Change at Manchester United

September 14, 2014

by Paul Hinks

Manchester United’s current turmoil provides a platform to explore how leadership dilemmas are influencing events at the world famous football club

THIS DEVELOPING STORY IS BEING UPDATED REGULARLY.  ADDITIONS TO BE FOUND AT THE END OF THE ORIGINAL POST

On the 10th Sept 2014 the BBC reported Manchester United’s annual revenues They had risen by 19% to £433.2m -but they also reported an 84% drop in Man Utd’s profits.

Executive vice-chairman Ed Woodward directed attention towards a new shirt deal with Adidas. When a club of Manchester United’s stature is discussing shirt deals instead of trophies there’s implicit recognition that it has fallen below its own high standards of achievement.

Change vs Inertia

Sir Alex was manager of Manchester United between 1986 and 2013 – his teams became synonymous with success, dominating footballing headlines for all the right reasons. Trophies symbolized the success; fans and pundits alike enjoyed watching an entertaining style of football which also delivered results – to the envy of rival fans, this was the ‘Manchester United way’.

Manchester United’s culture, discourse and identity

Reference the ‘Manchester United way’ and it has a different meaning to different people – perhaps a benchmark for free-flowing attack minded football, or a fan’s recollections of an important victory against a fierce rival; perhaps somebody referencing the successful development of Man Utd’s youth into world class talent?
A great attribute of sport – and football in particular – is that it provokes opinion and debate effortlessly. For a club of Manchester United’s stature, any deviation from their own high standards of success amplifies the process of inquiry.

Alpha Males and Autocratic Leadership

The appointment of David Moyes as Manager is increasingly reflected upon as a transition period which didn’t go to plan. The swift and recent appointment of Louis van Gaal as Manchester United’s manager [19th May 2014] takes the club in a different direction again. In some ways Louis van Gaal’s leadership style has parallels with Ferguson’s: strong values; clear standards; absolute authority. In Ferguson’s time those who crossed him, or fell short of Manchester United’s standards, quickly found themselves playing for another club. Louis van Gaal maintains a similar reputation.

The ‘Make or Buy’ dilemma

In his short tenure, Louis van Gall his has spent in the region of £150m bringing in new players. He’s also started the process of shaping his team, which includes the controversial sale of highly rated home grown player Danny Wellbeck to Arsenal for £16m. Are we witnessing the start of a new ‘Manchester United way’ – one where success is bought rather than developed in-house?

The Guardian provided additional commentary on the situation:

Ryan Giggs has denied Manchester United’s recent transfer policy represents a betrayal of Old Trafford traditions, although Nicky Butt, the club’s reserve team manager, admitted promoting homegrown talent must take a back seat under Louis van Gaal.
United have spent £215m on new players over the past 12 months and off loaded the academy graduates Danny Welbeck to Arsenal and Tom Cleverley to Aston Villa on the day Colombia international Radamel Falcao arrived on loan from Monaco .

That turnover prompted Mike Phelan, United’s former assistant manager, to accuse the club of losing their identity, while Eric Harrison, the ex-youth team manager who brought through the famed “Class of 92”, said United were losing “their soul” as a consequence.
There’s a certain paradox and tension between retaining tried and tested methods versus embracing new and different ways of working.

Like any organisation, Manchester United has various metrics to measure its success – trophies remain the currency that most fans prefer to use – but perhaps here is one of the biggest misnomers of football – football is increasingly commercially focused. Sure the fans crave the bragging rights that go with winning, but there are other stakeholders to consider too.


‘Something Special’

Sir Alex had an enviable reputation for developing the potential in players, nurturing youth into world-class talent; examples include: Ryan Giggs, David Beckham, Gary and Phil Neville and Nicky Butt – there are others too. Perhaps aged 63, Louis van Gaal perceives time is not on his side? Perhaps his experience helps him recognize the urgency in returning Manchester United back to be serious challengers for honours? If he doesn’t succeed quickly, perhaps another candidate will be afforded the opportunity?

