They got lucky.
These three simple words have been used since the advent of spoken language to justify why some succeed and others don’t. In both the business world and our everyday lives, there is little question that luck plays a tremendous role in the outcome of any given circumstance. Yet as leaders who are tasked with steering our organizations through a turbulent and unpredictable environment, we often find ourselves asking, “Is true greatness a result of conscious choice and effort, or merely the by-product of luck?”
For organizations like the University of Oregon, the answer is that it is a combination of both.
Over the last decade, Oregon has gone from a minor regional competitor to a nationally recognized institution of higher education with one of the most successful college sports programs in the country. Many believe that Oregon’s rapid climb to the college sports elite is due in large part to the philanthropy of alumnus and Nike, Inc. founder Phil Knight and his wife Penny, who have donated in excess of $300 million to the University and its athletics program over the last twenty years.
Ask just about any one as to why Oregon has been able to turn around its fortunes in such a short period of time and the most likely answer you’ll receive is, “They got lucky.”
In his book Great By Choice, renowned management scholar Jim Collins’ contends that it’s not how lucky you get that counts, but rather what you do with it — your return on luck. In Oregon’s case, while no one will deny that the generosity of the Knights has played a pivotal role in the emergence of their athletic program, to say that the luck of having such a benefactor was the only reason why it happened would be to dismiss the notion that luck in-of-itself is not enough to make any one individual or organization great, but rather that it creates the opportunity for greatness.
“Resources contribute to success, but history has shown time and again that even the best financed can fail without strategic direction,” explains Oregon Athletic Director Rob Mullens. “There’s no question that Phil and Penny have been a huge reason for our success and the generosity along with the creative genius of Nike developed an identity for the [athletics] program that over time allowed us to prosper.”
For the University of Oregon, that identity is based on three distinct pillars: Entrepreneurial Forethought, Pioneering Innovation, and Disciplined Overachievement. These are the principals that allow organizations like the Ducks to capitalize on lucky events through exacting preparation and precise execution.
According to Collins, successful organizations are highly attuned to their position in the marketplace in good times as well as bad. Even when conditions seem clear and calm, they are aware that things can, and almost certainly will, turn against them without warning. This foresight pushes the Ducks to prepare obsessively – ahead of time, all the time – in all aspects of their organization for what may be around the corner.
“Our business office isn’t the only office that worries about fiscal matters, nor is our compliance office the only one that worries about compliance,” Mullens reveals. “The burden isn’t shifted, it’s shared. Everyone understands that in order to keep us pointed in the right direction, even when things might seem perfectly fine, they have to be willing to hold each other equally accountable. We have to stay entrepreneurially oriented, but professionally managed.”
One might think that with benefactors like Knight, balancing the books is far down the list of priorities for the Ducks. In reality, while the university’s $93 million athletics budget ranks amongst the top 25 in Division I, its ability to drive revenue is severely curtailed by the fact that it has one of the smallest football stadium capacities of any major college football program. While peer institutions like Alabama, Texas, and Michigan have on-campus venues that hold over 100,000, Oregon’s Autzen Stadium has a capacity of half that amount. Given that Oregon derives 67% of its total athletics revenue from a sold out football stadium, making up for a difference of what amounts to over 300,000 less tickets sold during the course of a season can be an incredible challenge.
This means that with such significant constraints on their ability to generate revenue, organizations like Oregon must analyze risk constantly, always being cognizant of their financial state and how they will function if struck with a series of bad events. In particular for Oregon, if football takes a downturn that leads to a significant drop in attendance, it could spell drastic operational changes for the entire athletics program.
“Our real hyper-vigilance comes from our zero based budget (payroll is set, but each unit head is asked to build their budgets from zero) in which we look at every single line. We’re not the type of organization that just adds a few percentage points to the budget every year…. we go back and figure out strategic priorities and how we can allocate to align with these priorities. We make every attempt to prepare for long-term success through a variety of market conditions,” expounds Mullens.
While remaining conscious of what may be ahead is of incredible importance, the results of executing in the future are only as good as an organization’s ability to remain disciplined in the actions of the present. That means consistency of action – consistency of performance standards, values and method. In organizations where change occurs constantly, like a college athletics program, lack of a singular message throughout its culture can eat away at the organization like a disease.
“Continuity to Culture is hugely important. People are so resistant to change, but as a culture, we embrace it. We have a resolute commitment to high performance regardless of the circumstances. At Oregon, we lead by inspired standards, not inspired personalities,” opines Mullens.
There is no better example of consistency for the Ducks than when it comes to the hiring of coaches. The last three head coaches of the university’s lauded football and track programs have all come from within the existing staff, a streak that is unmatched in college athletics. Even more impressive, a number of the current assistant football coaches have been on staff for all three of those head coaching regimes. In fact, under former head football coach Chip Kelly, the football coaching staff had absolutely no turn over for four straight years! Such continuity is simply unheard of in the turbulent profession of coaching, much less for any organization operating on a budget in excess of $21 million.
Although consistency in action allows an organization to practice self-control on a daily basis, this by itself is not enough. Companies must simultaneously learn to balance the inherent conflicts between their various operating interests, each vying against one another to draw attention (and funding) from management. Oregon is not immune from having to balance the numerous competing internal interests of its departments and teams. Without a disciplined approach to managing such interests, an organization can undermine itself well before adverse circumstances arise.
“One of the reasons that we’ve been able to elevate the overall success of our program is because we’ve hired elite coaches and staff,” explains Mullens. “That being said, we have 19 different sports, and in a way they’re 19 separate franchises. All of our successful coaches can get tunnel vision and focus on only on their program’s needs. You can’t simply show up and tell someone they’re less important and that you can’t afford to give them the resources they feel are required. The only way to manage the situation is by matching resources to expectations.”
Most importantly, the discipline required to manage expectations and maintain consistency not only allows an organization to best position itself to cope with both the lucky and unlucky events, but also provides a foundation on which an innovative culture can be grown and scaled. An organization that is keenly aware of its own circumstances and understanding of what it needs to achieve to make up for its shortfalls has a distinct advantage over its competitors. It is in this stable environment that creativity flourishes.
Jim Collins refers to the innovative processes undertaken by organizations who have built such environments as empirical creativity. Taking a low-cost, low-distraction approach to risk by experimenting with a concept in order to empirically validate whether or not it will work. Then, and only then, does the organization commit significant resources towards moving its findings forward. This approach is precisely the one that Oregon uses to drive its own pioneering culture. Thanks to their relationship with Nike, the Ducks have been able to become a trendsetter not only in college athletics, but the entire sports industry. From the eclectic designs of their uniforms, to their one of a kind chrome helmets and the revolutionary design of their basketball court, Nike and the Ducks have time and again set the standard for innovation among modern organizations.
“We are fortunate to having an industry leading partner in Nike with a lot of great ideas, but we’re also not afraid to be first. When you factor in every aspect of a decision, you’re always optimizing uncertainty. The biggest risk to us is the danger of becoming mediocre.”
The incredible success that the Oregon Ducks achieved over the last decade leaves us with a valuable lesson – that in the business world it doesn’t matter whether you’re lucky or unlucky, but rather what your organization does to prepare itself to respond to any given circumstance. Oregon’s ascension to college sports elite is due to a number of factors including among them Phil and Penny Knight and Nike. However, it is the collective result of hundreds of individuals working to diligently insure that their organization has the highest return on luck possible. Whatever the future might hold, the Oregon Ducks are well prepared to capitalize on every opportunity and weather every storm that comes their way, and that is what makes all the difference.