Real Estate & Retail and Sports Business

Bulls of the Fairways:

March 6, 2006



David Simon and Alan Cohen are outstanding golfers, among the best of all Indianapolis businessmen.

The CEOs of Simon Property Group Inc. and Finish Line Inc. share something else in common: Their companies are top performers, with their stock prices more than dou-Professor sees link between golf scores, biz success

bling in a little more than three years.

Coincidence? Not according to Dan Dalton, golf aficionado and former dean of Indiana University's Kelley School of Business.

"Business is like match play," said Dalton-a welcome message for executives dusting off the clubs and looking for an excuse to squeeze in 18 on a workday.

In other words, the ability to assess risk, size up an opponent, make smart decisions, stay composed and aggressively compete is essential to both golfers and CEOs.

And unlike tournament play-which involves four days, 72 holes and more than 100 opponents-match play is head-to-head. That makes it a perfect analogy for today's business world, where most companies find themselves with only one or two close competitors.

Most CEOs would quiver if they had to line up against Alan Cohen. The Finish Line boss is the Tiger Woods of Indiana's CEO set. He sports a 5.2 handicap, according to the U.S. Golf Association's public handicap database. That means a professional golfer would need to spot Cohen only five strokes over 18 holes to even the tables.

Just as Cohen has been hitting lots of greens out at Broadmoor Country Club, his company has been putting lots of green in the cash register. In the company's most recent fiscal year, it reported a 12-percent increase in sales.

And, no, Cohen doesn't have an unfair edge because he sells athletic apparel, he said, although he joked, "I probably look nicer than other people out there."

That makes David Simon, CEO of Simon Property Group, the Vijay Singh of the state's CEO ranks.

Simon, who declined to be interviewed, is a member of two clubs in Colorado and one in Indiana-Crooked Stick Golf Club in Carmel-and can brag of a 6.9 handicap. Golf Digest says he's been known to play from dawn to dusk while in Colorado.

Fittingly, his company isn't hitting many errant shots, either. Fortune magazine recently named the Indianapolis business "America's Most Admired Company" in the real estate industry for the second time in four years.

At the other end of the spectrum, the balance sheet of Indianapolis-based Marsh Supermarkets Inc. has more divots than the first tee at Wolf Run. In the most recent two quarters, the company has recorded $13 million in losses.

In keeping with Dalton's theory, CEO Don Marsh would have trouble keeping up with Cohen and Simon on the golf course even if they spotted him two strokes per hole. Marsh recorded three inflated scores-96, 98, 104-in the database in the mid-'90s before he either tossed his clubs in a lake or stopped making his scores public record. He wasn't available for comment.

Dane Miller, CEO of Warsaw-based Biomet Inc., also has good reason for wrapping a sand wedge around a tree. After posting a string of triple-digit scores at Warsaw's Stonehenge Golf Club in the '90s, he also stopped posting to the USGA database. Shares in the maker of orthopedic implants traded at more than $45 a little more than a year ago. Today, they fetch less than $37.

Par excellence

The correlation between golf success and corporate profits is why employees shouldn't fret if they see the CEO headed out the door with golf clubs on a workday, said Dalton, a 17-handicap.

"If you get to say, 'Good morning' to your CEO every day, you don't have a very good CEO," he said. "Business is done on the golf course and on airplanes and at dinners."

Business leaders agreed.

"[Golf] has been extremely helpful from a business perspective," said Brad Kime, a 12-handicap and president of Irwin Union Bank, a subsidiary of Columbus, Ind.-based Irwin Financial Corp. "There are limited opportunities to get to spend that amount of time with someone. If you just said, 'Hey, come over and visit for four hours,' it probably wouldn't happen."

The time on the putting green also helps executives learn how to work with a variety of personalities-a necessity for business leaders.

"To me, [golf] is about relaxing and fun and camaraderie and being with people," said the Finish Line's Cohen, who hit the links at least once a week last summer. "That's an important part of being a CEO-understanding and learning how to deal with all sorts of people and situations."

David Gartzke, a 19-handicap and CEO of Carmel-based auto-auction company Adesa Inc., said "emotional intelligence" is crucial for both golfers and executives. Golfers must keep their tempers in check when a birdie putt lips out or an approach shot lands in a pond.

"People don't like to play with [golfers who can't control their emotions]," said Gartzke, whose house overlooks the first green at his home course, the Sagamore Club in Noblesville.

Another important trait for both golfers and executives: concentration. At a time when cell phones, BlackBerrys and e-mail have created a ubiquitous avalanche of interruptions, the ability to focus on a task is just as essential for business success as it is for a golfer standing over a 4-foot par putt.

And it may be the hardest skill of all to master for Indiana's swinging CEOs. Cohen's game suffered when Finish Line stock took a dip last fall. He recorded scores of 87 and 90 in August and October, when the stock had dipped below $16. He posted a much-improved 75 on Nov. 12 after the stock rebounded.

Then again, the analogy about low golf scores and high profits goes only so far.

Marsh shares are on the rise-from a low of $5.56 at the end of January to $9.50-and probably not because Don Marsh is keeping the ball in the fairway.

And despite Dane Miller's inability to save par, Biomet's shares are up almost 100 percent in the past decade-from $19 to almost $37.

That's probably why Keith Busse, CEO of Fort Wayne-based Steel Dynamics Inc., laughed when asked if there was a correlation between performance on the golf course and in the boardroom.

"I'm a very mediocre golfer," said the 16-handicapper who's a part owner of a public golf course-Bridgewater-in Auburn.

Steel Dynamics, however, is an all-star. The company's stock was trading in the $10 range five years ago. Today, it's worth almost five times that.

But you wouldn't know it from Busse's golf game. He shot a 97 in November, his worst score in almost six months.
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