NFL Leadership Crisis: Organizational Change Strategies

Executive Summary and Overview

The National Football League (NFL) is currently the most popular sport with American adults; however, this position is not guaranteed to remain indefinitely. The NFL is plagued by a range of problems spanning player misconduct and serious indiscretions both on and off the field, issues related to injuries, player safety, and brain damage from multiple concussions, conflicts with the players' union and team salary caps, diminishing ticket sales for some teams, a lack of diversity among head coaches, ethics issues in management, and many more. Because of these major problems, many loyal fans are becoming increasingly disenfranchised with the league, and the overall popularity of professional football in the U.S. is slowly declining. In 2011, 36% of Americans surveyed stated that pro-football was their favorite sport; by 2015, that figure had dropped to 32%. Major League Baseball (MLB) has gained significant traction against the NFL in terms of popularity in recent years.

This analysis focuses on leadership — or the lack thereof — in the NFL, from the highest executive levels down to individual players, from a critical perspective. It is argued that an intervention is needed to mitigate the damage the NFL has incurred in recent years, and that this intervention must take the form of an organizational change led by transformational leadership. This report surveys best practices found in the academic literature regarding organizational change and leadership and relates these models to the NFL's current position.

Organizational Background and Problem Statement

The NFL has a rich tradition and heritage as the preeminent sports organization since its inception. The league was organized in the 1920s when ten teams came together under the American Professional Football Association, which later became the National Football League when it established a nationwide presence. Although other football leagues attempted to build a national competition, the NFL was the first to do so successfully. After its founding, the league slowly became more formalized in terms of membership, rules, and a governing body.

The NFL merged with another successful league, the American Football League (AFL), in the 1960s, creating an even larger organization and producing the Super Bowl. At that time, the league settled on thirty-two teams that still represent today's NFL. The Super Bowl has since become the most watched sporting event in the U.S., and the NFL has become the most popular spectator sport according to a variety of polls. The NFL was projected to have total revenue of more than twelve billion dollars in 2015, up over a billion dollars from the previous year (Kaplan, 2015). The NFL remains the top revenue-generating league in U.S. sports; MLB registers about $9 billion annually, the NBA $5 billion, and the NHL $3.6 billion (Kaplan, 2015).

There are several problems the NFL currently faces that are arguably rooted in a lack of leadership. From the bottom up, there are issues with player discipline. At the team level, there are challenges related to head coaching functions. And at the league level, the organization faces several broader structural and cultural problems.

The opportunity within this situation is to implement an organizational change initiative from the top down. Since the problems associated with the NFL are multifaceted and occur across multiple levels, an organizational — or cultural — change is needed. This analysis attempts to identify the change mechanisms that can help the NFL institute such an initiative.

Change Management: Minimizing resistance to organizational change through involvement of key players and stakeholders (Business Dictionary, n.d.).

Corporate Social Responsibility (CSR): Programs that an organization implements to address social or environmental issues either internally or externally.

Organizational Change: A company or organization going through a transformation. Organizational change occurs when business strategies or major sections of an organization are altered; also known as reorganization, restructuring, or turnaround (Business Dictionary, n.d.).

Transformational Leadership: A style of leadership in which the leader identifies the needed change, creates a vision to guide the change through inspiration, and executes the change with the commitment of the group's members (Business Dictionary, n.d.).

Risk Management: The identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. An organization may use risk assumption, risk avoidance, risk retention, risk transfer, or any other strategy (or combination of strategies) in the proper management of future events (Business Dictionary, n.d.).

The processes, systems, and functions of the NFL can be understood on two broad levels. The first and broadest level is the league's executive management team and its administrative professionals. This group sets high-level strategy for the organization and is responsible for the league's overall success. The second level is the team level. Although each team pursues its own self-interest — primarily winning the Super Bowl — there is also an alignment with the league's broader goals. Each team benefits individually when the entire league does better: increased league popularity translates to higher ticket sales, individual revenue streams, viewership, and merchandise sales for every franchise.

The relevant theories applicable to the NFL broadly mirror those found in other types of organizations across industries. Organizations have an executive team responsible for setting strategy, which is then implemented on a tactical level by middle managers and employees. In the NFL, teams implement the strategic objectives set by the league, and although the tactical goals are different (such as winning football games), much of a head coach's job mirrors the responsibilities found in positions such as a regional manager in other industries. Therefore, for the scope of this research project, the literature review focuses on broad-level concepts applicable across different levels of any organization, including the NFL.

