Take What’s Yours: What Baseball Teaches Us About Entering Adjacent Markets
Over the past few years, I have been seeing up close the intersection of athletics and business in my role as the CMO of LEARFIELD. I believe sports have many lessons to teach us about decision making that can be applied beyond the field of play. This blog series compares game day decisions and those faced by business leaders providing some insights from the greatest minds in sports that can improve your business.
Baseball is a game that is highly instrumented. Everything is measured and tracked. This makes it a great source for data-driven leadership lessons. The game also has a rich tradition and lots of rules that change every season. In September, the MLB has changed the size of official bases which some speculate will make it easier for runners to steal bases. You can see the comparison of the old and new bases in the background of the graphic above.
A base is “stolen” when a runner advances to a base to which “they are not entitled” (seems a little judgy, Wikipedia) and they are deemed safe at the next base. It apparently first happened in either 1863 or 1865 with Ned Cuthbert playing for the Philadelphia Keystones.
Even if that is true, they will have some big records to beat! There is a now-retired MLB player, Rickey Henderson, who racked up an incredible 1,406 stolen bases in his career. In the 1887 season, Hugh Nicol racked up 138 stolen bases in a single season for the Cincinnati Red Stockings (AA), although it is speculated that not all of Hugh’s would meet the “modern” rules. Modern rules established (gulp!) in 1898.
Stealing bases holds some interesting lessons for business leaders interested in entering adjacent markets. If a business is well-established in a category or with a particular customer set, what can that company do to take its current product to new markets or to serve their current customers in new ways?
Know the Score: It is critical that players on the field know score, the inning, the out count, and the position of all the players on base and those on the hitting roster. Otherwise, they will not do the right thing. The same is true in business. Before considering any impactful decision, one must understand the current situation clearly, including the businesses' ability and appetite to invest.
Managing Risk-Reward: Not all stolen bases attempted are successful. There is certainly risk associated with business expansion which should be explored. In my book, Well Made Decisions, I write about the importance of customer obsession and the practice of writing out strategy to mitigate risk. One useful practice is to do a pre-mortem to identify the potential derailers to your plan, before you implement. This is what baseball coaches and players do when they are making real-time decisions on the field. Before they take their foot off the base, they are calculating probabilities. Analysis of adjacent markets often use the 2x2 matrix I illustrated with bases above. You can choose to take existing products to new customers. Or you can choose to bring new offerings to your existing markets. The further away you get from your current customers or markets or your current products or technologies, the more risk. Talking candidly about those risks and mitigating them can be the key to getting the buy-in and cooperation the business will need.