McCormack Executive in Residence Shares Insights on Marketing and Innovation

Can this marketing miracle worker really get Inuits (a.k.a. Eskimo) to swap their hard-earned pelts for ice? You be the judge.  For sports marketing legend Jon Spoelstra, “borderline outrageous” and nonstop innovation are road-tested enablers of business success.   On October 23 and 24, Spoelstra, this fall’s Mark H. McCormack Executive in Residence, shared insights in classes, met one-on-one with students and faculty, and lectured to a packed auditorium of mostly sport management faculty and students.

Jon is cofounder of the consulting firm SRO Partners, which helps NBA, NHL, MLB, and minor league teams to ace marketing challenges.  The author of influential books on marketing, including Marketing Outrageously and Ice to the Eskimos: How to Market a Product Nobody Wants, he was president and managing director of Mandalay Baseball Properties, an exceptionally profitable owner and operator of seven minor league teams. Before that, he brought his innovative brand of leadership to the former New Jersey Nets as its president and COO (three years) and to the Portland Trail Blazers as its senior vice president and general manager (11 years).

“I always went to the job that offered the greatest opportunity,” Spoelstra emphasized in his keynote lecture. “I moved to Buffalo, New Jersey, and Portland [exceedingly rainy] on purpose. I also asked myself each day—What did I do today to make money for my company?” To that end, his companies prospered, he said, during the best of economic times, when “everybody does well.” “But our greatest successes came during recessionary years [when most teams suffer].”

New as a Way of Life. For inspiration, Spoelstra outlined three defining ingredients for success. First, he urged the gathering to embrace “New as a way of life.” Taking a lead decades ago from innovative Japanese firms, he attributed mantra-like status to personal advice from a former Sony CEO, who had insisted, “If we don’t innovate now, we perish in the marketplace.” (Sony itself, he noted, paid the price of obsolescence when its Walkman and Discman later succumbed to Apple’s iPod.)

 “"I’ve always been blessed with intense curiosity."I’ve always been blessed with intense curiosity,” Spoelstra confessed in an interview the next day. That, he explained, entails a regimen of reading, writing, idea sharing, and, above all, proactive, constant observation. Throughout his career, that “curiosity DNA” has generated one profitable, out-of-the-box insight after another. Two decades ago at the theatre, while glancing at a PlayBill magazine, Spoelstra asked, “Why don’t sports teams do that?” The upshot was the Nets’ PlayBall magazine, a freebie for the fans that offered in-depth information about the team and gave the Nets a heady advertising revenue stream ($700K in the first year). That was a marked improvement from its $70k take from Hoop magazine ($4 a copy), the magazine of record at every NBA venue.

Throughout his career, Spoelstra championed innovative, frequently oddball direct response newspaper ads. But there was always method in his innovativeness: “We measured everything, including sales over the next 48 hours,” he told his keynote audience. And at Mandalay, he replaced the Dayton Dragons’ cluttered outfield wall ads with the widest LED TV screen in the world (280’ and 7’ high).  The screen, which revolutionized in-stadium advertising, featured eight advertisers per game, yielding first-year revenues of $2.4 million.

Emphasis on Due Diligence. Throughout his career, Spoelstra tempered his passion for innovation with a critical eye. To gain approval from team owners, he rehearsed airtight, data-driven arguments clarifying his proposal’s concept, rationale, timeline, and responses to potential objections. “I treated [my employers] like the Supreme Court,” he insisted, advising his audience to avoid casual presentation of “bright” ideas to one’s boss.

Bragging Points. So what did Spoelstra’s employers gain from his marriage of extreme creativity and critical preparation?  His bio notes that one of his Mandalay teams, the Dayton Dragons, has sold every ticket to every game in 16 successive seasons. It also reveals that during his three years with the Nets’, the team’s sellouts mushroomed from zero to 29 and its local sponsorship sales swelled from $400K to $7M. And during his 11 years with the Trail Blazers, the team sold out every home game.

The Best Laid Plans. Be prepared, however, for permanent reversals when “pushing the outrageous envelope,” he advised. After working overtime to successfully persuade the seven New Jersey Nets owners to approve the team’s name change to the evocative New Jersey Swamp Devils,  Spoelstra moved on to dispel resistance from NBA commissioner David Stern. Stern’s response: Secure the affirmative vote of all 27 NBA teams in executive committee.

Spoelstra thought that the outcome was a slam-dunk, but was mistaken: The vote was 26 to 1 in the Swamp Devil’s favor, with the lone dissenter the Net owner who had represented the team at the executive meeting. Much better, Spoelstra discovered, to be the co-owner of one’s own team. Witness the express christening earlier this year of his Georgia-based minor league baseball team, the Macon Bacon. The wide-eyed baconian team symbol may be no-necked, but he wields a mighty bat.

Two Cheers for Innovation and the Human Element

How do you create a culture of innovation in an organization? “Every organization has a culture,” Spoelstra insisted in the interview. “That culture,” he explained, “starts at the top. It is never dictated by the janitor. Even in the most innovative environments, though, there’s plenty of room for folks who excel in essential skills. They need to feel part of the team too.”

While Spoelstra has embraced Facebook and other social media tools, he is wary when iPhones and the cloud eclipse human beings. “The [IT technologies] are excellent information devices, but humans are most important,” he remarked. “I could have skyped in my executive in residence visit, but would that have been as effective?” he asked. “I’m not a big fan of emails in problem solving,” he continued. “To find a solution to a problem, find the people who are interested in solving it. That is the key!”