Tuesday, September 08, 2009

Bill Belichick: What Most Leaders Won't Do

Over the weekend, New England Patriots coach Bill Belichick traded Richard Seymour, one of the franchise's very best players over the decade. Seymour had starred on each of the team's three Super Bowl championship teams since 2001. In return, the Patriots received the Oakland Raiders' 2011 number one draft choice. Now, Seymour is not the player that he once was, but he still contributes significantly on the field. Trading him away may have weakened the Patriots a bit in the short run, but without question, the trade benefits the team substantially in the long run. That number one draft choice received in return for Seymour has the potential to be a cornerstone player for the team for another decade.

Far too many sports teams hang out to the aging stars for far too long, or they wait until they have started showing a considerable decline in skills before trading or releasing the player. Very few coaches and general managers have the guts to make the type of trade that Belichick just made, despite the fact that is a major positive for the long run. Most coaches simply won't make the short term sacrifice. Belichick, of course, does not have to worry about job security. He has a tremendous track record and the complete trust of his boss, Patriots' owner Robert Kraft.

CEOs and other business leaders could learn from this episode. I would argue that few executives have the courage to make the type of move that Belichick just made. Personal loyalties, coupled with incentive structures that heavily emphasize short term performance, tend to cause leaders to shy away from making the short run/long run tradeoff that Belichick just made. However, sustaining competitive advantage over the long haul requires just these types of tradeoffs at times.

1 comment:

Brian said...

Professor Roberto, your point is especially poignant today. Companies all over the country are being forced to deal with underperforming employees and processes as a result of the economic slowdown. The question we must ask is why leaders wait until there is a crisis rather than maximizing profits consistently even when times are good?