Strategy STRATEGIC TRANSFORMATION AT TENNIS CANADA BY ROGER MARTIN Montreal, Canada. August 7, 2011 Uniprix Stadium. Main tennis court at the Canada Masters tournament 44 The European Business Review January - February 2015 www.europeanbusinessreview.com 45 Strategy Aside from the small percentage of hugely successful the modest revenue sources at Tennis Canada’s disposal meant game-changing start-ups like Apple, Microsoft and Google it that it had only $3 million/year to spend on high performance can be hard for a small organisation to compete with giants tennis development. In stark contrast, the national tennis feder- in a competitive market. Below Roger Martin uses his game- ations of the Grand Slam countries (France, the United States, plan for achieving growth for Tennis Canada (the governing Australia, and England) routinely garnered in excess of $100 body of tennis for Canada) to demonstrate just how a small million in funding for their high performance tennis from those organisation can start playing to win. single events. ize is luxury. Achieving a critical mass is perhaps the A New Strategy most important variable in continued market dominance. In the face of this mediocrity and the threat of being banished SCompanies like General Electric, Procter and Gamble, into further irrelevancy from the world tour, new Chairman Jack IBM, and Coca-Cola have remained among the 20 largest mar- Graham, new CEO Michael Downey, director and future Chair- ket capitalisation companies on the Standard & Poor’s list for man Tony Eames, and I (a new director and also future Chair- the last half-century. Internationally, companies like Samsung man) decided the only productive way forward was a complete provide a similar example, using its heft to enter new markets, overhaul of our strategy. learn them and then dominate them. The continued success of The traditional business strategy employed by Tennis Cana- these companies is unsurprising; we would be much more sur- da was one more typical of the Canadian way of life - based on prised if they failed. fairness and complacency – than what was required to win in an Of course, game changing start-ups like Apple, Microsoft ultra-competitive global arena. In short, Tennis Canada played and Google frequently unseat leaders. But perhaps the most to play, not to win. Any player in Canada with decent promise vexing and challenging question is how can an established received funds from Tennis Canada for development, so that its competitor with a tiny fraction of the resources of the domi- scant resources were spread across a broad population, without nant players successfully compete from such a disadvantage? A goals or focus. The new team organised itself around a single – great strategy can be the ultimate equaliser. and then revolutionary – principle: play to win. The leadership group set out ambitious new goals centred on The Challenge for Tennis Canada how Tennis Canada, a poorly funded enterprise, could produce Consider the world of competitive tennis federations. The epit- talent to compete against the giants in the game. Canada would ome of a small organisation trying to succeed against giants in become a leading tennis nation that would never be without a competitive market, Tennis Canada had never achieved rele- both men’s and women’s players within the top 50 world rank- vance in the sport. As of 2005, in men’s singles Tennis Canada’s ings. It would always be part of the world group in the Davis most recent player to rank in the top 50 achieved that ranking and Fed Cup tournaments and it would produce a Grand Slam 21 years earlier and Canada had never had a top 25 player. The singles winner. A tennis federation with heretofore-anonymous women’s side was a bit better, with a 48th ranked player five players and immaterial resources intended to be in the interna- years earlier and two top 25 players in history (#8 in 1985 tional conversation of leading tennis nations. and #13 in 1989), but still distinctly lagging. In team play, the Nine years later, however, those goals, which appeared al- top 16 countries in the world qualify for the Davis Cup World most preposterous at the time, seem like they don’t stretch far Group for men and 8 countries for the Fed Cup World Group I enough. Canada now boasts not one player of both sexes in the for women. Canada had only qualified for the former three times Top 50 but rather one each in the Top 10. Milos Raonic reached in history and the last time it qualified for the latter was 17 years a high of 6th and Eugenie Bouchard 5th, and both ended 2014 earlier in 1988. In the four premium Grand Slam tournaments as the youngest player in the Top 10. Starting in 2012, Canada that define tennis greatness, Canada had only one player get as has consistently qualified for the Davis Cup World Group, and far as the semi-finals in history – 21 years earlier in 1984. The business side of the organisation was in a similar state of despair. The Association of Tennis Professionals (ATP), To win as a small player, Tennis Canada the governing body of men’s professional tennis, had recently threatened to strip Tennis Canada of its lucrative Masters level had to tack away from the common tournament (the set of prestigious global tournaments one rung approaches developed by the historical below the Grand Slams) mandate if Tennis Canada did not up- talent leaders like France and the US and grade the facility in Toronto, an upgrade that required taking on $18 million of debt. The crippling debt load combined with build their own model of success. 46 The European Business Review January - February 2015 returned to Fed Cup World Group I in 2014 TENNIS CANADA historically waited for the talented players to for the first time in nearly three decades. In START PLAYING bubble to the top of the junior heap. Once the terms of Grand Slam performance, 2014 was TO WIN best players rise to the top, money, training a breakout year with one finalist appearance and other resources are amply supplied. (Be- and three semi-final appearances between cause of the abject failure of this system in Bouchard and Raonic. In addition, the player 2012 the past decade, the USTA has become more pipeline beyond Raonic and Bouchard is rich interventionist recently.) with new talent. Canada started to Both systems have produced many win- While various small countries out-pro- consistently qualify for ning players - but both require massive re- duced Canada for decades - the likes of Bel- the Davis Cup World sources to do so. France and the United Group gium, Switzerland, Serbia and Chile all devel- States both dwarf Canada in terms of tennis oped championship talent – Tennis Canada participants, favourable weather for training, now punches dramatically above its weight. 2014 and cash flow. If Canada copied either of We are winning, and poised for continued these approaches, it would guarantee failure. success. All of which, of course, begs the Canada returned to Fed From 2005 onward, Tennis Canada fol- question, how did Tennis Canada play to win? Cup World Group I for lowed an explicit path based on unique an- We succeeded because of a unique strat- the first time in nearly swers to the five key questions any organisa- three decades. Milos egy, the approach that small organisations tion must answer to create a winning strategy. Raonic and Eugenie must follow to take on a dominant leader. To Bouchard ended 2014 as The answers to the five winning strategy benchmark and attempt to pursue the same the youngest player in questions work dynamically, with each ob- strategy as a much bigger leader is to guaran- the Top 10 jective informing and reinforcing one anoth- tee failure. Unlike the more powerful nations, er. This set of choices, which I call a strategic Tennis Canada could not rely on bottomless choice cascade, is a powerful framework for resources to cultivate competitive talent. To guiding an organisation toward a winning win as a small country, we had to tack away path – one that provides clarity to all oper- from the common approaches developed by ational decisions the organisation makes on the historical talent leaders like France and a daily basis. the United States and build our own model of success. The Five Key Strategy Questions France, a nation that consistently produces What is your winning aspiration? top-level tennis talent, has a strictly defined Milos Raonic reached a We set out with the goal of becoming a lead- high of 6th in the Top 10 high performance development program. ing tennis nation. For Tennis Canada, that Junior players who demonstrate ability and a meant always having players ranked in the desire to win are funnelled into the system at top 50 men’s and women’s singles world a young age. From that point onward, through rankings, being part of the elite world groups to eventual adult career success, the French in the Davis and Fed Cups, and winning a system controls their tennis lives. The loca- Grand Slam tournament. tion and the nature of training is prescribed It is important for an organisation to be by the French Federation and enacted entire- focused and working towards its aspiration ly within France under French control. at all times. Only with a clear and specific The United States Tennis Association op- Eugenie Bouchard vision will it be able to move towards its goal. reached a high of 5th in erates in a manner that is the polar opposite the Top 10 to the French system.