to cover his daughter’s cancer treatment. The move showed managerial wisdom by Bengals leadership and illustrated the importance of relationships over revenues.
Interdisciplinary view (personal)
Recognize the impact of department decisions on other departments and units in the business
When the Baltimore Orioles made the decision to allow youngsters 9 and under to get into games for free, this directive took an interdisciplinary approach because the unprecedented move would affect the team’s marketing and community outreach departments.
Problem-oriented (personal)
Understand the source of the problem they are trying to resolve and search for methods and information that may contribute to the solution
The Atlanta Falcons recognized the inability of families to afford to come to games because of high concession prices. The Falcons’ ownership showed it is problem-oriented by offering less expensive food options as a solution.
Committed to differentiation (personal)
Constantly examine what they can do differently from others to offer unique value
Newly built sport venues seek differentiation, particularly in addressing a memorable fan experience. The Little Caesars Arena, which houses the Detroit Red Wings and Detroit Pistons, offers innovation not demonstrated in other venues. The venue has a 12-laser projection system that allows the teams to animate the entire arena, projecting full-motion video and images.
Students of technology (personal)
Interested in learning about innovations in technology and recognize ways these can be leveraged into new opportunities for their organizations
Bowling industry executives have had to become students of technology in order to reach new customers. HD video walls, massive sound systems, and food-ordering kiosks are some of the innovations that Bowlero Corp. is using to attract young bowlers.
Bottom-line focus (situational/personal)
Understanding the important role of generating revenue for the organization and keeping costs under control
The phenomenon of “cord-cutting” has hurt media organizations like ESPN. Fewer people are subscribing to cable TV, which has cut into the network’s bottom line. This has caused leaders to enact layoffs to cut costs.
Five Key Characteristics of Strategic Leaders
Rein et al. (2015) examined the traits of strategists in the sport industry and identified five key characteristics exhibited among successful strategic leaders: interdisciplinary view, problem-oriented, committed to differentiation, students of technology, and focus on the bottom line.
First, strategic leaders maintain an interdisciplinary, holistic understanding of their organizations and recognize the impact of department decisions on other departments and units in the business. Second, they are issue-oriented because they begin with the source of the problem that they are trying to resolve and search for methods and information that may contribute to the solution. Packers President Mark Murphy’s investment of hundreds of millions of dollars in a mixed-use development next to the Lambeau Field was a solution to a potential future issue: whether the team would be able to stay in Green Bay. With the Packers ranked ninth in revenue during the 2017 NFL season and a 131,000-person waiting list for Packers season tickets, it may have seemed unlikely for the team to move. However, the decision by the NFL to allow teams to leave their long-time markets was cause for concern. According to Murphy (Kaplan, 2017), “Maybe we get a collective bargaining agreement with no salary cap, or revenue-sharing changes, when the current CBA [collective bargaining agreement] expires in four years” (para. 2). The purpose of this investment in Titletown was to help secure the team’s future in the smallest market of the NFL, Green Bay. By dedicating the acres next to the stadium to offer the community a recreational area with a snow tubing hill, a football field, a playground, and an NHL-size skating rink, as well as a plaza featuring restaurants, cafés, and other stores, Murphy believed that this would “allow the Green Bay economic base to become strong enough to support an NFL team at a high level” (Kaplan, 2017, para. 41). Once the project was completed, it was clear that Murphy’s strategic plan was well conceived. The Packers’ future in Green Bay appears to be secure for the long term, and Titletown has become a valuable community asset that continues to thrive. The Titletown development was a pivotal factor in the league’s decision to award the 2025 NFL Draft to Green Bay, which is projected to have a $20 million local economic impact and around $90 million statewide (Ryman, 2024). Murphy analyzed his environment, identified a potential future issue in the long-term economic feasibility of maintaining the Packers in Green Bay, and developed a strategic solution.
The third key characteristic of strategic leaders is their commitment to differentiation. They constantly examine what they can do differently from others to offer unique value. The NFL differentiated itself during the 2023 season by capitalizing on the romance between Taylor Swift and Kansas City Chiefs tight end Travis Kelce. Taylor Swift’s attendance at Kansas City Chiefs games dramatically increased female viewership of NFL games (Acton, 2024). The league and its affiliates were wise to take advantage of this opportunity to differentiate. Broadcasts of the Chiefs games on Fox and NBC repeatedly cut to shots of Swift with famous friends Blake Lively and Ryan Reynolds. The NFL created social media content, like clips of Swift embracing Kelce after the game, to engage female fans. After Taylor Swift wore an upcycled Kansas City Chiefs Jacket designed by Kristin Juszczyk that created buzz among fans, the NFL signed Juszczyk to a deal to support its logo use on her designs (Acton, 2024). By leaning into the moment, the NFL captured the attention of one of all professional sports leagues’ most desired demographic: women. Because women represent the majority of purchasing power in U.S. households, comprise about half of the U.S. workforce, and make up more than half of the U.S. population (Rao, 2023), the NFL was wise to seize a unique opportunity to differentiate itself in an authentic way that resonated with women.