Manchester United’s various stakeholders – its fans, directors, owners, sponsors – and indeed its closest rivals all expect Manchester Utd to be serious contenders for honours. Few other clubs have history and expectation to deliver success – Louis van Gaal is shaping the future of club which many regard as ‘something special’. How he delivers will be watched with great interest.

UPDATES START HERE

July 14th 2014 

The Adidas shirt deal is worth £750 million over ten years.

September 14th 2014

Manchester United beat Queen’s Park Rangers 4-0 Van Gaal’s team with its costly Galacticos win in style at Old Trafford. Move from 17th to 9th in league table.


The death of Ian Paisley

September 12, 2014

Ian Paisley died today at a time when Unionism, the cause of his political life, faces its most recent challenge in the Scottish Referendum. For decades he was the ‘big man’ of politics in Northern Ireland who was to make a remarkable transition as a supporter of the Good Friday peace process. The perceived change clinching the Northern Ireland peace process symbolized by the handshake with a loathed adversary Martin McGuinness which was to lead to an unlikely and warm working-relationship, and friendship.

In his time, he was as divisive as Margaret Thatcher, and her equal in unshakably rigid beliefs, vehemently expressed. According to friends, the two leaders shared a softer private side, some would say a shadow-self, beneath their blustering public persona.

The mix of charm and menace used to remind me of other physically formidable charismatics such as Tiny Roland and Conrad Black.

To go more deeply

An earlier LWD post looked at the period of the transformation to elder statesman and peace broker.


Jeff Tarango is the Homer Simpson of tennis commentators. Duh.

September 8, 2014

Tennis commentator Jeff Tarango wears his heart on his sleeve. At the US Open he revealed remarkable similarities to Homer Simpson

Homer Simpson is the much-loved character in the peerless comedy series The Simpsons. He is portrayed as capturing popular stereotypes of the American culture, through his basic decency, his loyalty to his family and the American dream. He is also lovably dysfunctional socially, simplistic and unreflective in his beliefs and hapless in his unconscious mediocrity.

Jeff Tarango

Jeff Tarango has Homeric aspects to his personality. Perhaps the most famous is on U-tube showing how he defaulted himself from Wimbledon after a clash with an Umpire and a very Homer-like argument that he should be able to tell the crowd to shut up as they we telling him what to do. Then his wife, as loyal as Madge Simpson, manages to seek out the Umpire and give him a retaliatory slap.

Jeff never scaled the heights as a singles tennis player, although he crept into the top fifty with a career-best of 42. But like Homer Simpson , he had his triumphs over fate and adversity. He became a tennis pundit. Among his present employers is the BBC, as much part of the British establishment as The Wimbledon Lawn Tennis Club.

Tarango at the US Open

Even keen tennis fans in Europe probably missed the fantastic match at the US Open at which
Cilic beat Federer in the early hours of the morning, European time. I first learned of the result reading Tarango’s account of the match as it unfolded.

It is fair to say the Tarango is not your average neutral commentator. He wanted Federer to win. Big Time. His recorded view became more Homeric as his man struggled and headed out of the tournament.

Federer, he declared, would be back to win Wimbledon next July. In fact he would go on to win two or more Grand Slams. Most commentators were discussing whether the Fed would win another slam.

Duh

The world would be a duller place without Homer Simpson. Perhaps the same could be said about Jeff [Homer] Tarango


Is the Two Pizza team the future for project management?

September 6, 2014

Amazon Web Services believes it has found the recipe for successful innovation in Two Pizza teams which it claims have launched nearly three hundred new services and features this year

A BBC article on innovation [September 2014] pointed to the fate of once-successful companies that had lost the innovation game to more dynamic and younger competitors. It cited Polaroid, Alta Vista, Kodak among the recent casualties.