Theoretical Framework: Risk Management and Organizational Change

Risk management can serve as the cornerstone of a strategy platform in many organizations. Since the league is currently facing a decrease in popularity relative to other sports and previous years, it is prudent to analyze the risks the league faces and create a plan to mitigate them. Risk management is described as the practice of accounting for the potential risks facing an organization, determining the probability that the organization is exposed to those risks, and deciding how best to mitigate them. Because organizational change deals with unique circumstances by definition, it is inherently plagued by risk (Benta, 2011). In many cases there is no effective way to prevent the occurrence of various risks, and the organization must instead form a contingency plan in response.

Risk identification is shaped by the likelihood that a risk will occur, the probability of its occurrence, and the potential impacts it could create (USBR, n.d.). For example, the likelihood of player misconduct occurring in the future is high given that many players receive large sums of money and some may lack the self-discipline to remain humble and focused. However, risk management allows an organization to actively plan alternative strategies to reduce the likelihood of such occurrences. For example, the league could create a mandatory training program for new players addressing personal challenges they may face, and institute harsher penalties for off-field misconduct.

Risk management also explores ways to reduce an organization's susceptibility to risk. Even so, many risks are difficult to account for or prepare against. Risks are also dynamic and can evolve with changes in the external environment or with internal changes the organization institutes. Because of this dynamic nature, organizations should regularly undertake comprehensive, focused assessments of potential risks, carefully planned and methodically documented so they can be expanded upon in future assessments.

Various strategies can be created to mitigate the potential for risks to damage the organization and its operations. There are four categories of risk objectives: strategic objectives, operational objectives, reporting objectives, and compliance objectives (COSO, 2004). The COSO framework is a risk management model that could be customized to fit the NFL's specific challenges. Importantly, the entire risk management process must be integrated into the organization's culture.

Most organizations designate a steering committee to guide a COSO risk management project. This committee builds an inventory of existing risk management systems and strategies, then guides the COSO implementation. Efforts to minimize organizational liability in a comprehensive manner necessarily encompass all four risk objectives. Thus, the organization must include the opinions of many members to effectively build a risk profile, and also draw on outside sources and expert opinions, so that it can prioritize the most critical factors in a systematic way.

Many external events can influence an organization positively or negatively; the risk management plan focuses on the probabilities that harm could be inflicted by a future event. For example, a scandal involving a head coach could generate significant negative publicity for the league. Player safety and the medical issues surrounding multiple concussions represent another area of ongoing risk. In many cases, the elements of risk associated with indirect implications are difficult, if not impossible, to accurately quantify. However, the NFL could develop a range of policies in response to the latest medical data as part of a comprehensive risk management plan. Components of a risk management plan include (Zita, 2011):

Event: What could happen? Probability: How likely is it to happen? Impact: How bad will it be if it happens? Mitigation: How can you reduce the probability (and by how much)? Contingency: How can you reduce the impact (and by how much)? Reduction = Mitigation × Contingency. Exposure = Risk − Reduction.

Planning for change is one of the most important components in the organizational change process. Proper planning allows organizations to consider their options in the face of change and make more informed decisions. Without a risk management plan, organizations are often in a reactive state and may not have the opportunity to plan strategically for changes. However, a proactive organization can create a strategy to implement desired changes effectively and mitigate the probability of various risks occurring. Several change management models have been developed to guide organizations through this process; the NFL could institute any one of these models, or some combination, to address its challenges.

Lewin's Change Management Model is based on the assumption that most people are resistant to change and would prefer to remain in the existing system. The model recognizes three stages of change (Floyd, 2002). The first stage, Unfreeze, requires the change agent to address resistance and begin building a sense of change in the organization, essentially thawing the existing situation (Green, 2007). The second stage, Transition, is the period in which the actual change in operations occurs; the change agent guides the organization through the change and devotes the necessary resources to it (Floyd, 2002). The third stage, Refreeze, occurs after the change has been instituted: the organization builds new patterns and habits within the new system and stabilizes until the next needed change emerges.

The McKinsey 7-S Model identifies seven factors that work in unison as agents for change: shared values, strategy, structure, systems, style, staff, and skills. Shared values are the combined values that change managers want to enforce; strategy is the coordinated plan for enforcing change; structure refers to the organizational arrangement that implements and sustains the change; systems are the mechanisms used to enforce change; style is the manner in which change is enforced; staff are the people who are the objective of the change; and skills are those that must be acquired to effect the change successfully (Green, 2007). This model is more comprehensive than the Lewin model and combines both emotional and rational components, providing better understanding of an organization and more adequate guidance for change. However, it assumes that all seven factors have equal influence on change, which may not always hold. For example, given that there are thirty-two teams in the league — many with substantially different organizational cultures — creating a unified set of shared values could be particularly difficult.

Kotter's 8 Step Change Model takes the approach that the change process should be thought of as a campaign rather than a business process. Given the independent nature of many organizations found within the NFL, a campaign approach may be best suited to the league's circumstances. Similar to the Lewin model, Kotter's model considers the change process from the perspective of stakeholders and the various activities that can be conducted to prepare them for planned change. Since the stakeholders are ultimately responsible for making the change, making a comprehensive effort to provide them with all the tools, motivation, and support they need to institute the change is sufficient to drive it (Green, 2007).

