INNOVATORS' INSIGHTS ISSUE

Despite a tense, exciting final day that featured the world’s most popular player in contention until the final hole, television ratings for The Masters disappointed. Like all forms of entertainment, golf is struggling to figure out how to hold onto mass audiences in the face of a seemingly infinite competitive set.

Golf has a more fundamental problem, however: it finds itself in a classic innovator’s dilemma. The sport needs to approach innovation in a fundamentally different way if its hopes to grow in a meaningful way over the next decade.

An intriguing feature in The Wall Street Journal in early April framed the issue nicely. When Tiger Woods burst on the scene a decade ago, golf embarked on an ambitious effort to try to get more consumers—particularly youth, women, and African-Americans—to start playing golf.

The effort, called “Golf 20/20," involved a series of efforts to increase the number of annual participants to 55 million by 2020 and to double the number of annual rounds. Specific initiatives include the Professional Golf Association’s Play Golf America program, which features free lessons for new golfers, a Web site, and a series of television commercials aimed at the non-golfer.

However, these efforts have had mixed results. While many non-traditional consumers have picked up a set of clubs to try a round or two—more than three million people try golf for the first time each year—few became hard-core golfers.

Even worse, golf’s efforts to expand its audience risked alienating hard-core golfers. As the construction of new courses declined in recent years, the influx of novices on existing courses meant that hard-core golfers had to cope with rookie golfers’ decidedly slow play. Slow play is more than an annoyance: Slower play lowers course utilization, meaning courses cannot squeeze in extra rounds.

In short, golf’s efforts to expand leave everyone a bit worse off. The golf courses have to work harder to make money. The nascent golfer finds the golfing experience disappointing. The hard-core golfer is put off.

It is a classic challenge. Trying to convince what we call nonconsumers to consume what they have demonstrated they don’t want is a tough proposition. Even if you can convince nonconsumers to try the product or service, that is no assurance that they will become lifetime customers who are so critical to any business’s long-term success.

Signs suggest that golf is going to try to break out of this dilemma by increasing its focus on its core customer and decreasing its market expansion efforts. In the short run, this strategy is very likely to be successful, at least on the surface. Demographics are working in golf’s favor. As the baby boomer population ages and retires, they will have spare time and disposable income, which is likely to lead to them playing more golf and spending more on golf equipment.

One industry consultant told The Wall Street Journal that “increasing the ‘buy rate’ among existing consumer categories is much more efficient than attracting and retaining new demographics.”

The consultant is of course right. But the easier answer isn’t always the right one. If golf isn’t able to attract new customers—particularly young ones—it is very likely to face a crisis in 10 to 15 years. Consider the newspaper industry. Young readers began deserting the newspaper in the 1970s. The industry didn’t really feel any pain until the last few years, when it became clear that the failure to create a habit in a generation of consumers could prove devastating.

The challenge is that today’s leaders are unlikely to be around when golf faces a true crisis. Golf’s leaders need to recognize that long-term success might require taking actions that appear to be sub-optimal in the short term.

True innovation is required. Instead of trying to convince nonconsumers to consume existing products, golf needs to innovate to remove barriers to consumption.

Why don’t people play golf? It is relatively expensive, requires heavy time investments, and can be very frustrating for all but the most skilled players. Innovations such as easier-to-use clubs and courses with fewer holes can help to address these barriers.

Golf has begun to experiment with course-related innovations. A decade ago some entrepreneurs began to create high-end practice facilities that would allow people to have meaningful golf “experiences” in an hour or two. Some courses are breaking their 18-hole courses into three groups of six holes. Instead of giving consumers the option of playing nine or 18 holes, the re-design will allow consumers to play six, 12 or 18 holes. The good news is that some of these initiatives can help to attract new golfers while creating new playing opportunities for current ones.

Easier-to-use clubs are a trickier issue. Many of the game’s overseers worry that creating clubs that are too simple to use could destroy the essence of the game. One option: “bifurcating” the club business into a professional arm and an amateur arm. Although golf’s leaders worry about this approach, the Journal article provided a good analogy: just think where the skiing business would be if it hadn’t embraced snowboarders a decade ago.

To succeed in the long run, golf has to realize that the question isn’t, “Do we serve our best customers better or reach new customers?” but “How can we simultaneously serve our best customers better and reach new customers?”

If golf can’t manage this balance, expect to see articles cropping up in about a decade with titles such as, “Whither the next generation?” Golf will face a true crisis as core customers age and it is clear that it is too late to quickly cultivate customers in younger demographics. Golf’s overseers have a choice. Plant the seeds of growth for the next generation or face an inevitable crisis.

For more information

“Who Are the Best Customers for Our Products?” Chapter 4 of The Innovator’s Solution: Creating and Sustaining Successful Growth, by Clayton M. Christensen and Michael E. Raynor. Harvard Business School Press, 2003.

“Wii, Zune, and Nonconsumption,” Innovators’ Insights #72, September 26, 2006 discusses the value of competing against nonconsumption.

“How Golf Went Off Course,” by John Paul Newport. The Wall Street Journal. 2 April 2007.