What can sport tell us about business growth?

The dangers of dilution

How big can an enterprise become before it loses its essence? How can it continue to expand without eroding almost every trace of whatever it was that originally made it great? The FIFA World Cup and other so-called “mega-events” provide a salutary lesson in this regard.

The inaugural World Cup, held in Uruguay in 1930, featured 13 teams. Thirteen might seem like a bizarre number now, but from little acorns and all that. Sixteen teams qualified to take part in every tournament between 1934 and 1978. In 1982 the field was increased to 24 teams, and in 1998 it was stretched to 32.

Today, despite fans’ protests that the extravaganza is already too bloated, FIFA is proposing a further swelling of the ranks – this time to 48 teams. This vision could become a reality by the 2020 World Cup in Qatar. It seems the game’s governing body is blissfully unaware of the notion that more can very often be less.

Should they care to investigate the potential consequences of remorseless expansion, football’s powerbrokers could do worse than revisit Euro 2016. There an enlarged format gave fans of “minor” nations something to cheer about but fuelled a grim spectacle, with too many sides content to grind out a draw in the group stage or scrap their way to a penalty shootout in the knockout rounds. Like the Olympics, football’s “mega-events” have become victims of dilution.

Keeping things fresh

This year’s Ryder Cup is in many ways anticipated with much greater fervour. There’s one very simple reason for this: last time out, after a debilitating string of defeats, the US finally managed to win.

Davis Love III, the victorious captain, had presaged the significance of such an outcome even before the first drive was struck. “If we keep losing,” he said, “the American fans are going to say: ‘To heck with that – we’ll go and watch something else.’ You’ll still have your golf fans, but will the Ryder Cup continue to grow like in the last 20 years? No.”

The latter sentiment is especially relevant here. What Love touched on, even if only unwittingly, is that one of the secrets of continued success is alignment: to grow sustainably, to expand without diluting, it’s necessary to satisfy as many interested parties as possible.

FIFA pretends to be doing this when it invites more and more nations to the World Cup, but for every newcomer that revels in the novelty of the experience there are likely to be many longer-term stakeholders that at last decide they have seen enough. Similarly, a relentless run of European triumphs in the Ryder Cup may be huge fun for golf devotees on this side of the Atlantic, but our American cousins could be forgiven for seeking their thrills elsewhere.

Cycle of success

Finance and business journalist Hamish McRae once wrote a fascinating book, What Works, in which he described various enterprises blessed with a seemingly uncanny knack of getting things right. He identified two fundamental factors that unite all such success stories:

• They have a deep-seated sense of mission – the vision, drive and commitment to do
• They’re sensitive to their markets – which is to say they provide what people want.

Now, it could be argued that some of the sporting events touched on earlier tick both of these boxes. After all, the World Cup – to take the most obvious example – is nothing if not ambitious and apparently makes mountains of cash.

But it’s important to remember that markets aren’t necessarily about money: they’re about buy-in. And it’s also important to remember that these “mega-events” cost a fortune to stage, do precious little for the locals and are in hock to powerful sponsors whose influence – not least in terms of the control and presentation of their products – borders on the absurd.

So does any sport, championship or tournament strike the right balance? A comparative newcomer that springs to mind is the Tour de Yorkshire bike race, an event that has taken a proven business model and applied it to a conspicuously receptive market. This year the tour attracted two million spectators and generated an estimated £60 million for the local economy.

The Tour is only a few years old, of course, but so far it hasn’t lost sight of the fact that a major key to business sustainability is to keep bringing value to as many people as you can. That, ultimately, is the trick. There’s nothing wrong with getting bigger, but there’s something undeniably perilous about forgetting what made being small such a joy.

About the author 

Paul Kirkham is a researcher in the field of entrepreneurial creativity with Nottingham University Business School’s Haydn Green Institute for Innovation and Entrepreneurship (HGIIE) and co-author of ‘Building an Entrepreneurial Organisation’.