The salary cap in the NFL forces teams to make tough decisions about whether to "buy or build" top talent. The perenially successful New England Patriots rely largely on quarterback Tom Brady and a talent management system set up by head coach Bill Belichick.
Over the last two decades, the Patriots have allowed top talent to leave the team for more money, building a talent bench to fill the gaps. The result? They've continued to win as younger, lower-paid talent has stepped up to fill the void left by departing veterans wanting higher salaries.
What Belichick and the Patriots have done is to create a talent pipeline that develops young talent instead of going outside to buy pricey free agents. The only player they may risk overpaying is Tom Brady, but he's become the team leader who consistently delivers leadership that helps the team win.
Make Your Organizational Culture a Foundation for Talent
The Patriots have a culture of individual accountability and sacrifice to support a winning team, reports The Players' Tribune. For the second year in a row, Patriots wide receiver Danny Amendola took a salary cut in order to help the team sign other key players under the NFL's salary cap, according to NBC Sports. In 2014, Brady himself showed similar salary flexibility in agreeing to "restructure" his contract to free up money for the team, according to the Boston Herald.
Develop Team Players
You don't need to be the New England Patriots to understand that success in business often comes from top talent who are fully engaged in helping your business grow. But as Belichick proves, you need to have a system in place that lets you develop and manage talent wisely, aligning human capital with key strategic targets. Preparing your talent to step up if someone else leaves is key to continuity and growth.
According to the Society for Human Resource Management (SHRM), the performance of external hires is generally rated lower than internal employees promoted to the same position. The employees you develop, as Belichick does, have the advantage of understanding your corporate culture and strategy. Superstars from outside must integrate into your culture and work within your system. If they don't, you've made a high-priced mistake.
Spend Wisely for Talent
As the Patriots have shown, an accountable superstar like Brady working within a supportive system can thrive as a team versus a collection of random superstars. It takes discipline and patience to build a bench of talent, but it may make more sense than hiring external talent and hoping they're a good cultural fit. If you're not getting the results you want, you may be forced to bring in new talent with fresh ideas and ways of working. But be careful about what you're paying for — organizations hiring "superstar" talent "tend to overestimate the 'portability' of skills and experience—how effectively and easily they can be applied in new organizations," notes SHRM.
Your best move is to create organizational structures that develop and leverage talent wisely. The Patriots are not a team of stars, but they're a star team. When you incentivize team goals rather than individual goals, as the Patriots do, you can create a culture where everyone's contribution is recognized and rewarded.
Finance leaders should be making wise investments in talent management and development, setting up a pipeline of talent to meet the organization's evolving needs. Hiring new talent from the outside is one way to fill the gaps, but that strategy should also be coupled with system that keeps the internal flow of talent moving forward.
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