What Apple (and maybe you, too) can learn from the NFL fumble

By Jack and Suzy Welch
September 28, 2012

That hooting-and-hollering you heard Thursday morning? Yep, that was us, celebrating the end of the NFL strike. Or maybe you didn’t hear it…over your own ruckus.

And why shouldn’t we all be thrilled the National Football League is back in action? Pro football is the ultimate viewing experience – edge-of-seat good, heart-thumping good, and as the season comes to its climax, epic-entertainment good. Frankly, over the past decade or so, the NFL has designed the perfect product, thanks to the leveling effects of the player draft and the distribution of TV revenue.

It’s inimitable.

And that’s exactly why the NFL strike shouldn’t become the sports trivia factoid it’s destined to become starting, oh, as soon as next week, when a full schedule of well-refereed games puts the whole debacle behind us. Because the NFL strike offers a great business lesson. Not for the NFL, actually, but for every company with high market share, like, say, Apple, Google, Facebook, and most important, maybe for you.

Look, the NFL strike occurred, very simply, because pro football has become a virtual monopoly. When you need your football fix, there is no other serious major-league option. And as much as we love baseball, basketball and ice hockey, none of them offers the same superhuman theatrics, downright dazzle and consistent wow factor. That reality is a testament to the acumen of the NFL team owners and management, who have earned their dominant market share with years of continual innovation and exceptional execution.

But monopolies, and more to the point here, most companies approaching monopoly status because of sustained success, almost invariably become breeding grounds for arrogance, complacency and my-way-or-the-highway mindsets. That has to be what happened with the NFL’s ordinarily smart and savvy owners, who successfully settled their differences with the players in 2011 and later that same year signed TV deals worth some $27 billion through 2022. Otherwise, there’s no explanation for why the commish, Roger Goodell, and the owners to whom he reports took on the refs without a viable game plan, i.e., without a cadre of proven replacements.

Regardless, enter negotiations the NFL owners did, only to quickly encounter another immutable law of business: You can’t aggravate your customers. It saps goodwill. It damages trust. It hurts the product. It undermines the brand. It’s just bad business.

Aggravated customers are one sure-fire way you become vulnerable. Goodell must know that now. Maybe that’s why in announcing an agreement with the refs, he apologized to the fans.

Because of its dominance, the NFL will recover from this ball-dropping blunder. But most high-market-share companies wouldn’t have the same luck. High market share is not the same as forever market share. Indeed, even if you own 75 percent of your market, you need to constantly keep believing in your bones, feeling in your skin, and reminding yourself at every turn that somewhere a competitor is out to eat your lunch. It could be a scraggly group of engineers in a garage three miles away. It could be a well-funded company in India or China just waiting for a chance to erode your hegemony. You may think you’re inimitable. They’re betting their future on the fact that you’re not.

Eighteen years ago, legendary Intel CEO Andy Grove coined the phrase, “Only the paranoid survive.” Its meaning, simply put: fear the competitors you don’t see more than the ones you do, and always, always, always put your customers first.

That credo, it could be said, doesn’t really apply to the NFL with any kind of urgency.

But the NFL strike is a great reminder that it applies to nearly everyone else.

PHOTO: An NFL referee rubs his eyes before the Cleveland Browns play the Baltimore Ravens during their NFL football game in Baltimore, Maryland, September 27, 2012. REUTERS/Patrick Smith

3 comments

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The aggravated customers never stopped watching the product – the whole assault on the replacement referees was a media pro-union campaign. You would think that prior to this referees never made bad calls – which certainly was not the case. Not that the replacements disproportionately made bad calls – in fact the manufactured storm over the end of the Packers-Seahawks game was just that – manufactured. With simultaneous possession of the ball, it goes to the offensive player under the rules – was it a close call, a judgment call? – yes – and by definition those are controversial. And, BTW, what were the main issues in this dispute? – the referees wanted to hold on to a legacy pension plan instead of a 401K (well, welcome to the rest of America)and they opposed the NFL hiring more regular referees – just another attempt to keep all the work to themselves – not exactly idealism.

Posted by SayHey | Report as abusive

It would be nice to have some background information for posts like these. I follow your blog from India. It is not always possible to be aware of all current happenings in the U.S.

Posted by MonojitBanerjee | Report as abusive

In the most important debate of his political career, the Vice President decided it was acceptable to make the discussion a “laughing matter”. In his duties as Vice President, or should he be required to assume the duties of the President, do we want a person that considers the most important discussions and decisions of his office to be a “laughing matter”, condescending and rude to the listener who could very well be a very sensitive and volatile adversary? Or, do we want a level-headed, respectful, and polite champion for our best interests that is a gentleman with decorum and basic manners?

Vice-President Biden is an embarassment to the Office of The Vice-President, to the American people, and to himself.

Posted by Anonymous | Report as abusive