The Big Oops with the Barclays Center

Posted on July 6, 2012 | in Baseball, Basketball, Change Management, Defects, Employee Knowledge, Error-Proofing, Lean Wastes, New Ideas, Sponsorships, Sports, Uncategorized | by

Barclays Center Artist Rendering lean Blitz Consulting Sports Operations

You know the phrases “too many chefs in the kitchen” and “too many Chiefs, not enough Indians” or “a camel is a horse designed by a committee?”

Too many people or entities granted some degree of control of a project or process can ruin a good thing. Too many entities providing input means too many ideas and introduces too many variables that can go wrong. Sharing control and soliciting input can provide a lot of benefits – access to additional resources, generation of goodwill, previously-unconsidered ideas – but also introduces risks.

Take stadium naming rights as an example.

The NBA’s New Jersey Nets are moving to a new arena in Brooklyn and will be known next season as the Brooklyn Nets (actually, I kinda hope they change the nicknameĀ from the Nets to something else, but maybe that’s just me).

The team sold the arena naming rights to Barclays and the arena will be called the Barclays Center, in exchange for $20 million annually for 20 years (as first reported, but true figures could be off).

Relinquishing control of the stadium name to a big company, to the tune of $20 million per year. Sounds like a steal! What could possibly go wrong?

Well…this. Which could lead to a little of this.

Amid a scandal at Barclays, a large European bank, relating to fixing and manipulating interest rates, the company’s chief executive Robert Diamond Jr. resigned. Less than three months before the Barclays Center is set to open, a significant amount of embarrassment and potentially a forfeiture of the naming rights deal is on the horizon.

A major sports stadium operates just like a business entity – it serves the public in exchange for financial support, it features a variety of business functions like operations and accounting, it operates using processes and systems, it depends on the public and private sectors – and probably would be fine without selling the facility naming rights.

However, selling those naming rights means that the team and stadium ownership is relinquishing some of those rights and privileges to an entirely new entity and depending on them to provide financial support. In exchange, the team and stadium takes a chance that the outside entity won’t do anything to tarnish the image or reputation of the team or stadium. By adding Barclays as a naming rights sponsor, the Nets introduced all of the Barclays branding, reputation, processes, managers, and marketing into their own business functions.

Where have we seen this happen before?

Oh, that’s right! Enron Field in Houston!

When Enron’s major scandal was discovered, the company was destroyed and also brought embarrassment to the Houston Astros baseball franchise because they owned the stadium naming rights. Obviously when the company went belly-up the naming rights changed hands and the Astros sold them to Minute Maid. Now the Astros play in Minute Maid Park.

The Barclays situation might not be as significant as the one at Enron, but the story isn’t over yet and could actually get worse. Whenever I hear “Minute Maid Park” I still think of Enron.

When implementing continuous improvement, don’t expand the sphere of participants too broadly. Process optimization at a front line supervisor level probably doesn’t require input from the CEO. Try to involve only the individuals and entities that are directly or somewhat indirectly affected by process change.

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