Yes, all of us here in New England enjoyed yesterday very much. Our four-time Super Bowl winning quarterback prevailed in federal court over the National Football League and its commissioner, Roger Goodell. As I reflected on this debacle over the past seven months, I discovered three myths that have prevailed at times. As we debunk each myth, we find lessons for all organizations and leaders.
Myth #1: Attendance, television viewership, revenues and profits are at an all-time high. Recent scandals and public relations disasters have not decreased any of these key metrics. Therefore, these major stumbles on the part of the NFL don't actually matter much.
Reality: Serious leadership and public relations mistakes have consequences, even if they do not lead to revenue and profit decreases in the short run. Why? Consider other stakeholders for a moment. When a company stumbles badly as the NFL has, you have to ask yourself: How do these events affect other constituencies besides our customers? For instance, does this crisis affect employee engagement? Does it diminish our ability to attract and retain great talent? Consider whether top female lawyers are more or less willing to work for the NFL in the wake of the Ray Rice scandal. Similarly, you can ask: Are other organizations more or less willing to partner with the NFL on key initiatives? You can certainly imagine how some organizations might choose to partner with other sports or entertainment entities because of the negative publicity that might come with a close affiliation with the NFL.
Myth #2: The owners have (and should) back Roger Goodell as commissioner because he has been good for the bottom line. Sales and profits have soared under his leadership.
Reality: In major league baseball, a new metric has emerged in recent years. It's called WARP (wins above replacement player). How much value does a player provide ABOVE AND BEYOND that of a hypothetical replacement player (an inexpensive Triple A call-up who plays the same position). When we think about leadership of a major organization, we should consider that person's VARL (value above replacement leader). Could some other leader step into the job of NFL commissioner and achieve similar financial results. I would contend that many other talented people could attain the revenue and profit levels achieved by the NFL during Goodell's tenure. The sport is simply that popular, and the groundwork for that success was laid by Goodell's predecessors. Too often, companies provide incredibly high compensation packages for CEOs because the board somehow convinces themselves that the person is indispensable. Instead, they should seriously ask: What is this CEO's VARL?
Myth #3: Better data lead to better decisions. A better investigation would have led to a very different result.
Undoubtedly, the NFL bungled this entire inquiry. Top executives' lack of knowledge of the Ideal Gas Law, for instance, is simply astounding. However, better data do not always to improved choices. The bottom line: this entire matter is an incredible example of the power of confirmation bias. Put simply, people look for and rely upon data that confirms what they already believe. The investigators fell into this trap. They gathered and assimilated data in a highly biased manner. The reporters and analysts all fell into the confirmation bias trap. Fans naturally exhibited the bias as well. We all saw what we wanted to see in the data. The same confirmation bias affects corporate decisions of all kinds. More data do not always lead to better decisions, because we gather and analyze data in a biased manner.