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When I heard Wade Phillips was fired from the Dallas Cowboys, I did what all sports fans do – run to business appraisal principles to explain what just happened. Two terms jumped immediately to mind. If both terms were part of the pre-season predictions the so-called experts would have tempered their high expectations that the Cowboys were likely to go deep in the playoffs and perhaps be the first team to play the Super Bowl in their home stadium. ?Both business valuation terms, if included in their analysis would have lowered expectations. That is important because I have lived long enough to disappoint often, and can testify that disappointment is often a function of unrealistic expectations. With lower expectations, the bubble would not have been so large, and the burst would not have drowned the players and fans so irrepressibly and fatally. And perhaps the weight of those lofty expectations may not have crushed the Wade Phillips career so abruptly.
Term one: Entity Synergy. It has been defined by businessdictionary.com as when two or more entities work in concert “in a particularly fruitful way” that produces an effect greater the sum of their individual effects, i.e. “the whole is greater than the sum of its parts.” The example provided is when two or more employees excel when working together but who, when working alone are ordinary.
The Cowboys have great talent at many positions. So much so, the experts said, “End of story, talent wins out – see you in the Super Bowl.” ?They have not one but two All-Pro cornerbacks from last year, Mike Jenkins and Terence Newman. They have not one, but two All-Pro receivers in Miles Austin and Roy Williams, not to mention the super-talented Dez Bryant waiting on deck. Then there is Marion Barber to run the little pigskin, and All-Pro Leonard David to open holes for him to run through with the little piggy. And to keep the opposition from scoring there is linebacker DeMarcus Ware. But he may not have to tackle anybody because All-Pro Jay Ratliff is on the defensive line.
But if something was amiss amongst the players as a whole, or between the players and the coaching staff, or with ownership, they may well get it backwards. Instead of ordinary players becoming excellent through synergistic magic, they were excellent individuals that became ordinary. Based on their current 1-7 record, they are less than ordinary. The ability to “work in concert” for qualitative business synergy is the same harmony needed for a successful football team. The good quarterback can be ordinary without an effective offensive line. Without holes to run through, the running back becomes the run-down back, and the receiver gets no passes if the QB is sacked. They need that well-oiled oneness and hugability that does not come from just an assemblage of plant and equipment – or in this case individual player assets. ?The great predictions of the excellent Dallas defense failed to incorporate whatever lost faith that caused the implosion over the most recent games where they gave up over 30 points a game. Perhaps at some level they gave up before the points were actually scored.
The other business valuation term is “going concern value”. It refers to a type of value – the operational value of the entire enterprise. This incorporates the tangible assets (e.g. land, improvements, and fixtures) and intangible assets. In both cases what really makes the entity valuable and successful is the very special way the intangibles and tangible assets come together to generate a present value of future net income.
Simply put, the Cowboys did not have those intangibles coming into the season, and appear to have less of them now. The experts would have been wise not to myopically look at whether the “assets” are individually impressive. Yes, the aforementioned list of 2010 All Pros arguably presents more individually valuable assets than any other team in the NFL. But as corny as it sounds, the team is not as successful if the intangibles are not there. This may be the biggest unrecorded asset collapse since the Wall Street mortgage crisis. The lesson I hope to remember in making sense of this is that the way the players, coaches, and owners come together still has to be “special”.
We hear players from great teams say all the time, “we believe in each other”, “we’ve got each other’s back”, “if he needs to go the bathroom, I’ll hold his… locker open.” And because the experts have heard it before they discount it. Perhaps that is because they either never played at that level or never felt the power of that synergy and operation as a going concern. But most truth has simplicity and longevity. The axiom that the whole is greater than the sum of the parts is exactly what the Cowboys needed to succeed, no matter how many All-Pro caliber individual players are in the locker room. They need to hold it open for each other on and off the field to have a going concern value that generates future wins.
It is not the same as just adding up all the telephones, plant and equipment. It is not just lining up All-pro talent. This is not fantasy football. Until we see that beyond talent, there is synergy, we should be careful about glorious predictions. Before this past Sunday’s Farbonoics, the Vikings were a Super Bowl prediction that was also about to be buried in embarrassment for much the same lack of those fruitful intangible attributes.
But Wade still had to go, don’t you think? Some of us will blame the players, or the owner. But Wade had the ultimate responsibility to generate wins. And for an owner to remain confident there are wins in the future, you don’t want to see the inability to even compete with a team of substantially similar talent in Green Bay. No confidence oozes from a 45-7 loss, coming on the heels of a 35-17 lose to a team, Jacksonville, which is struggling to stay 500. Traditional wisdom is you don’t make a mid-season head coaching change unless things are really, really, bad, as in “can’t get much worse” bad. That would seem to be the case. But before the experts claim next season’s Super Bowl contestants before the season starts, I hope they remember to value the synergy and going concern value of the enterprise.
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