The Patriots AGAIN? How the “Pats” business, people and rewards strategies drive their success
Originally posted February 2017.
In a story starting to seem as old as time, again the Patriots won the Super Bowl, this time against the Atlanta Falcons. Since the arrival of Head Coach Bill Belichick, the franchise has been on that grand stage seven times, with five wins. (There were two appearances at the Super Bowl prior to Belichick; both were losses for the Patriots.) The Patriots have more Super Bowl appearances than any other team. Although in deference to Pittsburgh fans, the Steelers have more wins with 6 in total.
There are lots of reasons to either like or dislike the Patriots, depending on which “camp” you align yourself with; and one of these reasons apply to both camps. That one reason is that the Patriots win A LOT.
This is the reason their fans are so frenzied with joy, and also the reason their detractors are so frustrated. In the “Pro-Patriots” camp, fans love to see their team win in regular season, payoffs, and now numerous Super Bowl games. For the “Con-Patriots” camp, it is just boring. Patriots’ fans love that they win so much and Patriots’ detractors hate that about the team.
There is also one major issue that these camps absolutely do NOT agree on. Detractors point to continued sense that they Patriots have gotten where they are unfairly. Whether it’s viewed as “outright” cheating, think Spy-gate (2007) and Deflate-gate (2014), or simple “seen as bending the rules,” this issue certainly separates the camps. The Pro-Patriot camp says that it is purely skill and leadership that have gotten the Patriots their many wins.
But aside from the specter of dishonesty, what is it that makes the Patriots a winning team time and time again? It might just be their Business, People, and Rewards Strategies! The Patriots might have the most surgical people and reward strategies of any NFL team.
Perhaps it’s time to evaluate the parallels with business organizations and assess if the Patriots might just be the best football franchise when evaluated in the demanding framework of a business enterprise.
First in terms of people strategies the Patriots employ at least three: “come, contribute and leave”, “churn and burn”, and “promote from within”. Let’s take a deeper dive on these three strategies.
The strategy of “come, contribute, and leave” is kind of a temporary hired gun approach. This strategy is entrenched in many industries. For example, in high tech, when an organization matures past its start-up phase, it often looks to seasoned executives to help, temporarily, develop the organization into a more mature company. We see this in not-for-profits and or government agencies as well. These organizations are experts in recruiting experienced executives and specialists that have had full and successful careers in other organizations and who wish to “give back” or even “throttle back”. An example of a Patriot’s player in this category could be defensive end Chris Long.
The strategy of “churn and burn” is practiced by organizations that recognize that the longevity of an individual is curtailed due to the pressure and stress of the working environment. An organization that provides life and death services (air traffic controllers, emergency medical workers, and first responders) may deem it appropriate to use a churn and burn people strategy. And, quite frankly it is likely the most utilized people strategy of professional football teams. Former Patriot’s players in this category might include Corey Dillon or Randy Moss.
The strategy of “promote from within” harkens back to the days when individuals joined an organization and stayed for life (assuming they were effective). This strategy offers the right people security and stability. For the organization and the individual alike it engenders mutual trust and commitment. This is the strategy used with the Patriots’ “core team”. The most obvious example on the roster is Tom Brady who joined the team in 2000, but also might include Rob Gronkowski and Julian Edelman, for example.
The Patriot’s business strategy is driven by the salary cap system introduced in 1993. At that time the team was purchased by the Kraft family. The Kraft family recognized, and with Belichick’s hard line approach, has capitalized on inefficiencies in the marketplace. Essentially, the Patriots have a policy of not paying top dollar. They refuse to pay a higher price to acquire a marginally better player. Tom Brady is the shining example of this approach. According to NFL.com Brady “…became the NFL’s all-time leader for wins by a quarterback (including playoffs), surpassing Peyton Manning…” . He now holds five Super Bowl rings, more than any other quarterback. BUT, according to Forbes, “…some could make the argument that Brady is underpaid. His annual average of $20.5 million makes him the 12th highest-paid quarterback in the NFL.”
But don’t worry about Tom. He isn’t hurting for cash. He and his agent wring every last dollar out of his endorsements and yet another Super Bowl win provides more leverage there. He is smart, and he isn’t greedy. He embraces and embodies the “Patriot Way” which teamwork, accountability and winning (some would say at any cost).
And more importantly don’t worry about Tom or any member of the Patriot’s team because the Kraft family and Coach Belichick have created the most ideal “value exchange” any organization could ask for: highly talented individuals would eagerly accept a job at “below market rates”.
Let’s step back and talk value exchange for moment. First let me share our definition of value exchange. Simply put, value exchange is having the right person positioned to contribute at the right manner and compensated in a way that is meaningful to him or her (in the case of football players it’s just “him”).
As Belichick is known to say to agents, “It’s simple; does your guy want to win a Super Bowl or not?” And those guys do want to win a Super bowl and with the Patriots record they can demand and get what some might argue are “below market rates” for highly effective individuals.
But we believe calling these pay levels “below market” is misleading because it fails to include the entire value exchange which must also reflect the ability for the franchise to win and players want to be on a winning team, and especially a team where a Super Bowl appearance is thought likely.
Belichick and the Kraft family are essentially operating on a higher level (chess rather than checkers) of business, people, and rewards strategies than many of the other coaches and owners. The Patriots organization is utilizing a total value exchange (annual pay, a share of success, and a good chance of acquiring a Super Bowl ring). The rest of the coaches and owners are utilizing the first level of player contract exchange, what we call “working for pay.”
So how do the Patriots measure up as far as organizational effectiveness? Pretty darn good, regardless of which camp you are in.
In summary they have effective:
Business Strategies = exploit inefficiencies due to disruption in market,
People Strategies = surgically at least 3 different people strategies based on competitive advantage,
Reward Strategies = paying below market pay due to the overall value exchange.
So what can we learn from a sport that so obviously decides “winners and losers” on a weekly basis for 20 weeks a year?
Well first of all from our proprietary research we know that in business 25% of the companies don’t feel they have effective business strategies for the new business environment, and another 40% of the companies say that their people strategies are not linked to their business strategies. A significant portion of the hundreds of organizations in our research don’t believe their reward strategies support their people and business strategies.
We hear a lot about “The Patriots Way” (although Belichick says he has never used the term and doesn’t know what it means). Belichick is famously closed mouth about his techniques and the inner workings of his football team. He is certainly a great coach and Brady is certainly a great player and they both lead by example. The truth of the Patriot’s success possibly lies in a deeper series of connections that business leaders – who are competing on a different stage – could learn from. That series of connections is that business strategies and plans drive the people strategy which drives the reward strategy.