Almost exactly one year ago, we wrote about the feud between two professional golfing tours, the incumbent PGA Tour of American and the upstart LIV golf tour.  We also did a podcast on the subject, in which we predicted either a PGA “victory” in the feud – or a merger. 

Shockingly, the predicted merger has already happened.  And it provides more interesting lessons for strategists about the nature of competition in the current business environment.

The Speed of This Merger Has Major Implications for Your Planning Horizons

In the history of North American sports, close to 20 challengers to major incumbent sports leagues have either folded or, far less often, merged with the existing league (like LIV and PGA).  In 1966, the American (AFL) and National (NFL) football leagues merged.  The AFL had existed independently for 6 years, and for 4 years it “cooperated” (more on this strategy later) with the NFL before ultimately becoming one.

In 1976, the American (ABA) and National (NBA) basketball leagues joined forces.  The ABA lasted for 9 years on its own prior to the merger.  In 1979, the World Hockey Association (WHA) and National Hockey League (NHL) merged.  The WHA had lasted 7 years on its own prior to its merger.

The difference with the PGA – LIV merger is that it took place less than one year after LIV’s first event was held on June 9, 2022 in the UK.  And while a confluence of factors like ongoing lawsuits, reputational damage and LIV’s lack of a TV contract seemed to spur the union between the two leagues, one thing is certain:  the pace at which marketplace circumstances and product lifecycles play out continues to accelerate.

For more evidence, look at the relatively quick “fall from grace” of companies like Blackberry, Yahoo and even Twitter.  Or compare your own companies list of competitors this year vs. last year and note the number of new entrants. 

What this all means is that the traditional annual planning cycle is now too slow.  A leaner, less comprehensive and more continuous planning process that includes frequent trend-monitoring, ongoing customer needs research and new competitor identification/war-gaming is needed to keep pace. You may even formalize a traditional 6-month planning cycle.

War-Gaming Could Have Led the PGA Tour to An Entirely Different, Stronger Strategy

There’s no doubt that the PGA Tour’s willingness to merge with LIV damaged its relationship with one of its key stakeholders:  the tour’s own players.  Many PGA tour players turned down contracts worth millions from LIV to stand on principle and/or to try and preserve the strength of the PGA tour. 

While the impact of this “labor strife” is not yet fully known, the question must be asked:  did the PGA Tour act strategically in taking such an aggressive stance with LIV?  The PGA Tour banned players that signed with LIV from competing in PGA Tour events, and aggressively painted the huge LIV contracts as “dirty money” due to the league’s backing from the Saudi Arabian government.

Did these strategies and tactics grant legitimacy to an upstart league that wasn’t even able to obtain a television deal?  It seems that one option for the PGA Tour would have been a “live and let live” (pun intended) strategy whereby they allowed players to take the LIV money and still compete on their tour. 

This alternate strategy may have hastened the demise of the LIV tour – especially given its lack of television visibility – and allowed the PGA to avoid the damage it has done with both the players that left for LIV and the ones that stayed. 

And how would the PGA have found this likely-better approach?  By war-gaming it’s alternatives prior to making its strategic moves.  War-gaming is a strategic activity that models approaches prior to them being played out clumsily in the marketplace.  It actively puts a company’s own personnel into the shoes of competitors to think like them and play out alternative scenarios, allowing a company to optimize its own approach.

We call this “making your third move first” and are astonished at how many strategists and product managers choose to forego investing a day or two in this war-gaming activity prior to launching.

Are You Fully Considering the Strategy of Coopetition in Your Planning?

A merger is a recognition by two companies that they are better together.  The downside of mergers is that integration of two companies is complicated.  For this and other reasons, mergers often don’t work and ultimately decrease shareholder value.

More and more, we see companies choosing to cooperate rather than merge.  The upside to this is that cooperating companies can deliver increased value to customers without the “finality” of a merger.  If it doesn’t work, unwinding the cooperative venture is difficult but infinitely easier than reversing a more formal union. 

Companies are often blinded by their own competitiveness.  Assuming you are supposed to vanquish the competition might lead to heavy-handed strategies and tactics, like the PGA Tour employed. 

Remove your blind spots in your planning, and you might find opportunities to cooperate with competitors in a way that could even ultimately lead to a productive merger someday. 

Go Slow to Go Fast

All of the lessons for strategists in this post – shortening planning horizons, conducting war-games, considering coopetition strategies – take time.  The pace of the external environment creates the illusion that there isn’t enough time to do these things.

But winning firms will realize that slowing down enough to plan, simulate competitor responses, and think creatively about different options for working with competitors will provide the ability to ultimately execute faster in an accelerating market.  We call it “going slow to go fast”, and companies that plan in this manner will have the confidence of knowing that they are ready for anything. 

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