The North Bay Business Journal, a publication of the New York Times, is a weekly business newspaper which covers the North Bay area of San Francisco – from the Golden Gate bridge north, including the Wine Country of Sonoma and Napa counties.

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Article published -October 5, 2009

Building a Business: Do you punt on fourth down because you always do?

Sure it’s normal, but what’s normal about his economy?

“Two roads diverged in a wood, and I … I took the one less traveled by, and that has made all the difference.”

– Robert Frost

Several years ago when my father was in his final days, his bonhomie in full bloom, I sat in the room while the doctors administered a few basic tests to assess his cognition.

“What country do you live in,” they asked and Dad answered correctly.

“What city do you live in,” they asked. Dad answered “Grand Rapids,” correct again.

“What state do you live in,” they continued. Dad, ever alert, laughed and responded … “Discombobulation.”

I think my father would agree that the “state of discombobulation” is still a pretty good word choice today. So, maybe it’s also a good time for some fresh thinking … to shake things up, tip them upside down, to innovate … in other words, take a few calculated risks to see if we can generate some new ideas.

I read recently about Kevin Kelly, a high school football coach in Arkansas, who has developed a few football rules that most of us would find ludicrous, to wit:

1. His team hasn’t punted since 2007, when it did so as a sportsmanlike gesture in a very one-sided game.

2. They don’t kick field goals.

3. They don’t run back punts. They don’t even try to catch them.

4. They love onside kicks.

There’s more, but you get the gist. Much of the basis of his game plan originated with a documentary he saw, but has been supported by the work of David Romer, a Cal economist who published a study conducted covering three NFL seasons.

Mr. Romer’s academic interest emanated from his curiosity about how firms react to competition and whether they truly act to maximize their chances for profitability. He thought football offered an empirical way to test strategic decision-making, since there are myriad details about the situations faced by teams when those decisions are made. I downloaded his white paper (you can get a copy in various formats here) in which he closely examined the fourth down decisions made in the NFL on whether to punt or go for a first down.

What are some of the metrics that Kelly and Romer uncovered for each of the four enumerated situations?

– On the team’s own half of the field, going for it on fourth down is usually better as long as there are less than four yards to go. Moreover, within the opponent’s five-yard line, a team is always better off by going for it, yet we rarely see that happen.

– When a team faces fourth down and goal to go on its opponent’s two-yard line, attempting a field goal is virtually certain to produce three points, while trying for a touchdown has about a three-seventh’s chance of producing a touchdown, essentially resulting in the same expected payoff in terms of points. But if the team tries for a touchdown and fails, its opponent typically gains possession of the ball on the two-yard line; contrarily, if the team scores a touchdown or makes a field goal, the opponent returns a kickoff and usually gets much better field position. Thus, by trying for a touchdown, a team’s opponent is generally left with a considerably worse field position.

– Particularly in high school where the punts don’t go so far, Mr. Kelly has concluded that the risk of fumbling or a penalty outweighs the value of punting.

– According to Mr. Kelly’s figures, the receiving team after a kickoff takes over on its own 33-yard line on average. After a failed onside kick, the team assumes possession on its 48-yard line. Since they typically recover about 25 percent of their onside kicks, he figures you’re giving up 15 yards for a one in four chance to get the ball back, a risk he says he’ll take every time.

For most of us, it’s convenient to take the easy road and make the decisions that we believe are expected of us rather than ones that are more unconventional and may be challenged.

In many ways, we’re like football coaches, acting conservatively because, like them, we might get fired for “going for it” and missing, but we’re rarely fired for punting on fourth down.

Maybe that’s the wrong approach in this bull-headed economy.

Maybe it is time to go for it.

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Lary Kirchenbauer is the president of Exkalibur Advisors Inc., providing practical business strategies for family and other privately owned businesses in the middle market. He works closely with senior executives and their businesses to accelerate their growth and improve personal and professional performance and hosts a CEO Round Table for middle market companies in the North Bay. Please visit www.exkalibur.com for additional information.