30 Nov 2013

Ferguson’s Fomula by Anita Elberse with Sir Alex Ferguson [HBR Oct 2013]


The October edition of Harvard Business Review contained an article by Anita Elbserse, a professor at Harvard Business School.  In 2012, Elberse studied Sir Alex Ferguson’s management approach to Manchester United and developed a Harvard Business School case study which she taught to a “standing-room-only condition” class, and then had Sir Alex elaborate on the eight leadership lessons that Elberse thought could be applied “to business and to life”.

The eight leadership lessons condensed by Elberse were:

1.       Start with the Foundation

2.       Dare to Rebuild your Team

3.       Set High Standards – and hold everyone to them

4.       Never, Ever Cede Control

5.       Match the message to the Moment

6.       Prepare to Win

7.       Rely on the Power of Observation

8.       Never Stop Adapting

Through the eight leadership lessons, Elberse examined Sir Alex’s qualities that enabled him to propel Manchester United, a terrible club on the cusp of derelegation to a lower division in 1986, to the most loved/hated (depending if one is a fan of the club or otherwise) club in the English Premier League in 2013, having captured 13 English League titles and many other domestic and international trophies, and with many glittery alumni as well.

Elberse’s article is a good read.  She traced the raise of a ho-hum club through the shrewdness and foresight of a tough Scotsman who suffered no idiots from his young charges.  Sir Alex also explained his rationale on the actions he took. 

I was quite surprised that a Harvard Business School case study was built around a club manager.  However, with clubs changing owners more frequently and being run like billion-dollar enterprises now (case in point:  Manchester United’s value was USD2.3 billion when the Glazer family floated it on the NYSE slightly more than a year earlier in August 2012), there is logic in studying a man who ran a club much like a person who ran a billion-dollar business.  Elberse’s eight leadership lessons were also very generic and could be applied to many situations:  a start-up, building a sports team, building a family unit, even.  A bit too over-generalizing, I thought, for a “standing-room-only condition” class.

Elberse did a good narration of things done right by Sir Alex. However, I felt she had not properly examined or acknowledged the context of Sir Alex’s success.  As Sir Alex elaborated on “1. Start with the Foundation”, “In today’s football world, with a new breed of directors and owners, I am not sure any club would have the patience to wait for a manager to build a team over a four-year period.”  When Sir Alex was hired in 1986, business cycles were starting to shorten from the ten-year cycle.  Many players came from working class backgrounds, and sports was probably their tickets to success.  They were not represented by agents and commercials mainly stared celebrities and models.  Oh, and most players were not the spoilt superstars paid gazillions to strut their stuff and demanded to start for every match today.  Club owners also probably had a longer horizon on their investments and did not allow prima donnas to dictate the firing of an unpopular manager.

Now, money to the English Premier League flows in from Russia, Middle East, and I dare venture, soon from China.  This has brought greater excitement to the League, where managers now have greater war chests with which to acquire players.    Performance is now measured in terms of numbers of matches, instead of seasons.  A manager who loses matches consecutively could be fired during the season.

I wonder, given the current situation, if Sir Alex has just become a manager in the past few years, would he have attained the same success with the same club (never mind Manchester United, any club in the English League) for 27 years.  Perhaps things may have turned out differently.  With huge war chests and demanding owners who want results yesterday, Sir Alex might not have spent time and effort to spot and nurture young talents.  Simply purchasing a proven player from another club (Inter Milan springs to mind) would be a speedier route to hitting a manager’s KPIs.

 Harvard Business Review does a great job putting together case studies of success stories and creating lists of qualities and action items as guides.  For every successful company or executive, there is another failed company or executive.  Telling readers what was done right is really helpful.  Telling readers what was done right given the situation would have made the eureka moment even brighter.

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