http://www.linkedin.com/today/post/arti ... st-large_0Glistening examples of how not to build organizations
A few days ago, The Wall Street Journal carried a story about the CEOs of six well-known companies where shareholders are getting agitated. Among those named were Sheri McCoy of Avon and Don Thompson of McDonalds – both of whom were appointed during 2012. If either of them is cursing the impatience of institutional shareholders, they should be grateful they are not in front of ‘The Firing Squad’ – the owners of Britain’s 20 premier league soccer teams.
Bloodletting is the slavish ritual to which almost all these owners adhere. Since this season’s first game last August, six managers (the British equivalent of a coach) have been fired. One of the latest victims was Malky Mackay, coach of the Welsh club, Cardiff City. He was ousted following a series of spats with the team’s owner, Vincent Tan, the founder and CEO of a Malaysian conglomerate, who among other things decided that the team, known for over a century as the Bluebirds, should dress in a ‘lucky’ red strip and who also installed a 23-year-old friend of his sons as head of player recruitment. So frequent are dismissals like Mackay’s (who five days before he was booted was told he would be at the club for "foreseeable future") that websites, such as thesackrace.com (‘being sacked’ is the English equivalent of ‘getting fired’) are entirely devoted to the topic. These don’t lack for material: 13 of today’s premier league’s 20 managers have been in their roles less than a year.
When people buy British soccer clubs it’s as if they are immediately relinquish anything that smacks of sound management skills. They forget that picking the leader of an organization and providing him with the tools and support required to succeed are the most important tasks of any owner – whether it is of a soccer team or a large company. They seem oblivious to the idea that important decisions are made rarely. Instead, they feel that public executions – for none of these dismissals is ever conducted quietly – are the ticket to quick success. According to Soccerbase, a betting website that also tracks club statistics, there have been 303 managers of premier league clubs since the league’s formation in 1992. Nobody would consider replacing the leader of a fleet of taco trucks or head of a kindergarten in the madcap manner in which the owners of Premier League clubs swap managers.
None of the owners of NFL, NBA and MLB teams are known for being Sisters of Mercy, but they are models of compassion compared to the owners of premier league teams. George Steinbrenner, the longtime owner of the New York Yankees who could fire a manager quicker than he could say ‘strike,’ ran through 22 managers (five of whom were named Billy Martin) during his 23 years of active involvement with the club. By contrast since 1992, Crystal Palace has had 30 managers, Southampton 23, West Bromwich Albion 22 and Newcastle United 19. Only four teams – Manchester United, Arsenal, Liverpool and Everton – have had fewer than 10 managers during the same period. Arsene Wenger, the manager of Arsenal which currently sits atop the Premier League, has held his job since 1996. The extraordinary result: Wenger has managed more games for his club than all the other Premier League managers combined have for theirs. It makes Sir Alex Ferguson’s 26 year run at the helm of Manchester United even more of an oddity. Even odder were the terms of his departure last summer: a retirement that was actually celebrated and the longevity of a successor, David Moyes, who had managed Everton for 11 years. Just for the record, P&G has had 13 CEOs since 1890.
What is it about sport that causes owners to embrace their inner buffoon? Is it blood lust? Is it the revenge of people with pots of money who never possessed the skills to play? Is it just an arrogant belief that mastery of the sport is simple compared to the traits required to assemble the fortune that furnished the means to purchase a club – patience, investment, determination, stubbornness, ambition and loyalty? Or is it some primal urge to remember what it was like to throw the toys out of the pram?
Oligarchs (Chelsea) and Arabian princes (Manchester City) might have some excuse since their fortunes were furnished by connections or birth rather than painstaking enterprise. But what of Aston Villa? Since 2006 this club, in the British Midlands, has been owned by Randy Lerner, son of the principal shareholder of MBNA, the credit card company. Since his purchase, Aston Villa has had seven managers. MBNA, by contrast, had one CEO from the time of its formation in 1982 to its purchase by Bank of America in 2005.
For the most part owners conduct themselves like Mohamed Al Fayed, longtime proprietor of the Hotel Ritz in Paris and London’s Harrod’s department store, but best known for being the father of the man who perished alongside Princess Diana. Al Fayed bought Fulham, a cozy club housed at Craven Cottage on the bank of the Thames, in 1997. In the 25 years in which Al Fayed ran Harrods there was more stability in the kitchenware department or behind its fish counter than there was during his 16-year stewardship of Fulham, which saw him dismiss 11 managers and also erect a statue of Michael Jackson after the singer attended a game. The new owner of Fulham is Shahid Khan, a Pakistani immigrant to the U.S., who graduated as an engineer from the University of Illinois and subsequently has performed marvels by bootstrapping a bumper manufacturer into Flex-N-Gate, a company that employs 16,000 people and now ranks among the world’s largest automotive suppliers. Since 1982, Khan has been Flex-N-Gate’s only CEO – a tribute to the benefits of stability and purpose. After purchasing Fulham last July, it took Khan just 146 days to remove two objects: the statue of the King of Pop and the manager.
