“Active inertia” isn’t a new concept, but it’s definitely newer than the concept of collecting purses on the PGA Tour.
In 1999, MIT professor Donald Sull came up with the idea in the harvard business review. As Sull said, “Active inertia is an organization’s tendency to follow established patterns of behavior, even in response to dramatic environmental changes. Stuck in the ways of thinking and working that have brought success in the past, market leaders are simply accelerating all their proven business. By trying to get out of a hole, they only deepen it.
What is the “hole” in the Tour case? It’s the conglomeration of issues that potential ‘new’ pro golf concepts powered by the Premier Golf League and LIV Golf Investments think they can handle better than the folks at Ponte Vedra. What are the “proven activities” to satisfy current stakeholders? The increase in the size of handbags is certainly one of them. But, “active inertia is insidious by nature,” HBR included in a sidebar to the article. “Because it stems from success, it often spreads unnoticed in businesses.” Could this happen to the PGA Tour?
There’s a reason Andy Gardiner, CEO of PGL, invoked the concept during a recent appearance on the No Laying Up podcast. Gardiner believes that basically, the PGA Tour “product” can change for the better. Better for players, better for fans, better for sponsors, better for TV rights holders. Better for everyone else, well, the Tour in its current form. Gardiner sees the PGA Tour as a brand that should no longer be a 501(c)(6) nonprofit, and he’s not the first person to make this observation.
Taken together, the PGL and LIV Golf are a kind of resistance that embodies “dramatic environmental change” as stated in Sull’s definition of active inertia. Some of the best players in the world (or at least their agents) think a different game format might work better, as does guaranteed money – and lots of it. It is a change. But in response, the Tour follows established patterns of behavior. Last week, Commissioner Jay Monahan has alerted players to a new wave of scholarships the Tour will take place in 2022. Players Championship purse is $20 million, playoff purses are $15 million, FedEx Cup overall is $75 million, invitations offering $12 million each. It’s a significant increase, sure, but more money won’t fundamentally change the Tour’s product.
“It comes down to the mentality of ‘If it ain’t broke, don’t fix it,'” Gardiner explained on the podcast, comparing the Tour to an oil tanker sailing through calm waters. It’s not easy to turn around, and why would you necessarily want to do that if the system still technically works? It surely didn’t surprise him when golf week reported the future plans of the Tour to host international guaranteed money events for the best players in the world. The move that won’t happen for at least two years, but is reminiscent of the World Golf Championships, which were founded in 1996, shortly after Greg Norman floated the idea of a competitive tour.
Sull would define these scholarship and quasi-WGC increases as strategic frameworks who have already made the success of the Tour but who now work as blinkers, or the only way to do things. Is the size of the handbag the main problem to solve? Or is it something else, like the Tour calendar, which has remained largely unchanged over the years? Or the lack of control players feel?
This stagnation of schedules is what Sull would describe as “process which harden into routines”, another principle of active inertia. The only way we’ve ever done things has to be to the right way of doing things, right?
As things stand, Tour players also have very little incentive to change their own processes. The Tour has instituted a scheduling rule in recent years that requires players to add new events they haven’t recently attended, but that’s it for the Tour injecting some newness into one of its annual tournaments. . Well, in addition to increasing scholarships. At this time, tournament directors, fans and secondary sponsors of, say, the Valspar Championship are unsure whether Brooks Koepka or Jordan Spieth will definitely show up until the week before. Should they? I know they would like to know.
Which brings us to Sull’s third condition of active inertia: relationships. They matter deeply to the PGA Tour, but as Sull writes, “relationships can become shackles” that prohibit meaningful change.
What does it look like for the PGA Tour? You can see it on the TV show. Tour sponsors pay a lot of money overall and owe a lot of value in return, and much of it is broadcast via live television. That means commercials, but it also means CEO interviews, continuous FedEx Cup point standings promotion, or when your TV screen is bifurcated with live, silent golf on the left and an advertisement on the right. Relationships are essential to this exchange of value, but over time the structure of the Tour has not changed significantly. The golf broadcast has proven to be a largely inflexible entity due to agreed-upon contracts that bind TV producers, as well as limited production budgets due to how much networks have shelled out to secure rights deals in the first place. . Who should give in when all these relationships are united and the status quo is maintained? Golf enthusiasts who want more excitement and not a Sunday siesta.
The final aspect of active inertia is values, as Sull puts it, “the deeply held beliefs that unite and inspire its people”. Over time, these values “harden into rigid rules and regulations that have legitimacy simply because they are set in precedent”.
Perhaps no precedent on Tour is more enshrined than its status as a 501(c)(6) nonprofit charitable organization. It’s a good precedent, isn’t it? After all, the Tour has donated billions to charity over more than 75 years. But throughout the past decade, that nonprofit status has been challenged by politicians because it limits the amount of money the Tour is required to pay in taxes. If the Tour were willing to abandon that controversial status and follow the for-profit framework that the PGL has set (or the path taken by other sports leagues), paying its 200-plus members would, at least in theory, become less heavy. .
Like Gardiner featured on the NLU Podcast, if golf emulated the thrilling format of Formula 1 racing – in which teams sign contracts with players – it would open up new sources of income for the world’s best players. (An obvious and sorely missing example: player jerseys and apparel.) Can the Tour’s impressive record of philanthropy continue as an extension of a for-profit league? I don’t see why not. But such a league would upset another layer of the Tour’s value system: the idea that most pros make their living, blow by blow, largely on their performance. PGA Tour traditionalists would deem the current format worth fighting for. But the player ranked 27th may not agree with 38th or 38th with 13th. It is difficult to change precedent.
It is also difficult to fight against active inertia. Whether or not that afflicts the Tour depends a bit on your view of the organization – and, alongside that, how much chaos a challenger can muster. (The PGL can muster a lot.) For the Tour optimist, every recent move hasn’t been active inertia but rather brilliant defense – just the Tour using its resources in style and appropriately. For the pessimist, this is absolutely the wrong kind of defense. It is lazy defense. Passive defense masking his aggressiveness.
For skeptics, the concept of active inertia may seem a little esoteric. But once you understand what it is, it’s easy to spot it just about anywhere.
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