How Good is the Second Act for a Leader?

Last week, I examined Mike Vrabel's path to the Super Bowl as a head coach in the National Football League.  I noted that 33% of Super Bowl winning head coaches had achieved their championship after failing to win a title with their first team.  The data suggest that a coach's second act can be more successful than the first, perhaps because leadership is a learned capability.   All-time great coaches such as Andy Reid, Bill Belichick, Mike Shanahan, and Don Shula all seemed to have learned from their successes and failures during their first tenure as a head coach.  

Today, I decided to examine whether this phenomenon was unique to the NFL.  Does the same pattern apply in the other major sports in the United States?   The table below shows the data for the past 50 years in each of the four major sports leagues.  As it turns out, the NFL is not unique.  In fact, the other sports show an even more dramatic positive effect for coaches in their second (or later) act!  In Major League  Baseball and the National Hockey League, more than 60% of championship coaches in the past 50 years did not win during their first tenure as a head coach.  All-time great hockey coaches and baseball managers in this group include Scotty Bowman, Al Arbour, Joe Torre, Dusty Baker, Terry Francona, and Tony LaRussa.   

By the way, during my original analysis of the NFL, I also noted that the sport's championship coaches demonstrated that the curse of expertise is very real.  The curse of expertise means that people with specialized knowledge who have achieved remarkable success often struggle to teach others, because they cannot easily put themselves into the shoes of someone for whom results do not come as easily.  In the NFL, only one Super Bowl winning head coach earned entry into the Hall of Fame as a player.  Is the curse of expertise also evident in the other sports?  Indeed!  Few Hall of Famers won championships in the last 50 years as a head coach: NFL (1), MLB (1), NHL (2), and NBA (4).  

Interestingly, second act success stories seem quite rare in business.  Most CEOs seem to achieve their most prominent success during their first tenure as a leader.  A few people stand out as having more successful second acts.  These include Reed Hastings, Eric Schmidt, and Stewart Butterfield.  The question that I'm not sure I can answer is:  Why are there more highly successful second acts in sports than in business?  Perhaps companies simply don't give many people that opportunity for a second chance if they have struggled during their first tenure as a chief executive.  Others would argue that talent matters more than coaching in sports, and that coaches win championships when they find the right fit between awesome talent and their good leadership skills.  Perhaps we simply attribute too much of a company's success or failure to the CEO, and therefore, we do not see through the struggles of a firm to identify the strong leadership capabilities of its top executive.  

Lessons from Patriots Coach Mike Vrabel's Leadership Journey

What can we learn from the leadership journey of New England Patriots coach Mike Vrabel?  This week, I sat down with Bryant University writer Bob Curley to share my thoughts, including some interesting data about other coaches in NFL history. 

Lesson from the Closing of the Belichick Era in New England

 

Source: ESPN

Simple, but powerful, lesson from the Belichick era's closing chapter in New England: Open up your inner circle as you grow older, invite new voices inside, and keep questioning whether the formula for past success continues to apply in a changing environment. 

Three Myths and Lessons from the NFL Deflateglate Debacle

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.  

Differences Key to Negotiations: Ask Bill Belichick!

The 2011 NFL Draft has just ended, and all of us can learn a valuable lesson from Coach Bill Belichick of the New England Patriots (even if you are a slightly misguided fan of the dreaded New York Jets).  Belichick has become known for "trading down" in the draft.  Put simply, he often gives up a high draft pick for a high draft pick the following year, providing the other team also gives him an additional lower draft pick as part of the trade.  Take this year's trade with the New Orleans Saints for instance.  He gave up the Patriots' pick at the bottom of the first round for the Saints' pick in next year's first round (expected to be about in the same exact spot).  However, the Saints also had to give the Patriots a second-round pick this year.   These moves frustrate Patriots' fans, as they tend to not like when Belichick gives up the chance to take a flashy, well-known first round player in the current year.  However, he explains that these moves provide the Patriots "good value" - after all, the Patriots got that additional pick from the Saints.

Interestingly, academic researchers Cade Massey and Richard Thaler have examined the NFL draft and shown that, in the past, general managers tended to overvalue first-round picks.  In other words, teams gave up too much to move up and get another first round pick in the draft.  The brainy Belichick has examined this research, and he takes advantage of the fact that teams are often willing to pay too much to move up in the draft.  So, he gladly makes the trade and moves down.

However, there's more to this story.  By now, most general managers have become aware of this tendency to overpay for first round picks.  Yet, people still make trades like this one between the Saints and Patriots. Why?  The answer lies in the fact that Belichick may have a lower "discount rate" than other general managers. In other words, he may not discount the value of picks in future years as much as others do.  He has a more long term view. Other general managers may have a much more short term orientation, valuing the pick today MUCH more than the pick next year or thereafter.  Naturally, with three Super Bowl championships and a supportive owner, Belichick can afford to adopt a long term view. Some may argue that the Saints gave up too much here, but to them, this made good sense.  The same holds true for the Pats, because they have a longer term orientation. 

The lesson here though is that DIFFERENCES in interests and perspectives provide the MEANS FOR A NEGOTIATED AGREEMENT.   Negotiation scholars tell us this all the time.  Two parties often will find a resolution not by focusing on common ground, but by understanding their differences and using those to reach an agreement. In this case, the Saints and Patriots have a difference in discount rates. From that, they are able to find a mutually beneficially trade arrangement.  We should all take a page from these two teams.  Discovering our differences with other parties can pave the way to an agreement that makes both parties quite content.