An Unexpected Disruption and Transformation — Jonathan Becher, President San Jose Sharks and Sharks Sports and Entertainment
The Industrialist’s Dilemma — January 28, 2021
Our fourth session this year was the first time we spent a whole class talking about a sports team — a new industry for The Industrialist’s Dilemma. With the rise of Esports and gaming, accelerated in popularity by the pandemic, we thought we had the perfect setup: an executive from a major league sports franchise who would be juxtaposed to the CEO of a major gaming company a few weeks later (Bobby Kotick of Activision Blizzard).
Alas, if the last six years have taught us anything, our best sessions happen when we hear insights that we did not anticipate in our preparation. This year, Jonathan Becher, President of the San Jose Sharks and Sharks Sports and Entertainment, provided lenses on the company’s activities around the many opportunities he sees in the coming decades.
Empowering the Organization to Try New Things
Becher, previously the Chief Digital Officer and CMO of SAP, shared his perspective on how he and the team are looking to get the organization ready for the future of sports and entertainment. He talked not only about ensuring that the company puts a quality team on the ice, but also how he spends as much time empowering the Sharks’ organization to try new things and experiment with unique ways to engage fans. The discussion ranged from enabling digital payment methods inside of the arena, to how these digital tools enable an ongoing financial relationship with the fan base that extend beyond game days.
Worth highlighting was the language Becher used about encouraging members of the organization to try new things that might not have been considered previously. What stood out was his point of not keeping the digital transformation of the organization constrained to a new group on his team with digital competencies, but rather how the entire organization is working to engage longstanding employees to participate and lead in new aspects of business model experimentation. Becher framed the use of technology as an entryway to open up paths to grow customer engagement, and he highlighted the importance of bringing the domain knowledge around the existing Sharks’ product (hockey) with adding new capabilities — blending the knowledge of the company with new methods for growing the business. His was an inclusive message around both the talent and culture of the entire Sharks’ organization.
Expanding the Customer Base
As Becher highlighted, hockey has historically been a sport of largely white, affluent fans given the sport’s history of coming from Canada and its popularity in Northern Europe. As was pointed out by one of our students, the cost of hockey, both in terms of equipment and the need for an ice rink, has limited the number of young people that are able to participate in the sport (and who often become the foundation of a local team’s fanbase as they get older).
Becher shared that as the league has expanded to warmer climates over the last few decades, the customer base has become increasingly diverse. Over half of the season ticket holders for Sharks’ games are women, and the team has heavily promoted its local nickname of Los Tiburones, which has helped the team appeal to a broader non-white fan base. In addition, the rise of Esports has enabled the Sharks to reach customers who are additive to the sport’s traditional fans that come to the arena.
Worth noting was how Becher talked about the ability to transform the organization with technology to grow the reach of the team in ways best exemplified by the English Premier League, whose clubs find support from all over the world (as I type this, I am looking at my Liverpool Football Club scarf on my home office wall which reads, “You’ll Never Walk Alone”). For Becher and the Sharks, new digital technologies and media channels create growth opportunities well beyond the San Francisco Bay Area. Maybe it wasn’t surprising to hear Becher speak with a “growth mindset” more commonly associated with a Silicon Valley technology company. What was surprising, however, was that our discussion on data did not revolve solely around using analytics to improve the team’s on-ice performance, but rather how technology is creating the chance for customer expansion. The ways in which data is changing the team configuration was a small component of our talk; digital technologies as a vehicle to reach a wider audience was a more dominant part of our conversation.
Yes, And…
At one point we discussed many of the ways Sharks Sports and Entertainment runs its business, from putting on concerts at the SAP Center (still the Shark Tank to those who are diehard hockey fans), to doing a great job executing a sporting event, to thinking about how ESports complements the on-ice hockey team, and finally using data and communication tools to engage with fans both inside and outside of the arena on a frequent basis. Every topic we covered seemed to be followed by a, “Yes, and…” moment.
One topic we debated was if the Sharks are a local or global business. Historically, sports teams have been supported by regional populations, and teams hoped that this loyalty would stay with people if they moved out of the area. But Becher seemed to have a different point of view — he looks at other best practices and talks as someone who sees opportunities in the growth of digital media to expand reach and engagement anywhere on the planet. The organization’s willingness to use new tools and to consider how to communicate with others beyond San Jose left us seeing how an organization that blends digital and physical is impacting even traditionally local businesses such as sports teams in ways that we had not fully digested before Becher’s visit.
Oh, and Go Sharks!
