As the summer winds down, we’ve been treated to the usual mix of sun, warm weather and, hopefully for most of us, a week or two of vacation.
We’ve also witnessed a rather unusual event—a competitive Toronto Blue Jays team that, at least according to the current divisional standings, is on pace to make the playoffs. Their chance of reaching the World Series is anyone’s guess.
But one of the most interesting aspects of the Blue Jays’ rise to the top of Major League Baseball is the back story behind their journey to the playoff promised land—one that holds a key lesson for entrepreneurs.
What’s the connection? Well, as you might recall before this season, the team’s owner—Rogers Communications Inc.—took a wait-and-see approach to investing in the team’s development.
The insinuation was that if fans turned out to support the Jays, Rogers would invest to make them a better ball club. This philosophy would be the equivalent of an entrepreneur saying they need to acquire new customers before building the necessary infrastructure to deliver the products or services those clients might buy from their organization.
But momentum shifted for the Blue Jays when Rogers seemed to have a change of heart, opening their vault to finance the acquisition—through the trade or free agent signing—of the likes of ace pitcher David Price, MVP-candidate third baseman Josh Donaldson and perpetual all-star catcher Russell Martin, to name only a few of the biggest changes to the team’s roster before and during the season. Not surprisingly, they soon started to win and the Rogers Centre was sold out for almost every game.
I’ve worked with a lot of businesses of all sizes and across sectors over my nearly 40 years as a chartered accountant and strategic management consultant. With only a few rare exceptions, I’ve almost never seen an organization achieve long-term success by taking a wait-and-see approach to putting key organizational infrastructure—both from a capital investment and talent-acquisition perspective—in place.
Instead, entrepreneurs need to think strategically and analyze their strengths and weaknesses to know where to bolster their team, or put the right tools in place so their best players can win. Much like the Blue Jays—or any successful business, for that matter— that typically means investing in these three key areas to gain market share, compete and grow:
Start with a solid management team—It’s common for entrepreneurs, especially those still in the start-up phase of their businesses, to make the case against hiring a C-suite executive such as a CFO because they’re simply too expensive. “Even if we could afford to hire this person, there wouldn’t be much for him or her to do,” they might argue. This is akin to a sports franchise saying they’d rather hire a rookie coach or general manager—or none at all—in a daft attempt to boost their bottom line. But top-level managers or executives are worth the cost of their often pricey salaries simply because they can help your organization in ways that far exceed any investment in their talents. That could mean identifying operating expenses eligible for cutting, or identifying key new markets for growth, as just two examples. Sometimes the answer is to hire one of these senior executives on a part-time basis, which can also work well. Whatever the case, building a successful business means hiring the right managers to get the job done right.
Build it and they will come—For sports teams, that means constructing flashy new arenas or stadiums. For entrepreneurs, that philosophy could require spending on new facilities or machinery. I sometimes hear manufacturing clients complain that they simply can’t afford to invest in new computer-controlled equipment, for example, even when they know it will boost their productivity and decrease costs. The reason is that many entrepreneurs are averse to the risk associated with financing a facility or equipment expansion when it might take a year or more to purchase and integrate the equipment, then reap the rewards. But without these investments, it’s impossible to serve a growing client base, let alone deliver the goods or services your organization promises. Consider outsourcing some manufacturing needs or even sharing space with a non-competitor to ease the financial burden of such an expansion. But don’t delay. Because when you build it, as the line from the classic baseball movie Field of Dreams goes, they will come.
Field a team of winners— I’ve seen other situations where CEOs express a concern with the weakness of some of their staff, particularly in the sales department. Their (legitimate) worry: potentially wasting thousands of dollars in recruiter fees or time spent searching for candidates they may never be able to find, let alone hire. But as I always ask them: “Will these new salespeople allow you to take major leaps forward, such as broadening a product line or creating a new category of customer? If the answer is yes, then it’s a step that has to be taken.” My advice is to aim high and attempt to acquire top talent that will allow your team to win now. It’s fine to stock the farm system with prospects, but businesses must perform to stay afloat—particularly when it comes to sales. That can also require the willingness to trade or cut a player or two if they’re not meeting expectations. That idea of hiring slow and firing fast is especially important at the executive level, where key strategic decisions can make or break your organization.
So, be prepared to invest now to grow later by signing the very best performers your industry has to offer. It takes more time to build a winner in the business world than in the sporting arena, but experience tells us that the investment will, indeed, pay off.
Marshall Egelnick, Managing Partner