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Lisa Larson

Lisa Larson

Lisa Larson is the Founder and President of Larson & Partners, LLC. When she is not helping companies optimize the business results delivered from their IT projects, she can be found watching football.

Final Four: Bracketing our way to economic recovery?

The road leading up to the Final Four in this year's NCAA tournament has been a dream come true for college basketball fans. The Cinderella stories and exciting finishes fill us with a sense that anything can happen.

Wouldn't it be great if we felt that much optimism and excitement about an economic recovery? Perhaps the NCAA tournament can serve as a model for fair business competition and cure some of my post-econopocalypse cynicism.

There are two ways to get into the NCAA tournament. The first way is to win a conference tournament at the end of the season. This is how 31 of the 65 teams are selected.

The other way is to be selected by a committee of 10 athletic directors and conference commissioners. This is how the remaining 34 teams are chosen. These committee members -- a representative mix of all the large and small conferences -- consult a statistical index, the Ratings Percentage Index (RPI). A committee member may not weigh in on his own conference to avoid conflict of interest. The result is excellent teams who haven't been able to win their conferences are rewarded for their consistent, season-long performance.

Once the teams are chosen by these two methods, they are then "seeded" or ranked and placed into regional brackets. The brackets determine the strength of the Tournament schedule, who plays closer to home, and ensures the best teams from each conference don't play each other until late in the tournament. The Final Four teams and NCAA champion are determined by head-to-head competition

Just imagine if financial services institutions competed under similar rules. For starters, there is no such thing as "too big to fail" in the NCAA tournament. This year, top seeded teams like Georgetown have been beaten by non-top 10 teams like Ohio on the road to the Final Four this year. No matter how big your reputation, losing on the court means you're out.

In the NCAA tournament, large teams cannot influence a contest in a way that sets up smaller teams to lose, as Goldman Sachs may have contributed to Greece's current financial crisis.

It would be nice to see an RPI, a selection committee and a bracket system to help small to mid-sized software and services companies, which are providing better quality at lower cost but still can't compete on equal footing?

In response to the economic downturn, many larger firms slashed their rates far below market to keep their big contracts. Smaller firms, of course, cannot afford a similar "loss leader" strategy. Larger firms also ceased innovation and technical investment during the downturn, leaving behind a large number of unhappy and underserved customers. Yet, credit is so tight that the small to mid-sized firms cannot get access to operating capital that would let them compete for those customers.

Wouldn't it be great if a committee of industry leadership could offer a ranking system, free from conflict of interest, that allowed companies that have demonstrated quality and success to compete with those who have enough capital to withstand the downturn? Innovation and nimble competition should be exactly what drives the economic recovery.

I will be savoring every moment of the Final Four and the NCAA championship games this year -- watching a team from a lesser-known school like Butler step onto the court with a perennial powerhouse like Michigan State and have every chance to win. It may be my last chance to see something like that for a while.

READ ALSO: Larson on how college football's BCS system can fix corporate compensation.

By Lisa Larson

 |  March 31, 2010; 3:48 PM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Please report offensive comments below.

You are mistaken. There are only 30 conference tournament champions, not 31. The Ivy League has no tournament, and sends its regular season champion.

Posted by: Nemo24601 | April 1, 2010 7:04 AM
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