As well as the Golden State Warriors, other sport businesses are getting what digital means to them:
From Mark Cuban, owner of the NBA’s Dallas Mavericks and one of the hosts of Shark Tank so he knows about technology;
‘What’s really changed is the Mavs have become a technology product, the things that we are doing with the Mavericks will create changes’
He sees the team is now a technology product, it has evolved beyond being a franchise in a national competition; they are now a software organisation.
Taking this further, Real Madrid CEO Jose Angel Sanchez says that;
‘Real Madrid is more like a fan company using software to help bolster its business, technology is the tool to bring these people together and create a relationship between us and them’
His description of Real Madrid as a ‘fan company’ puts a purpose in the organisation that is different from before. Prior to digital, Real Madrid wouldn’t have said that they are a fan company, they would have strategised along traditional team and venue operation lines – putting a team on the park, selling tickets and hosting ‘home’ matches. Now in digital times, with 450 million followers around the world, they are a ‘fan company’
There are other teams that have evolved beyond traditional thinking to digitally re-purpose:
- A.S. Roma in the Italian La League strives to be ‘the most connected team’, which is a statement of intent to inspire and focus their business because the frame of reference would always be ‘how is this going to connect us more deeply to our fans?’
- FANChise is a new concept as the name suggests. They bought an Indoor Football League franchise in the U.S and they are getting their followers via the internet to run it. They defer all decisions to their fan base. First up, this has included deciding on the team location and name – the emotively titled ‘The Screaming Eagles’. Fans have even selected who should be in the cheer leading team, all through internet feedback. As ‘the internet’s team’ their vision directs them to crowdsource all decisions and to support the input from their fans. It’s a brave and interesting digital democracy that is raising the bar on fan engagement.
- Then there is F.C Sounders, a Major League Soccer team in the United States. They stand for ‘democracy in action’ which is, once again, a purpose that enables them to define what they invest in, how they approach their activities and how they engage with their fans. They formalised an Alliance that provides input into team decisions, which includes influencing the decision on recruiting and retaining the General Manager. Now, that’s one way to make sure the organisation keeps fans top-of-mind. They have one of the most loyal and passionate fan bases in the League and they are regularly the most valuable franchise in the MLS
It’s also good to learn from sports apparel and retail giants because of their competitiveness and drive to be at the forefront of innovation. Here are some examples;
- Under Armour, within their vision ‘to empower athletes everywhere’, are investing in technology via sensors and the internet of things to create apparel that is the leader in biometrics because they see that is the best digital version of their vision.
- Nike are an ‘Innovation Company’, they see themselves beyond being an apparel retailer, as an innovation company, this defines how they organise themselves and pursue product development and consumer engagement.
- Gatorade’s vision is ‘fueling athletic performance’ which now extends beyond sport drinks; they have become the athlete’s hydration partner using sensors in a bottle to provide feedback to athletes about their hydration levels. They have envisaged how they can ‘fuel athletic performance’ in the digital world in a way that deepens their relationship with consumers.
- Coca Cola trade in soft drinks (or soda depending on where in the world you live); in any case, what they are selling is happiness. How are they selling it? By using digital and social media to curate outstanding content that elevates their brand so when someone is drinking Coke, they are buying into their happiness-defining experience.
The key takeaway from these examples is that if soda, shoes or shirt retailers can come up with such inspiring visions then the opportunity for sports is much greater since the product is already an exciting experience. The key is defining the overall purpose of the experience and then allowing each fan or participant to tailor their own personal version of that experience.
Defining an empowering and innovative vision is the foundation challenge for all modern sports businesses.
In the technology vendor space – and these companies spend a lot of time interacting with sport rights holders across the globe – we have the following insights;
SAP CEO Bill McDonald for example says:
‘Every sport franchise is now a technology company’
This statement echoes the words of Mark Cuban from earlier. Then there is this from Microsoft, who’s CEO Satya Nadella has stated that;
‘There isn’t another industry that has been so fundamentally transformed with data and digital technology like sports.’
Once again they are underlining the need for sport organisations to see themselves as a digital-age product and be purposeful in how they define this.
Nike Case Study
Nike has a good business case which is worth learning from.
In 2010 they knew that their operations and culture weren’t where they wanted them to be; some digital initiatives were taking place but they were uncoordinated. Marketing was creating content but it wasn’t necessarily connected to production and sales departments.
Nike understood that in the digital age they had to do something big – something transformative. In response, they created the Nike sports division to be the central focus of their digital governance and operations. They placed marketers, designers and engineers together to launch products under the Nike plus banner. In essence, this forced collaboration which is so critical to digital success.
In retail this played out publicly through the emergence of Nike+ brand of sport and fitness technologies with sensors in shoes being an early product offering.
They now have products such as the Fuel Band which allows athletes to track their workouts, share their performance online and even receive advice from digital coaches. In this way, the experience gets extended beyond the purchase and that’s an important criterion as brands move to experience creators.
This approach to digital product development was also geared towards collecting consumer’s data into Nike’s ecosystem so, as well as giving users tools to craft their own experience, the company continued to learn about users and their preferences. They used these new insights to continue refining their products (and experience).
Note: The discovery process is an important ingredient in the digital journey and a strong business case for empowering employees to collaborate and innovate in the process.
In addition to developing products, the new sports division was also charged with providing digital services outside of its own unit to the rest of the organisation. In this way, Nike was creating further efficiencies and improving overall digital capacity whilst bringing scalability to the organisation.
To service other areas, initiatives included an ‘innovation kitchen’ where new designs and techniques could be tested from across the organisation. Additionally, they hosted an accelerator program to broaden their innovation network by taking ideas from outside the company.
They also added a focus on analytics and employed staff to mine the data now coming into the organisation. Whilst customers are producing and sharing data, Nike is gathering this data and turning that into actionable insights for product refinement – and so the innovation cycle continues.
Having a deeper understanding of consumers use of their products, allowed Nike to improve its branding and level of engagement with them. Along the way they gained some interesting insights. For example, they learnt that in winter runners in the U.S would run more often than those in Europe or Africa but for shorter distances and the average duration of a run worldwide is 35 minutes.
Nike are then able to use this information to design their products and experience.
They even know what the most popular pump up song is – which is ‘Pump It’ by the Black Eyed Peas! Once again, such insights can create opportunities such as engaging in a culturally relevant way with their community on social media from having a detailed profile of their interests.
Importantly, Nike didn’t start by strategising on their business model because what they wanted was a transformational effort. Instead, they looked at different ways they could offer more value to their connected customers.
They looked to the future and what their strengths were which included providing innovative products, intensive brand building and efficient operations. They then worked out how to take those strengths and couple them with the digital forces to come up with their new and inspiring digital future. This is now showcased in the Nike+ innovative range of products.
Readings 1 and 2.
Since this case study emerged, Nike has continued on their digital journey. They appointed their first Digital Officer in 2016 to accelerate the digital agenda.