The article went over ground that can be found in textbooks of innovation management: Innovate or die. One consultant was quoted as saying “Typically, big companies are much more conservative than start-ups and won’t do anything that is untested or could risk future profits”,  It then listed an approach advocated by Amazon Web Services:

Two Pizza teams

The challenge is to find ways of recreating the energy an dynamism of lean start-up operations within larger companies. Which is where Amazon’s Two Pizza teams come in: Perhaps it is online retailer and web services provider Amazon that best exemplifies lean start-up principles in action.
“Keeping teams small enough to be fed by two large pizzas, giving them autonomy and direct access to customers, encourages risk taking and innovation”, says Ian Massingham, technical evangelist for Amazon Web Services (AWS), the retailer’s cloud platform. “AWS has launched 280 new services and features this year – it’s all about making things better for our customers.”

Most commentators accept there is no one way for big companies to innovate, but they all agree that without innovation your days at the top could be numbered.

As simple as that?

Not really. The basic point has been around as lean thinking since the 1980s and a best-selling book of that name by Jim Womack and Dan Jones, founders of the Lean Enterprise Institute and the Lean Enterprise Academy. Lean thinking is a mix of practical advice for project managers with a philosophic (sometimes evangelical) background for overcoming the functionalism and silos of large organisations. The shift is exemplified in the shift from Fordist production lines to Toyota’s dynamic small teams.

Teams shall not live by Pizza alone

But teams shall not live by Pizzas alone. Amazon already had an innovation culture before the Two Pizza concept was announced. As Massingham said, encouraging risk-taking and innovation requires more distributed leadership, and autonomy to workers. Transformation requires more than a smart name.


Sinking of ‘Boris Island’ upsets Boris Johnson

September 4, 2014

Boris Island Nightmare

by Paul Hinks

Charismatic leader Boris Johnson, current Mayor of London, vented his anger and frustration at the announcement that plans for an island airport [Boris Island] in the Thames Estuary have been rejected

Boris has been a strong advocate of the ambitious proposal to build a new £100bn London airport in the River Thames Estuary – a proposal effectively dismissed by Sir Howard Davies who has headed-up a commission set up by the government to consider ways of expanding airport capacity:

“We are not persuaded that a very large airport in the Thames estuary is the right answer to London’s and the UK’s connectivity needs. “While we recognise the need for a hub airport, we believe this should be a part of an effective system of competing airports to meet the needs of a widely spread and diverse market like London’s. There are serious doubts about the delivery and operation of a very large hub airport in the estuary. he economic disruption would be huge and there are environmental hurdles which it may prove impossible, or very time-consuming to surmount”

Mary Creagh MP, Labour’s shadow transport secretary, saw an opportunity for a political handbagging: “This back-of-a-fag-packet scheme was designed less for the country’s economic future and more for the omnishambles mayor’s political ambitions.”

Limitations of charisma?

While Boris may have charisma in abundance – not everybody is completely mesmerized and following his lead. The Daily Mail reported that the Airline industry backed the announcement by Sir Howard Davies:

“Dale Keller, chief executive of the Board of Airline Representatives, said: ‘Airlines were never convinced that the Thames Estuary was either affordable or a convenient location for the majority of their customers.’Since airlines and their passengers will ultimately have to pay for the development costs of the selected expansion site then the business case must stack up in order for the UK to remain globally competitive. ‘We call upon Boris to support the important work of the Airports Commission and ensure that the right decisions are made about Heathrow and Gatwick.”

Cameron’s dilemma

The latest setback from Sir Howard Davies highlights how Johnson’s approach can leave him isolated:

“The Mayor ran this scheme up a flagpole in a very public way and very, very few people have saluted. So he has his point of view, but it is not widely shared.”

If David Cameron win the next general election, and Mr Johnson is successful in running as MP for Uxbridge, Boris has already indicated he will not accept the decision by the government’s airport commission, and instead will keep battling for it and will oppose the expansion of Heathrow or Gatwick as “unachievable” This may be seen as a great example of Boris’ tenacity and determination. Or an example of how Boris can create his own problems. The Telegraph offered another perspective:

Mr Johnson added his name to the list of prospective Tory candidates for Uxbridge and South Ruislip in 2015, just 48 hours before the deadline closed. However, the constituency in west London contains thousands of voters who work at Heathrow who would fiercely oppose Mr Johnson’s candidacy.

