For long suffering supporters of the Wallabies, last week’s dismal loss to Wales was arguably one of the grimmest moments in the past 20 years of the sport.
We often draw parallels between life, business and sport. So what can we take from the Wallabies’ – and Rugby Australia’s – recent woes if we apply it to business?
Catonomics takes a look at three key lessons from the Wallabies Rugby World Cup campaign.
1. The downside risk of change exceeded the rewards
No one was talking about Australia exiting the Rugby World Cup in the pool stages. It had never happened before and, perhaps worryingly, the talk was that Australia’s pool was the “easy” pool.
In finance terms, this is an example of a ‘fat-tail’ event. A fat-tail event describes an event that has a relatively high probability of a rare or extreme outcome. For example, the collapse of the US housing market in 2007 which precipitated the GFC. Investors and regulators mis-calculated the probability of this occurring, and when it occurred it was catastrophic.
In Wallabies terms, Rugby Australia board appears to have grossly underestimated the probability of the failure of a new coaching strategy installed so close to the start of the sport’s showpiece tournament, with the extreme outcomes likely to play out over the next decade.
Risk management is a critical part of any agricultural and commercial business. Regular risk assessments and stress testing should be included in your annual or semi-annual discussions with advisors and stakeholders to ensure your business is resilient to risk and business disruption. A miscalculation of risk could lead to significant negative outcomes for any business, and those risks should be constantly reviewed to ensure that the business is ready for the challenge.
2. Operations, tactics, and strategies need to complement each other
Eddie Jones was always a part of Rugby Australia’s long-term strategy, especially in the post-2023 landscape, with the focus to be on gaining maximum exposure and performance for the 2025 British & Irish Lions Tour and the Rugby World Cup in 2027. The financial windfalls from these two items on the rugby calendar were touted as setting up the next 10-15 years of growth in Australia.
But his return in early 2023 to take the Wallabies to the World Cup wasn’t part of the short-term plan.
The previous coach, Dave Rennie, was building a good platform of depth and skills, and the team was steadily building performances, even if the results didn’t arrive as scheduled. Whether they would have been in contention this year is debatable, but the rugby-loving public could understand the trajectory.
Jones talked up the youth policy to build for 2027 and called it a ‘smash and grab’ campaign. But by omitting key, experienced players and coaches, changing systems, and even changing the relationship between the Wallabies and the media, Jones effectively brought in a set of tactics that completely undid the long-term strategy.
A temporal approach to business often spoken about is the operational/tactical/strategic framework. That is, operations focus on the day-to-day or week-to-week, tactical medium term (i.e. a year or season) and strategic over the long-term.
Key to this framework operating successfully is that each element must complement each other. Similarly, a business’s contingency or Plan B also needs to fit in, even if it is a last resort.
The performance of the Wallabies – and the risk to rugby union’s long-term viability in Australia – is a direct result of misaligning operations, tactics, and strategy.
3. Experience matters
One thing Eddie Jones may be commended for is his ‘take-no-prisoners’ approach to his rugby selections and vision. He backs himself completely and, when given sufficient time, it yields positive results more often than not. Look at his early record with England as evidence.
There were a lot of contentious selections – both for those selected and those left behind. But potentially his biggest failure in this Rugby World Cup campaign was to discard the Test rugby experience he had at his disposal and throw caution to the wind with the inexperienced. Michael Hooper, Quade Cooper and Bernard Foley (who made himself available) were the headline omissions, but it was the number of debutants that tipped the balance.
Experience is a valuable commodity in business, and business owners seldom rely on just their own experience alone. Successful business owners and leaders build teams around them – either of their employees or external advisors – to bring fresh perspectives and lived experiences of real-world problems.
Business leaders should remember this aspect as they head into difficult economic and business conditions that pose challenges to their own businesses.
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The Wallabies can provide valuable lessons to business leaders, employers and advisors. Risk management, operations, and experience are important ingredients. Should you and your business need to explore more detailed information in your business, please call 1300 002 286 or email on info@catoadvisory.com.au.