This model strives to overcome behavioral challenges held by stakeholders and effectively meet the needs of the changing environment. John Kotter and Dan Cohen identify "The Eight Stages of Successful Large Scale Change," in which leadership is a critical success factor (Green, 2007). The NFL's executives would need to set a new strategy for the collective organization and then campaign for the compliance and cooperation of the individual teams on the tactical level. A successful vision can provide a roadmap for the entire league that inspires different stakeholders to overcome personal concerns for the greater good. The eight steps are:

1. Create and increase the urgency for change. 2. Build a team to work on the change campaign. 3. Create the vision for change. 4. Communicate the need for change. 5. Empower staff with the ability to change. 6. Create short-term goals. 7. Stay persistent. 8. Make the change permanent.

Kotter's model differs from the others in a fundamental way: it focuses on preparing employees and stakeholders for change rather than on the mechanics of the actual change itself. The idea is that if stakeholders are comprehensively supported and prepared, the actual implementation of the change essentially takes care of itself, fostering motivation from within the organization. Any one of these models, or some combination, can be used to design a change management plan customized for the NFL's specific circumstances.

Leadership Models and Transformational Leadership

Leadership is one of the most fundamental aspects of running a successful organization and can be considered arguably the single largest critical success factor. Leadership can be broadly defined as a leader's ability to shift a group's behaviors and attitudes toward something more aligned with broader organizational goals. Models developed to explain leadership include trait theory, situational theory, transformational leadership, behavioral theory, competencies theory, network theory of leadership, and many more (Turner & Muller, 2005). One of the primary objectives of a leader in most models is to effectively align individual goals with broader organizational goals. The transformational leadership model stands out for its many unique features and its particular suitability for accounting for the motivational aspects of change.

Transformational leadership has been called one of the most effective among the various theories of leadership (Judge & Bono, 2000). Transformational leaders are able to influence their subordinates to reach their full potential by setting challenging expectations, which in many cases leads employees to achieve higher performance (Bass, 1999). Because transformational leaders perform well in dynamic environments, they are commonly associated with change and change management. Given that change management has also been recommended for the NFL, the transformational leadership model appears to be the best fit for the current scenario.

Transformational leadership as a model was first presented by Burns, who contrasted a transformational leader with a transactional leader — one that is more managerial in nature (Judge & Bono, 2000). It was originally defined as a type of leadership that could relate to the moral values of followers and transform their personal goals into organizational objectives. Employees who are inspired and dedicated to organizational objectives will be more willing to devote their energy and resources to their organizational roles. Bass later defined transformational leadership as simply a leader's ability to push followers beyond their immediate self-interests (Bass, 1985). Bass (1985) also stated that a transformational leader could help an employee develop a higher level of maturity in their ideals and their concern for the achievement, self-actualization, and well-being of others, of organizations, and of society generally. Given that NFL players often serve as role models for many American children, this higher level of maturity and discipline would help the NFL uphold the image that the American public expects of the league.

Bass (1985) suggested that there are four main components of transformational leadership. Idealized influence describes a leader's ability to maintain an idealized perception from employees — an "ideal" image built through a sense of dedication, purpose, and perseverance. Inspirational motivation refers to a leader's ability to create a vision of the organization that displays enthusiasm, optimism, and commitment to goals. Intellectual stimulation refers to how well a leader can appeal to the more rational expectations of employees. Finally, individualized consideration describes how well a leader can give personalized attention to employees and team members. It is also important to note that transformational leadership can, and should, be applied on multiple levels in the NFL — from executive leadership to individual teams and player groups.

The transformational leadership model is widely studied because it can account for the inspirational qualities of leaders and has been shown to correlate with organizational success. Researchers have found that certain personality traits are more helpful in predicting transformational leadership than others (Ross & Offerman, 1997). Furthermore, transformational leadership can help predict individual and organizational outcomes such as leader effectiveness, team performance, subordinate performance, job satisfaction, and organizational commitment (Lim & Ployhart, 2004). Because transformational leaders are able to provide motivation to change or do things differently, they are also commonly associated with organizational change management. The model is concerned with emotions, values, ethics, standards, and long-term goals; it encompasses assessing followers' motives, satisfying their needs, and treating them as full human beings. Transformational leaders are also known to excel in dynamic environments and are able to adapt to complexity in ways that more purely managerial roles cannot.

In regard to leadership within the NFL, it is recommended that transformational leadership be considered as a model in conjunction with the change management plan. A transformational leader can be an effective change agent at many different levels of the league, ranging from executive leadership to players and team leaders.

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