How Business is Like A Game of Cricket
Image: Rotman School of Management
ROGER L. MARTIN
Designation: Dean of the Rotman School of Management, University of Toronto
Work: Author of several books including The Design of Business: Why Design Thinking is the Next Competitive Advantage, The Opposable Mind: How Successful Leaders Win through Integrative Thinking, and Diaminds (with Moldoveanu).
Education: Bachelor’s degree from Harvard College, with a concentration in Economics and MBA from Harvard Business School.
Next up: Co-authoring a book with ex-CEO of Procter & Gamble A.G. Lafley on how to think about strategy. “Most people make strategy about plans, not fundamental choices. Strategy is about a small number of very specific choices.”
Think of all the time you spend glued to the telly watching cricket. You cry yourself hoarse rooting for your favourite team through every nail-biting moment. But what if you discover that the game was fixed? That your team won not because it was the better team, but because the losing team took money and agreed to lose?
Roger Martin, dean of Rotman School of Management at the University of Toronto and a self-proclaimed sports buff, has been pondering this problem for a while. Martin says, “People who create the rules of the game have to enforce them so that it is played best for the fans.”
That’s what happened in the National Football League (NFL), the highest level of professional football in the US. In 1962, a scandal erupted in the NFL when two players betted on games — including the ones they were playing. Pete Rozelle, legendary NFL commissioner who was in charge at that time, punished them severely and in order to prevent future scandals, Rozelle established an agency that identifies and prevents player involvement in betting.
According to Martin, in sports such as football there is a real game and an expectations game, and it is when the two games start to intersect that problems happen. “In the real game, players go into the real field and play for 60 real minutes with real passes and real touchdowns, real scores and with a real winner and a real loser. Associated with that is this expectations game when people look forward to Sunday and form expectations about that and bet on that basis,” says Martin. On the basis of these bets, bookies constantly adjust the ‘point spread’, the forecast of the margin of defeat so that there is even money on either side. The pitch gets queered when the real game gets influenced by the expectations game.
What Rozelle did was separate the real game from the expectations game so that its integrity is maintained and fans get their money’s worth. That, says Martin, is the big lesson that businesses haven’t learnt. Businesses, too, have a real game and an expectations game, he says. The real game is one in which a company produces goods and serves the customer. The expectations game is played in the stock market.
In his latest book titled Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn From the NFL, Martin demolishes the long-cherished notion that businesses exist to maximise shareholder value, a theory that led to an obsessive focus on stock-based compensation for executives.
Considered one of the world’s leaders in design thinking — a particular approach that is becoming increasingly popular in management and engineering — this is the first time the consultant-turned-academic has attempted to offer a fix-all solution.
Most of his previous books are on business design and integrative thinking. Though the latest book reads differently from the earlier ones, Martin insists there is a common thread: “What characterises my work is that I tackle a commonly held theory that causes us to act in a certain way. When that theory does not produce the results you want, what’s a better theory?”