What CEO’s Can Learn From Manchester United

Last Sunday night I sat and watched the excruciating demolition of Manchester United by Liverpool in England’s Premiership League. It was a brutal sporting moment, not only for the extent of the defeat (0-5) but the way it exposed an uncertain United team and called into question the future of their manager Ole Gunnar Solskaer.

Beaten by Liverpool

For the uninitiated, he is a United hero – having scored the winning goal in the 1999 Champions League final, though such exploits offer little sanctuary today, during the week Barcelona sacked their manager Ronald Koeman, who scored the winning goal for them in the 1992 Champions League final.

Solskaer’s apparently uncertain situation is part of a pandemic of managerial sackings (mostly in the UK). Steve Bruce another former United player lost his job as manager of Newcastle as its new Saudi Arabian owners took control.

Should Solskaer leave United, he will be the fourth manager since Sir Alex Ferguson retired. Together with Sir Matt Busby, Ferguson is distinguished by not only great success, but longevity of tenure. He and Busby are two of the longest serving topflight managers and it is worth mentioning both are Scottish – another distinguishing characteristic of the best managers in the history of British football.

Scots to the fore

Today, there are few Scots at the helm of British football clubs (I count five in the 90 main League clubs) and few have tenure. Indeed, in the post war period the average tenure of a British football manager was seven years, at the start of the 1990’s it was three years and today it is not far off 450 days. Those readers who are not football fans will be wondering at the relevance of this trend.

In my view, football is a sign of the way we live now, and a very public testimony to the forces acting on public and corporate life (there is even a Harvard Business School case study on Sir Alex Ferguson’s management technique, and he co-authored a book with venture capitalist Michael Moritz). To exaggerate a little, in football, the robustness of an institution is on display every week, and not only quarterly earnings in the case of companies, or elections in the case of politics.

In this respect there are parallels in the corporate world, a striking one is that the tenure of CEO’s is shortening to about five years for the large US companies, with a small group of ‘survivor’ CEO’s managing to stay on for longer, according to work at Harvard and some consulting firms. Turnover of CEO’s is also at record levels.

This can be attributed to many factors – more demanding shareholders and the rise of activism, the strains and complexity of running a large organisation (not to mention the attractive compensation that comes with this). In addition, we might also link it to the speed at which new technologies, markets and corporate forms emerge and commensurately with which incumbent firms are left – obvious examples are Nvidia versus Intel, Tesla versus GM and Stripe versus Citigroup.

CEO’s as footballers

Another interesting aspect is that like football, companies, financial institutions, and investment funds increasingly talk about the need to manage talent, both in the sense of recruiting creative people, equipping, and supporting them in the right way and locating them in the correct place in organisations.

There is a good debate in academia as to whether individuals or firms are responsible for innovation, and a recent, interesting paper out of the NYU and Rotterdam University shows that individuals (rather than firms) tend to be the locus of invention. I still think that firm culture, or indeed national economic culture, is very important in permitting innovation and allowing a good chunk of the financial benefits of innovation to flow to individuals. Again, football is a good case study here.

A final, worrying thought is that, while football has largely left ills of the past (such as extreme hooliganism) behind it, it is a stage for some of the uglier phenomena of our time, in particular social media led abuse of players and club officials. Ironically, in a post Brexit Britain that is retreating from globalization, the Premier League is a platform for European skill (for example Wolves a club in the West Midlands, a region that voted 60% Leave, has a distinctly Portuguese squad)

As I send this, Manchester United have beaten Spurs by three goals, so it looks like Ole may stay for the time being. He can draw a little comfort from Sir Alex Ferguson’s early years. I still prize a photo of my teenage self with Sir Alex in 1987 – two year later in 1989 he was struggling to make his mark at United and some fans hung a banner ‘Three years of excuses and it’s still crap’. He went on to be the most successful manager of all time.