THE BLOG

Why We Love Sports and Don't Like Business and Government

02/15/2011 10:43 am ET | Updated May 25, 2011

Every sport imparts certain unique implicit values. For example, as we portray in From the Rough, in golf, a competitor plays with integrity and with what he's got. However, there are certain values associated with all sports. Those values help sports succeed for participants, spectators and investors. When we think of great leaders and teams today, we do not think of great political figures, but of legendary coaches like John Wooden of UCLA, Vince Lombardi, Eddie Robinson of Grambling, or Joe Paterno of Penn State, and their teams.

Why do government, health care, education, and most other businesses fail to measure up to the performance excellence, the economic performance and entertainment value of sports?

Professional and college sports are true competitive meritocracies.

We demand excellence from sports, and the owners of sports franchises feel pressured to deliver excellence. As a result, most sports franchises take decisive action when their team loses consistently.

Teams fire non-performing managers and coaches. They create highly competitive processes to source and test talent, and get rid of even beloved underperforming players. Athletes do not promote a seniority system, because they recognize that performance excellence makes the overall product viable.

Unfortunately, the common thread running through government, health care, education, and many businesses is that they function to enable employees to stay employed, not to deliver excellence, In government, health care, and education, collective bargaining agreements make reducing non-performers extremely difficult. Closing poor quality, high cost organizations is very difficult because politicians, business leaders, and labor unions lobby to preserve jobs even bad ones deliver.

Sports is data driven and transparent.

As a child, I collected and traded baseball cards, and have always been a sports statistics junkie. Baseball embraced publicly available statistics almost from the beginning, as Alan Schwartz's pointed out in The Numbers Game. Bill James revolutionized baseball's statistical reporting systems with his Baseball Abstract series. Michael Lewis transformed baseball as a business with Moneyball. Beyond periodic statistical reporting, daily sports team performance is reported everywhere. Moreover, statistical reporting keeps improving to insure accuracy.

In government, education, and health care, there is ferocious resistance to any data analysis or reporting that would tell the public how service is being delivered. Governments are in deep financial trouble because the true retirement benefits costs were hidden for so long. Teachers unions strongly oppose any actionable performance reporting. Our health care system's best kept secrets is that over 200,000 people die unnecessarily in hospitals annually.

Business performance reporting is better, but the average person has an easier time figuring out how a favorite team is performing than figuring what's going on with even a public company. Misguided government regulation, accounting-driven reporting diverging from economic reality, and business executives who, for competitive reasons, try not to be transparent, have made individual investing riskier than necessary.

We understand sports better than other sectors.

Most of us have played sports and understand how athletes, coaches, and general managers do their jobs. What we do not learn as a participant, we learn in 24x7 media discussions.

Few of us had granular exposure to business when growing up. We pay a lot of attention to health care, education, and local government, but their complexity makes understanding challenging, a complexity driven by government laws and regulations. Federal government school bus regulations span 300 pages. While driving a school bus is simpler than hitting a golf ball, running a school bus service is exceptionally and probably unnecessarily complex.

Sports have transcended local, regional, and national barriers to become global.

The market for sports talent sourcing and for marketing outreach is global. Every sport has sourced talent outside its borders, and every major sport originating in one country has exported its entertainment to many others. Baseball, basketball and ice hockey have broadened their reach far beyond their regions of origin since 1975.

Sports know no boundaries in improving. Governments, health care systems, and school systems are highly localized and isolated. Some innovation occurs because small units of government experiment, but our governments, health care systems, and educational establishments are often untouched by global marketplaces and competitive standards. We do not know enough to demand that our schools be as good as those in Singapore, or that health and life expectancy should be comparable to Norway's, or that governments should complete big projects as efficiently as China does.

I long for the time when we demand as much of service sectors that matter deeply for global competitiveness as we do of our athletes and sports franchises.