What businesses can learn from the NFL

ROGER MARTIN is an unlikely revolutionary: he is the dean of the University of Toronto’s business school, sits on blue-chip corporate boards and has worked as a consultant for big traditional companies like P&G and GM.

All in all very much the CV of a pillar of the corporate establishment.

But this month Martin has published a book whose gentle tone belies its seditious content. What is radical about Fixing the Game: Bubbles, Crashes and What Capitalism Can Learn from the NFL, is that instead of asking how businesses can organise themselves to be more effective and profitable for shareholders, Martin wants to figure out how society should organise business to be more effective for all of us.

The corporate intelligentsia — business school professors, management consultants and many of us scribblers and squawkers of the business press — focuses nearly all of its attention on the first question, a perfectly worthy subject.

That’s why there is such an avid audience for thinking about how to run your business better. This type of work has the further virtue, for both its practitioners and its users, of not really threatening anyone. It is technocratic, not political, and offers the additional feel-good fillip of a practical path toward improvement. It is a universe of engaging stories and uncontentious outcomes.

Even the harder edge of the business commentariat — muckraking journalists, for example — operates largely within this paradigm. The questions we usually ask are about whether laws were broken or investors were deceived.

But the business world presents an entirely different set of issues: how well the existing rules are working for the common good. It is a deeply political question and a central preoccupation of politicians and policy makers.

But inside the business community? Not so much.

That is more than a shame. It is dangerous, because surely the lesson of 2008 is that the American version of capitalism contains some serious systemic flaws.

The power of Martin’s book is that he steps outside our existing paradigm to ask whether the rules of the game are working for the system as a whole. It is a departure for Martin, whose previous writing and consulting work was mostly from the more traditional and safer perspective of how to make your company work better within the existing order.

“This book represents a departure from my previous three books in that they were largely devoid of criticism,” Martin writes. “In this book, I am critical of some institutions (for example, hedge funds). However, I want to be clear that I bear no ill will to the people inside them.”

That final sentence is sure to enrage the guillotine crowd, whose chief complaint about the aftermath of the financial crisis is that not enough of the guilty have been punished. If that is your view, Martin’s discomfort about naming and shaming may seem like a cop-out.

That couldn’t be further from the truth. While Martin’s approach may be less viscerally satisfying, it is actually more radical.

The central insight of his book is that the rules of capitalism aren’t about God-given rights. They are a social construct and it is society’s right and duty to ensure they work for the common good.

Martin’s unifying metaphor ! is a comparison with the NFL. The league’s commissioners, he argues, are constantly tweaking the rules of the game to ensure the right collective outcome. When a coach or player devises a technique to strengthen defence, for instance, the commissioners alter the rules to offset that advantage.

Capitalism’s rule-makers, Martin believes, must be likewise perpetually alert to these sorts of business innovations and change the rules of the game to neutralise their impact.

Martin has stuck to the business book convention in one way — his is ultimately a sunny, can-do tone.

“In doing so, we can restore the core of business and capitalism. We can fix the game — until the next time we need to tweak it!”