What CEOs Can Learn From The Patriots’ Recruiting Strategy

By Atta Tarki


Since hiring Bill Belichick in 2000, the New England Patriots have appeared in nine Super Bowls, winning six. They have won the AFC East and made the playoffs in 16 of 19 seasons. In fact, the Patriots just made it 10 in a row — a new record.


It wasn’t supposed to work like this. In 1994, the NFL introduced a series of measures designed to prevent teams from hoarding talent. A salary cap limited the amount of money teams could dedicate to roster building, while revenue sharing agreements ensured that even small-market teams could meet the cap. The result was a professional sports league defined by parity — at least, in comparison to Major League Baseball or Europe’s elite soccer leagues, which are dominated by wealthy clubs.


So how has Belichick been so consistently successful in the era of parity? The answer lies with a systematic, budget-conscious approach to drafting talent — an approach that may provide lessons for business leaders seeking an uptick in productivity while operating under strict budget constraints.


How Bill Belichick Games The Draft

Conventional wisdom has it that you’re more likely to find franchise players in the first round of the draft. This notion is backed by data: First-round picks are more likely to start, start for more years and reach All-Pro status than players drafted in later rounds.


But early picks are expensive. After all, draft position determines the size and scope of rookie contracts. The No. 1 overall pick in the 2016 draft, Los Angeles Rams quarterback Jared Goff, signed a four-year contract worth $27.9 million, while the No. 12 pick, New Orleans Saints defensive tackle Sheldon Rankins, received roughly half that. Many general managers thus try to assemble a peak cohort, hoping to win a championship before their roster becomes too expensive to keep together.


But if the goal is consistency over time, there are clear incentives to finding value in the later rounds. The fact is, every pick is risky — even “sure things” like quarterbacks Ryan Leaf (the No. 2 pick in 1998) and JaMarcus Russell (the No. 1 pick of the 2007 draft). Both crashed out of the league after just a few years, making them very expensive misses.


Teams seeking sustainable results are best off trading down for more picks. A multiyear study of the draft by economists Cade Massey and Richard Thaler shows that, while mean performance declines by draft round, the surplus value (i.e., the value a player provides net of cost) rises late in the first round and then continues to rise into the second. This means that, while high first-round picks generally deliver the best performance, late first- and second-round picks deliver the best value.


This is the secret to Bill Belichick’s unprecedented run with the Patriots. According to Mike Lombardi, who worked the draft for the Patriots, Belichick prizes two attributes above all others: fit and value. Not all superstars fill a role, while Belichick generally prefers to get multiple players for the price of one — thus mitigating the risk of a flameout. So he regularly trades down. This may go against the conventional wisdom that elite talent produces elite results, but it clearly works.


Lessons For Hiring Managers

Hiring a CFO, VP sales or director for your company is not exactly like finding the next unheralded superstar in the NFL draft. But the overall strategy of seeking fit and value may be a useful one for hiring managers — particularly those operating under strict budget constraints.


Selecting on fit raises the likelihood of compatibility with company culture, which in turn raises the likelihood of success at your company. You don’t want to hire someone who lacks the flexibility or specialized skill set you need, or who could grow bored and leave after you’ve made a major investment in training them. Selecting on value, meanwhile, lowers the financial risk associated with a mis-hire.


‘But I Want To Win Now’

In his book Misbehaving, Nobel laureate Richard Thaler describes a time when he and Massey advised Daniel Snyder, the owner of the Washington Redskins. Thaler and Massey had advised Snyder to follow their recommended strategy of trading down and trading pick from this year for better picks next year. Snyder didn’t follow their advice, opting instead to move up in the draft to win more games sooner.


A number of CEOs tell me how it has been difficult for them to hire good C-level executives, but they have had better results at the VP and director levels. When I ask them why they don’t hire more VPs and directors and grow those folks into C-suite roles, they often respond that they can’t afford to wait and they need to produce results for their investors now. If you as a hiring manager find yourself in a similar situation, you may want to take a step back and review how many of your senior level hires or expensive hires that have turned into star hires. You can then contrast this number with your success at one or two levels below that. How many junior level hires can you afford if you forego the senior hire? Are the odds of at least one out of two VPs being successful higher than those of just one C-level executive?


This talent strategy requires a bit more patience but could help you “win” more often. Just ask Bill Belichick, whose draft-day emphasis on fit and value has helped the Patriots stay atop the NFL for almost two decades … and counting.


This article is originally published on Forbes.



Atta Tarki is the founder and CEO of ECA and the author of Evidence-Based Recruiting (McGraw Hill, February 2020).



Atta Tarki
CEO & Founder

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