Stan Kroenke, the U.S. owner of Arsenal, is often cited as the model of temperance. Since he first became involved with the club in 2007, Arsenal has refrained from guillotining the Frenchman, Arsene Wenger. However, if anyone deserves an accolade for patience it is David Dein, Kroenke’s predecessor, who appointed Wenger in 1996. A closer inspection of the Kroenke family’s sports holdings suggests that their reputation for patience may be overdone. The Kroenkes control several U.S. sports teams – among them the Denver Nuggets (NBA), St Louis Rams (NFL), Colorado Avalanche (NHL) and Colorado Rapids (MLS) – and these teams have run through 24 coaches under their ownership.
The ineptitude of owners has ravaged Blackburn Rovers, one of only five clubs to have ever won the Premier League, that in 2010 was bought by the sons of the Founder of Venky’s, a large Indian poultry producer. As is customary for many Indian companies, a reverential portrait of Venkys’ founder, Dr B.V. Rao, hangs in all its factories and offices. The only hanging that has been done at Blackburn Rovers has been of managers. The sons of Dr B.V. Rao are now on their seventh, which hasn’t prevented the club from falling out of the Premier League into a the gloom of a lower division deprived of the glow of television revenue. When the Raos bought Blackburn, it was sitting in the middle of the Premier League, but they have since tried to run the club on chicken feed – not a recipe for success when Roman Abramovich has spent over $3 billion in the decade since he purchased Chelsea. The Raos are so unpopular with the fans that a chicken, dressed in Blackburn Rovers colors, was thrust onto the field on the day the club was relegated.
Once in a while an owner does something so foolish you wonder if he knows how to read. Take Sunderland, currently at the bottom of the Premier League, whose owner, Ellis Short, runs a private equity firm that ‘invests in distressed property assets and non-performing debt’ -- a reasonable description of the club he controls. Last March, Short hired Paolo Di Canio, who in his playing time was a gifted, theatrical striker. In September, Di Canio was banished after the players mounted a dressing room rebellion – partly caused by his ban on the consumption of coffee, ketchup and mayonnaise – but mainly because of his continuous, verbal abuse. Even a heavily discounted perusal of the Internet would have suggested that Di Canio was not a man known to possess an internal equilibrium. His memoir ‘Il Ritorno’, one of the more revealing (and occasionally beguiling) soccer autobiographies contains this description of Benito Mussolini, “He was a deeply misunderstood individual. He deceived people. His actions were often vile. But all this was motivated by a higher purpose. He was basically a very principled individual.”
If nothing else the merry-go-round that forms the Premier League’s management circle provides endless amusement – fueled by the undercurrent of xenophobia that flows through the British sports pages and the endless fuel supplied by the foibles of the protagonists. There are characters like Harry Redknapp, an endearing 66-year-old East Londoner, who has managed six clubs but has had a lifelong knack for getting into scrapes that land him on the front pages, and who, in 2012, became an “Ambassador” for Betfair, the British gaming company. Then there is Avram Grant, an Israeli who, after being fired by Chelsea in 2008 landed at Portsmouth where he was chauffeured to ‘FuFu’s’, variously described as ‘a dingy massage parlor’ and a ‘brothel.’ Nonetheless, in June 2010, Grant was solemnly appointed as Manager of West Ham on a four-year contract. He was dismissed less than a year later.
For the managers of the clubs whose owners have more money than sense, dismissal can be lucrative. Andre Villas-Boas was shown the door at Tottenham Hotspur last month with a reported payoff of $6.5M. Just about two years earlier he had pocketed almost $20M after being marched out of Stamford Bridge, home to Chelsea. The Daily Mail estimates that Chelsea has paid more than $80M to managers dismissed since 2003 – including payments of over $200,000 a week it is still making to Roberto di Matteo, who managed the club for eight months until he was banished in November 2012 even though, during his brief stint, the club had won the European Cup, the largest trophy in Europe. Roy Hodgson, who now manages the English national team, was given $12M after he was shown the door having run Liverpool for six months.
Perhaps the CEOs fingered by The Wall Street Journal can take some solace from the knowledge that they manage companies rather than soccer clubs, or from the fact that only 10 percent of the 500 companies in the S&P index replaced their leaders during 2013 – including some who had retired. But if any of these CEOs find themselves out of work they can console themselves with the thought that there will soon be a vacancy for another job – as the Manager of a Premier League team.