The fourth characteristic of successful strategic leaders in sport is their commitment to learning about technology. As students of technology, they learn about innovations in technology and recognize ways that these can be leveraged into new opportunities for their organizations. The Houston Dash had this in mind when the team partnered with the Famous Group to bring Vixi Suite to Shell Energy Stadium for the 2024 season. Vixi Live, the patented video selfie software, will give the Dash the chance to be the first NWSL team to use the fan engagement platform and enhance how fans interact with the team on game days (Houston Dynamo FC, 2024). The Vixi Suite will give fans the tools to shoot a live video selfie and immediately observe themselves on the video board (Houston Dynamo FC, 2024). The new partnership differentiates the Dash from other teams and creates a fun, immersive experience that revolutionizes how NWSL fans engage with the game.
Finally, the fifth critical characteristic of effective strategic leaders is their focus on the bottom line and the important role that they play in generating revenue for the organization. After all, many sport organizations are profit-driven entities. Returning to the example of Taylor Swift, some NFL fans criticized the league for giving Swift too much attention. However, the bottom line provides irrefutable evidence that the NFL made the right move. According to an analysis by Apex Marketing Group, Swift generated $331.5 million in equivalent brand value for the Chiefs and the NFL in just 4 months (Fleming, 2024). Effective strategic leaders help sport organizations achieve higher profits to satisfy key stakeholders.
1. Overview of Strategy in Sport
Role of Leadership: Leaders must build consensus and coalitions among stakeholders to implement organizational changes (e.g., NFL Commissioner Roger Goodell managing 32 independent team owners).
Adapting to External Challenges: Sport organizations must respond to safety concerns, media evolution, market saturation, and player health issues (e.g., safety rule changes regarding hip-drop tackles).
2. Strategy and Strategic Planning
Strategy Defined: A plan of action designed to achieve major aspirations, foster growth, satisfy customers, and secure competitive advantage.
Four Levels of Strategy:
Corporate Strategy: High-level executive plans to maximize overall organizational performance across all business units (e.g., adidas overarching corporate direction).
Business Strategy: Targeted actions designed to achieve specific goals within one line of business or program (e.g., expanding market share among female athletes).
Functional Strategy: Operational practices used to execute specific business functions like marketing, sales, or R&D.
Operating Strategies: Narrowly focused actions to manage concrete operational units and initiatives (e.g., targeted social media video campaigns).
Strategic Planning: Setting mission and vision, creating policies, evaluating performance, and monitoring driving forces in the external market.
3. Strategic Leadership Theories
Strategic Leadership: The ability to articulate a clear vision, anticipate future trends, and influence others to achieve organizational goals.
Key Leadership Models:
Transactional Leadership: Focuses on performance through contingent rewards (carrots and sticks) and operates within established organizational culture.
Transformational Leadership: Uses charisma, inspiration, and intellectual stimulation to challenge existing norms and drive change.
Servant Leadership: Prioritizes the needs of followers to build trust, promote procedural justice, and improve ethical climate.
Shared Leadership: Views leadership as an interactive, collaborative process distributed across multiple individuals.
4. Strategic Vision vs. Mission Statement
Strategic Vision: Forward-looking view that defines where the organization is headed and what it aims to become.
Mission Statement: Focuses on the present state—defining who the organization is, what it does, and why it exists.
Communicating Vision: Requires clear and compelling messaging, often reinforced through memorable slogans (e.g., Nike's "Just Do It").
5. Organizational Values and Culture
Core Values: Beliefs, traits, and behavioral norms expected of all organizational members.
Culture Building: Established through executive actions, transparent compliance monitoring (e.g., Nike's supply chain labor audits), and brand traditions.
6. Setting Objectives
Strategic Objectives: Quantifiable, measurable performance targets tied to clear deadlines (e.g., NFL's $25 billion revenue goal).
Stretch Objectives: Challenging targets designed to push performance, enhance efficiency, and motivate innovation.
7. Strategy Execution and Differentiation
Competitive Differentiation: Choosing a distinct set of activities to deliver unique value rather than mimicking competitors.
SWOT Analysis: Assessing internal Strengths and Weaknesses alongside external Opportunities and Threats.
Non-Reliance on Winning: Relying solely on on-field winning is risky; business success depends more on stadium experience, fan engagement, and social value (e.g., Chicago Cubs fan experience vs. UConn basketball losses).
Execution & Learning: Demands effective resource allocation, skilled staffing, and a supportive culture tolerant of small educational failures.
8. Characteristics of Strategic Leaders
Situational Characteristics:
Discretion: The extent of freedom a leader has to act within environmental and organizational limits.
Strategic Flexibility: The organization's capacity to quickly adjust to competitive shifts.
Personal Characteristics & Five Key Traits:
Managerial Wisdom: Social intelligence combined with environmental pattern recognition.
Interdisciplinary View: Understanding how choices in one department ripple across the entire organization.
Problem-Oriented: Identifying root causes of issues to construct targeted solutions.
Committed to Differentiation: Continually pursuing unique ways to deliver consumer value.
Students of Technology: Actively leveraging technological innovations (e.g., data analytics, AI platforms).
Bottom-Line Focus: Maintaining strong oversight on revenue creation and cost management.