I played hockey as an undergraduate at Miami University in Oxford, Ohio, and this past weekend attended the annual men’s hockey awards banquet there. It was my first Miami hockey banquet since my playing days more than three decades ago. I mention this because I was struck at the dinner by just how different Miami’s hockey program is now compared to the one I was involved in. Back then, we started as a club sport; now, Miami is one of the strongest college hockey programs in the country. Over the intervening years, with tremendous effort from many talented people, Miami hockey developed, from the ground up, a culture of winning at the highest level.
How did they do it? And more important, what lessons might be gleaned from the story of the rise of Miami hockey that can be applied to other types of organizations-namely investment-management firms? I believe there are more than a few such lessons. As I thought about the matter on the plane ride home, I was struck by the similarities between the best athletic programs and the best investment management organizations.
But before I get to those similarities, a little background about the evolution of Miami hockey. When I arrived on campus in 1976, the school had just opened an ice arena and hired a young man named Steve Cady to coach the then-club-level hockey team. At that point, no one except Coach Cady had dreams of hockey grandeur. He had no money to recruit, no scholarships to give out, and was required to coach soccer as well as hockey, and also teach. Nor was he making remotely big bucks. We thought he was crazy when, after he put together a team from the assorted misfits that tried out, he told us that he intended to take Miami from club status to varsity, and then, after that, to build an elite program that would compete for a national championship. He said Miami hockey was the best chance the school had to win a national championship in any sport. Again, we thought he was nuts. It was only years later, after I devoured a bunch of books by management experts and understood their lingo, did I see that Coach was setting out a Big Hairy Audacious Goal. What he didn’t tell us at the time, though, was that the school administration had yet to sign on to this particular BHAG. Nor is southern Ohio, where Miami is located, anyone’s idea of a hockey-recruiting hotbed. Come to think of it, maybe he really was nuts.
But what Steve Cady did after that, with excruciatingly limited resources, ought to be turned into a Hollywood movie. Other people can share big pieces of credit for the rise of Miami hockey, but no one will dispute that, without Steve Cady as the driving force, the program would still be a club sport, not a national powerhouse.
After my sophomore year, Miami hockey did indeed become a varsity sport, but it had far fewer scholarships to award than the schools it would compete against. The first few seasons were tough going and involved a whole lot of effort and some lopsided losses. But we made steady progress. And that progress continued over the years. Here are some highlights.
• In 1992, Miami received its first bid to the national championship tournament.
• In 2006, Miami won its first CCHA regular season championship.
• In 2009, Miami played in its first national championship game. (We lost an overtime heartbreaker that still stings like you wouldn’t believe.)
• Miami has made the national championship tournament for the past six consecutive seasons.
Miami hockey has yet to win a national championship–but it will one day, as long as it continues to nurture the culture of winning it’s developed over the past 30 years.
The Key Elements of the Culture of Winning
So what are the key common elements that make up the culture of winning at elite sports programs and investment firms? I can think of six:
1. Hard work. When you have no special competitive advantages, you have to create one for yourself by putting out a superior effort. This doesn’t necessarily mean practicing longer hours than the other guy, but it does mean putting in the most productive effort you can. In sports, this often means intense physical training, while in the investment business it can mean more efficient or innovative approaches to research.
2. Process. The most effective sports organizations and investment firms I’ve seen have built a successful, productive process that everyone believes in and that has become nearly second-nature. For instance, the best investment organizations use consistent approaches to company valuation and the appraisal of risk and reward. In sports, the best organizations are the ones that have built a process for everything from recruiting, to mentoring, to players’ movements on the ice.
3. Personal accountability. The best organizations have built cultures in which individuals do their own job, as defined by the system under which they operate, and accept personal responsibility if they fail. This means not trying to do someone’s job, since that would boost the odds of you failing at yours (in turn raising the temptation to offload the blame when that happens). In finance, a fundamental sector analyst shouldn’t try to also play closet technician. In hockey, it usually means staying with your man regardless of what else is happening on the ice. Success in being truly accountable requires great discipline. As Vince Lombardi once said, “Individual commitment to a team effort-that is what makes a team work, a company work, a society work, a civilization work.”
4. Integrity. Nothing can blow up an organization, elite or non-elite, in any field, faster than a disintegration of integrity, even of a single individual. The organization might plod along for awhile, but once the rot is exposed, the enterprise will be destroyed or severely damaged.
5. Compatible talent. I put this near the end of my list because I believe if you do the other things–work hard, develop a process, accept personal responsibility, and act with integrity–you can build a successful organization. But if you can’t attract superior talent, you won’t be an elite organization. Great talent likes to be surrounded by other great talent.
6. Reinforcing culture. Vince Lombardi once said, “Winning is not a sometime thing. It’s an all time thing. You don’t win once in awhile, you don’t do things right once in awhile, you do them right all the time. Winning is a habit. Unfortunately so is losing.” Lombardi also said, “Winning is difficult, repeating is harder.” Many companies and athletic programs have succeeded in building cultures of winning, but then failed to sustain them. One way a culture can be sustained is through various exercises that remind the current players (and employees) of the past and the bedrock foundation of the organization.
I see similar elements between elite investment organizations and sports programs. I spent two years at Tiger Management, run by legendary Julian Robertson. It had all the elements of an elite organization that I described. Most notable was Julian’s ability to attract talent, and the highly ethical way in which he conducted business. I like to think my current firm, Second Curve Capital, has some of these elements, as well, although our small size puts us in Division II.
After 32 years of the incredible efforts of individuals like Steve Cady, Miami’s hockey program has developed a culture of winning. I was just a bit player in the early part of this incredible journey, but I couldn’t be more proud of where the program is today. It’s up to Coach Rico Blasi to keep preaching about the importance of the elements of this winning culture, to keep it all going. Miami will win a national hockey championship soon, and I guarantee I’ll be there to celebrate the huge accomplishment of building an elite national program from nothing. If you’re watching on television that night and wonder who that first guy is to throw his arms around Steve Cady after the final horn goes off, well, that guy will be me.
What do you think? Let me know!