For Intermediary Change, Racing Needs a Civil War

The want for change is big in horse racing and it is probably talked about sometimes far too often (guilty as charged). But it is emblematic of an industry presently losing on both the demand (customers) and supply (horse owners) side. When a business is doing swimmingly there's no need for change, when it isn't, everyone wants it. Such is life.

If you aren't printing money - and horse racing is not - the kind of change, and how an industry needs to change is the most important variable to consider.

Professor Anita McGahan's Four Trajectories of Industry Change - Radical Change, Intermediary Change, Creative Change and Progressive Change - can help.

I would suspect most would say horse racing is in a radical change state, but it is not land lines, or hula hoops. What fits more for the sport is intermediary change.

Intermediary change is needed for industries that are in a state of flux; the core product or service is being threatened, but the assets and infrastructure have value, especially if used in new ways. An example the author notes is the traditional auction house who have had their market disrupted by Ebay, but have offered their services for online appraisals, and still own the high end.

The main issue with horse racing, compared to say an auction house, is pretty big. And it throws a big red dart into intermediary change. Horse racing deals with suppliers (horses, owners and purses) and end demand customers (those who make bets to supply money for owners to race for).

As Professor McGahan notes, when it's like the above, without a fundamental structure, it can be a house of cards, prone for failure:
Under radical and intermediating change, it is also important to interpret conflict within your organization in a new way. “Civil wars” can emerge within an organization as divisions with exposure to different segments of the business develop opposing views about the nature and pace of change. It is uncanny how frequently this happens.
In horse racing it's even worse, because it never is a Civil War. Keeneland didn't change their track back to dirt because of handle. Listen to a CHRB meeting, in the four or six hours count how many times you hear the word "customer". When a takeout hike is proposed, how many projections do you ever see of lost handle? Insiders are supply and foal crop driven, and those on the other side are either silent, or not invited to the party.

What does she suggest organizations need to have, to allow intermediary change to flourish? Something racing doesn't.

"Strong, central leadership is required to deal with the problem effectively."

That doesn't mean individual organizations in this sport have to throw up their hands and use that as an excuse. I know there are a lot of you in the business who understand betting, handle and customer concerns. My challenge to you is: Stand up and be heard. You need to, when presented with yet another supply side argument say, "what does this mean for our end user?" You need to be a part of that Civil War; be that force for the demand side, be the catalyst for discussion from all facets of the business, not just one. It's the first step for your organization to forward much-needed intermediary change. Without you, change will never happen.


Anonymous said...

Racing has leaders based on job titles more than ability to actually lead. Some suggest the leaders resemble the ostrich stereotype of hiding their heads in the sand. I would argue too many don't even bother to hide from the problems. They just deny the obvious. Businesses that don't listen to customers, don't know why people become ex-customers and continue to support failing practices eventually cease to exist.

Andrew said...

Anomymous get's it. Wish more did.


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