May 07

Why Manchester United’s succession planning strategy is bad for business…

Ferguson and MoyesSo over the weekend, I was chatting with a few of my football buddies and out came an analysis of the recently woeful performances of European Football Powerhouse and permanent residents at the so-called Theatre of Dreams ~ Manchester United aka ManUtd. Looking at the current situation and comparing it to any business would be very understandable as the unique similarities for any successful business usually hinge on a very strong and powerful system that was designed by an even stronger BOSS~MAN or BOSS~WOMAN [Usually called a Chief Executive Officer (CEO).]

Truth be told, every time I have heard that line, “if it isn’t broken, do not try to fix it”, I have always wondered what actually happens if by any sudden movements, it does crack and worse still, break?

In 2002, on the night of Christmas Day, former Manager of ManUtd, Sir Alex Ferguson shelved his retirement plan. His family convinced him to remain in charge of United; Cathy, his wife of 45+ years bluntly listed her reasoning: “One, your health is good. Two, I’m not having you in the house. And three, you’re too young anyway.” Ferguson informed the ManUtd hierarchy of his U-Turn the following day and resumed work at once.

If we could go back to this day in 2002 and give Sir Alex some advice, we would all come up with what has been mentioned countless times over the past 6 months or so about how Sir Alex’s legacy has been blemished by his appointment of a certain David Moyes to take over possibly the world’s greatest football club in sheer size, money-spinning and atmosphere.

hand over the baton

Truth be told, SUCCESSION concerns are at the top of every company board’s to-do list. Bad luck or surprise can never be blamed for coming up short in this area.  Everyone knows that the CEO (and other key leaders) can be here today and gone tomorrow, whether by choice, injury, scandal or lacklustre performance (ask Andreas Villas Boas, as well as Carlo_Ancelotti why they left Stamford Bridge). Instead, most companies do a poor job at succession planning because they don’t know how to develop a process that includes accurate leadership assessment.

The first step in succession planning is to get an accurate assessment of leadership potential. Unfortunately, this is harder than most people think.  As a society, we rely on some rather misguided ideas about what is important for leadership success.  When it comes to evaluating talent, for example, most people get seduced by a charismatic personality, Ivy-league credentials or even past experience. These factors sound important, but at best they only tell half the story.

The essential leadership attributes that every organization should be seeking in their leaders include: integrity, empathy, emotional intelligence, vision, judgment, courage and passion. When even one of these is missing, a leader will eventually fail. Thus, it is imperative that organizations understand what their rising stars need to work on before moving ahead.

Note that without this knowledge, it is impossible to effectively match a leader’s strengths with the requirements of a given position. A leader who needs to improve her empathic skills and social savvy, for example, might be given a role that requires her to mediate severe conflict and to interact with constituents all possessing different agendas and motivations.

With this said, we can compare;

Be Real – Results vs Expertise

You can have all the credentials in the world, but if they do not equal results, younger employees will not care about your credentials, degrees and experience and will not recognize you as a leader. Today’s younger employees are not impressed with the letters of the alphabet that follow your name. Consider the example of Kevin Garnett, the professional basketball player. He came into the NBA directly from high school with no college basketball experience or degree. Within the years, he was an NBA All-Star. What we want to know is if he can put the ball in the hoop, and we are less concerned about how much he studied hoops. In today’s world, it is about results – but not results at any cost.

Analysing David Moyes’ decade at Everton is not as hard as it looks. Although you cannot fault him for winning the Premier League Manager of the Year 3 different times (2003, 2005 and 2009), you can indeed fault him for not collecting any silverware over the course of his tenure at Everton.

Personality vs Shared Journey

Leadership today demands someone who is not afraid to “get dirty” alongside employees. Even if they don’t have to actually pitch in with the work, it is important to value the work that employees are doing, and more important to make sure that the employees feel valued as people. Today’s employees want to know that leaders care about them and demonstrate that caring attitude in a variety of ways.  Getting dirty” with employees is one sure-fire way to impart that feeling. It is also critically important in our world of complex relationships, that leaders are willing to confront difficult situations head-on, in a principled and ethical way. Leaders who stay silent in the face of controversy will soon discover that employees will soon feel that they are “taking the fall” for their leader. This is not a very healthy situation.

