Archives for November 2019

At a time when American horse racing is under intense public scrutiny, and the subject of criticism, putting into practice proven principles for doing business would be a major step in the right direction for the industry. Racetracks in particular have a lot of work to do to overcome an image tarnished badly by horse fatalities at high-profile Santa Anita.

Amazon’s 14 “leadership principles” offer such building blocks.

Jeff Bezos founded Amazon in 1994 as an online bookseller.  Today it is an economic juggernaut and has replaced faltering General Electric as the company other firms most go to when looking to hire chief executive officers and other upper-echelon managers.  In fact, in 2019, The Wall Street Journal’s Management Top 250, an annual ranking that uses the maxims of the late management guru Peter Drucker to identify the most effectively managed companies,” has Amazon in first place.

Following are Amazon’s 14 leadership principles.

“Customer Obsession

Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers.

Ownership

Leaders are owners. They think long term and don’t sacrifice long-term value for short-term results. They act on behalf of the entire company, beyond just their own team. They never say ‘that’s not my job.’

Invent and Simplify

Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by ‘not invented here.’ As we do new things, we accept that we may be misunderstood for long periods of time.

Are Right, A Lot

Leaders are right a lot. They have strong judgment and good instincts. They seek diverse perspectives and work to disconfirm their beliefs.

Learn and Be Curious

Leaders are never done learning and always seek to improve themselves. They are curious about new possibilities and act to explore them.

Hire and Develop the Best

Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others.  We work on behalf of our people to invent mechanisms for development like Career Choice.

Insist on the Highest Standards

Leaders have relentlessly high standards–many people may think these standards are unreasonably high.  Leaders are continually raising the bar and drive their teams to deliver high quality products, services, and processes.  Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed.

Think Big

Thinking small is a self-fulfilling prophecy.  Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers.

Bias for Action

Speed matters in business.  Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking. 

Frugality

Accomplish more with less. Constraints breed resourcefulness, self-sufficiency, and invention.  There are no extra points for growing headcount, budget size, or fixed expense.

Earn Trust

Leaders listen attentively, speak candidly, and treat others respectfully. They are vocally self-critical, even when doing so is awkward or embarrassing.  Leaders do not believe their or their team’s body odor smells of perfume. They benchmark themselves and their teams against the best.

Dive Deep

Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdote differ. No task is beneath them.

Have Backbone; Disagree and Commit

Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly.

Deliver Results

Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.”

These principles are straightforward and easy to understand, yet are difficult to implement.  Businesses that are able to do so prosper. 

American racetracks, with some exceptions, generally fall short on many of the principles.

Horse Racing Business 2019

Buyers sometimes pay six-and-seven figure prices for impeccably-bred and well-conformed yearlings and 2-year-olds, only later to find their blueblood charges bested on the racetrack by a horse that sold for five figures or less…or did not elicit any bids at all at auction.  John Henry, Seattle Slew, and Sunday Silence are examples.

The ostensibly most gifted athletes, human and equine, are not necessarily destined for accomplishment because they may lack the fortitude and drive to succeed up to their natural abilities.  A large-scale project at the United States Military Academy demonstrated the power of what the researchers call “grit.”

A University of Pennsylvania psychologist, Angela Duckworth, led a team that over 10 years’ time studied West Point cadets, 11,258 in all, with the objective to determine what is the most important trait for success.  Success was evaluated over a cadet’s four-year experience at the Academy, an experience that commences with a brutal six-week boot camp.

“Grit” was the personal characteristic most correlated to success, which was defined as “passion and perseverance for long-term goals of personal significance.”  (Grit was measured on a 12-point scale.)  Grit trumped cognitive and physical abilities.  While brain power and physical ability were essential to success, grit was more significant.

When a bloodstock agent and his or her clients bid at an auction on unproven racing talent, what they cannot know is whether a prospect has grit, whether he or she will persevere when bumped during a race or when winded and tired in deep stretch.  A sale catalog has no information whatsoever on potential “true grit.”

That’s what makes horse racing so challenging and gives a buyer without the deep pockets of a sheikh or a hedge-fund manager a shot at the big-time.

Copyright © 2019 Horse Racing Business

The Wall Street Journal recently asked six accomplished people to write a short essay on “What Makes You Nostalgic.”  One was Michael Lewis, author of such bestsellers as Moneyball, The Big Short, and The Fifth Risk.  Much of what he said about baseball could very well be said of horse racing:

“There’s money to be made off exploiting other people’s nostalgia. Baseball, unlike other sports, is selling its connection to the past.  I think that’s why baseball is nostalgic.  People naturally associate baseball not just with childhood but with their relationship with their father.  If what you’re selling is continuity and a connection to the childhood experience, then it is scary to make changes.  If you make those changes, you do indeed undermine that feeling of nostalgia.  It’s not irrational for these sorts of institutions to be resistant to change.  The interesting thing is that baseball is so unmodern.  The modern world is all about embracing change and disrupting.  The truth about baseball is if there’s no continuity, it’s kind of boring. It’s slow; it’s not the pace of modern life. Basketball is the pace of modern life.”

Horse racing is slow-moving, if one goes to a racetrack and bets only the live races, as in the days before simulcasting. There are long lapses of time between races, followed at most by a couple of minutes of action.  

Many avid horse racing fans were introduced to the sport when they were way too young to bet, typically by a close relative, and most often by a father.  For them, to use Michael Lewis’ phrase about baseball, racing is “a connection to the childhood experience.” 

Years ago, a beloved father would sometimes take his two teenage boys to Churchill Downs on his half-day off from work. That is how this son, now approaching the final furlongs of life’s run, developed a lasting fascination with an “unmodern” sport. 

Horse racing’s showcase event, the Kentucky Derby, is a throwback to many yesteryear’s ago.  When Churchill Downs hosts “the Run for the Roses,” on the first Saturday every May, as it has been doing since 1875, you can cut the nostalgia with a knife.  Likewise, the annual gathering at Saratoga Race Course in upstate New York has been trading on wistfulness that began with the track’s first meet just weeks after the Battle of Gettysburg in 1863.

Simulcasting has disrupted the business side of racing and rendered it much more convenient and decidely faster paced, but racing aficionados occasionally seek out the traditional ambience–the sights and sounds and smells of the real thing–up close and personal. Just like old times with Dad.

Copyright © 2019 Horse Racing Business