Road Warrior

The NFL Replacement Officials and Business

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I was in Omaha, Neb., when the notorious football game between Green Bay and Seattle boosted television ratings and had Facebook and Twitter going bananas recently. I give my condolences to all the Packers fans who were harmed by the replacement officials’ ruling. A student enrolled in our online ag lending class wanted to know my take on the NFL replacement officials and how this situation relates to business.

My first response is that the National Football League was “penny wise and pound foolish.” A $10 billion operation was holding out over a few million dollars in salary and fringe benefits, which was destroying the brand and potentially placing its product (the players) in danger.

Now, here is the link to business. In graduate school at Cornell University, one of my former management professors indicated that there are three types of business decisions: the $100 decision, the $1,000 decision and the $10,000 decision. Considering inflation, you could probably add a zero to each of these amounts in the 2012 version. He stated that many farm business managers spend more time making the $100 decisions than the larger $1,000 and $10,000 decisions. As businesses become larger and more complex, one must move up the management chain in decision-making. In some circles, this is called prioritized decision-making. My good friend, Danny Klinefelter, often says that successful managers prioritize their priorities in strategic decision-making. Quite obviously, the NFL commissioner missed this business lecture.

The next point is that the frontline people, i.e. the officials, are keys in the smooth function and delivery of the product. These individuals are under constant scrutiny from owners, coaches, players and fans. I think their role is analogous to janitors and sanitation workers. No one notices them until there is a glitch in the system or they are not there. Things can become messy very quickly. The key management message here is to never forget or take for granted the frontline staff because, while it may save you in the short run, it may cost money and your image or reputation in the long run.

 

Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at sullylab@vt.edu.

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Dave Kohl is an ag economist specializing in business management and ag finance. He can be reached at sullylab@vt.edu.

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