The debate at ManUtd about whose fault it was for the “fairly good-yet below ManUtd standards” results will rage for a few more months and even after a new Manager is appointed, it will not suffice as some individual players were seen to be dissenting to David Moyes.

Succession-Planning-2Succession planning is a process for identifying and developing internal people with the potential to fill key business leadership positions in the company. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. Whether from within or from without, it becomes imperative to not just have a strong feeling that one will succeed.

Historically, succession~planning has been relegated to a process focused on simply “replacing” a particular individual who is retiring with someone who is most like that particular individual.

Although instituted quite frequently, this historical approach ignores three truths that are worth examining.

  • First, that there are some individuals who are so unique, or, simply “iconic” (think Warren Buffet/ Steve Jobs and of course Sir Alex Ferguson) that working feverishly to “replace” these types of individuals with so called “clones” is both foolish and fruitless. I once heard a Board Director of a local Utility organization was fired for being objective when speaking of the challenges in succession planning for their particularly notable out-going Managing Director.
  • The second truth that is ignored by this historical approach to succession planning is that, most often, successful organizations are led by highly effective teams. Even in organizations where there is a uniquely gifted leader, that leader is usually surrounded by a complimentary group of individuals who function synergistically with that leader (and each other) to bring about extraordinary results. One then wonders why David Moyes replaced a fully successful team at ManUtd with his list of also-rans from EvertonFC as soon as he assumed the Manager’s position at the Theatre of Dreams.
  • Third, the historical approach of simply replacing the professional characteristics of a particular retiring Director ignores the truth that what worked best yesterday for an organization is often rather different from what will work best in its future. As such, there needs to be a focus on what the organization’s strategic plan is moving forward and where the synergistic gaps are on the Board in contributing to good governance in the foreseen future. Or, to illustrate the matter more poignantly – when Magic Johnson was asked about his success in professional basketball, he replied “Some people run with the ball. I prefer to pass the ball to someone who is going to score.” Like basketball, many corporations are engaged in markets characterized by fast moving dynamics; the kind that require “moving” to where the market is going to be.

So, given these three truths, the historical approach to succession~planning typically produces less than positive long term results for an organization. When it comes to succession planning, some may simply say what has appeared in numerous Nike ads, “Just Do It”.

However, an improved approach to be considered for Director Succession Planning is this — “just do it well”.

In a parallel sense, Leadership and Succession planning should include an effort to consider the “future” and, likewise, anticipate the necessary skills, expertise, leadership style and personal characteristics that will be most needed moving forward. Just like corporate entities, in the sports world, “Life comes at you fast”. Sure, some industry segments have dynamics that change and evolve more rapidly than others. However, they do indeed all change and, as such, any succession planning activities should include a focus on what will be needed to compete and thrive in the markets of tomorrow.

Many strategists will say that sport is far more advanced than business and that where sport is today, business will inevitably follow. However is succession planning one area where business has the lead? There is obviously a realisation in football that the manager is crucial to team success; however does this resonate through to structured, pre-empted succession planning from within?

I would argue that it does not.

Good management in both sport and business is a distinct and uncommon skill, identifying and developing internal people with the potential to fill key business leadership positions is important for long term success. 

In comparing Sir Alex Ferguson to David Moyes

“Alex was completely embedded in the club. He was in a completely different position to David Moyes,” said former AS Monaco CEO Tor-Kristian Karlsen. “Maybe in hindsight David probably underestimated the magnitude of the position. I tried to explain to David that it would be like going from steering a yacht to a cruise liner.” He added.

Promoting from within a successful firm seems to make sense, but may prove no better than looking outside. Some dominant CEOs, driven by ego, do not tolerate other alpha types around them; so when the time comes for them to go, insiders are too weak to step into the breach.

Others champion executives in their own image, regardless of whether they will have the right skills for the future.

Dilbert on Succession Planning

And you wonder why Manchester United legend, Mr. Ryan Giggs was given the Acting Manager role….

Edmund KamugishaEdmund is the Engagement Director at BLEGSCOPE®, and has over 9 years of management consultancy experience notably in MSMEs, FMCG companies and in the service industry. You can follow him on twitter: @edmokmg

 

 

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