This week’s race at Belmont was a disappointment for a host of people on the I’ll Have Another team – including owner Paul Reddam, trainer Doug O’Neill, and jockey Mario Gutierrez. But there’s a solid business strategy lesson to be had in the retirement of the winner of two jewels in the Triple Crown – the Kentucky Derby and the Preakness.
Sure, it’s possible Reddam’s team could have raced I’ll Have Another on Saturday. They might even have won. It’s easy to say on paper, that you should sacrifice the opportunity for a huge tactical win, in favour of your company’s long-term strategy. But in the modern economy, where the long-term planning horizon grows increasingly shorter, this can be incredibly difficult to achieve. Will you as a manager forfeit a huge, immediate payoff in favour of a long-term goal that may not be achieved until you’re no longer even with the company? Suddenly it doesn’t seem so simple.
The folks backing I’ll Have Another got it right. They decided it wasn’t worth causing undue pain and suffering to the horse. But there’s more. Clearly they thought about the opportunity cost as well. Had they risked running the race, they might not only have lost, but may have injured I’ll Have Another sufficiently to ruin his career as a valuable stud. So maybe I’ll Have Another was just running a different race.
Next time you’re tempted to over-reach your risk tolerance in favour of a potential short-term gain, make sure you’re not just betting on the right horse, but on the right race.
Improving the odds on your business,
Megann & Steve