Mr Johnson believes Heathrow should be turned into a “tech city” so that the capital’s main airport can be moved out of the city and on to a floating island in the estuary. Local Conservatives, however, were delighted with Mr Johnson’s application.

Ray Puddifoot, the leader of Hillingdon Borough Council, told the Telegraph: “He rang me to say he has put his application in – ‘whacked it in’ were his exact words. He said he has affinity to the place and is looking look forward to the process.
“I think he would make an excellent MP. He is a major asset to the party nationally, he will have to prove he is an asset in the constituency.”

Future ‘Leaders We Deserve’ posts

As we move closer towards the next General Election we can expect to see and hear more of Boris and his opinions,LWD We will be updating this post, so subscribers should monitor future changes


Wanted: New Theory in Strategic Management

September 3, 2014

The Strategic Management Journal calls for new theory in Strategic Management and outlines areas of particular importance

The request is for submissions for a special issue of the SMJ [Deadline: November 1, 2014] by the distinguished editorial team of Jay Barney, Richard Burton, Donald. Hambrick, Richard Makadok, and Edward Zajac:

As Strategic Management has continued to evolve and grow as a field, its research base has become predominantly empirical. Quantitative and qualitative empirical studies, which typically include deductive or inductive hypotheses, have grown in absolute and relative terms when compared with purely theoretical Contributions.
Often these hypotheses are derived from theories that were developed some time ago. While we continue to make progress in refining our understanding of these theories’ one wonders if there aren’t important questions in the field that are not well covered by existing theories. A few of many possible examples include:
(1)Every major change in a firm’s strategy involves significant organizational change, yet we have very little theory about how to effectively manage such change;
(2)although we now know that many concepts and processes in strategy such as firm strategy, environmental “fit” involve highly complex interdependencies we have made little progress adapting complexity-based concepts to strategic theory;
(3)We have relatively little theory that applies to strategy questions in the public sector (including public policy); to non-market strategy, and to the broader social consequences of strategic decisions; and (4) fifty years after the publication of A Behavioral Theory of the Firm, and with a wealth of new psychological theories appearing in the interim, behavioral theories of strategy remain underdeveloped.

Additionally, citation evidence indicates that the most widely cited (and award-winning) articles in the Strategic Management Journal are disproportionately theory articles. This suggests a substantial need for such papers relative to their supply.

A historical strength of the Strategic Management field has been its intellectual openness to theories rooted in related disciplines. The field of Strategic Management addresses phenomena that typically do not fit neatly within single disciplinary theories, allowing opportunities for interdisciplinary theory development and additional advances in core theories emanating from within Strategic Management.

We seek theory papers that have the potential to significantly advance overall development
of the field of Strategic Management. These papers may present new theories; reconciliation, synthesis or extension of existing theories; or other important theoretical advances in existing areas, which include (but are not limited to) behavioral strategy,evolutionary theory, dynamic capabilities, upper echelons theory, the resource-based view, contracting theory, and theories of cooperation and competition at the firm, industry, and network levels.

We do not seek minor refinements. While highlighting the shortcomings of existing theories may be important for motivating or justifying the purpose and contribution of submitted papers, we are nevertheless interested in papers that make their own original and constructive contributions to theory, rather than in papers that merely critique existing literature.

We are open to papers that approach theory using conceptual models, formulation of hypotheses, computational models, and various kinds of mathematical models, or combinations of these.
While we encourage the use of illuminating examples and illustrations, submitted papers should not rely substantially on original empirical data.

Submissions are due by November 1, 2014 and must be submitted using the SMJ Submission
process

Authors should indicate that they would like submission to be considered for the special
issue on “New Theory in Strategic Management.” Authors of papers invited to be revised
and resubmitted will be expected to work within a tight timeframe to meet the special issue’s
publication deadline.


Putin’s rationality debated

September 1, 2014

By Jeff Schubert

John J. Mearsheimer has written an article, “Why the Ukraine Crisis Is the West’s Fault”, for “Foreign Affairs” magazine. I essentially agree, however, the article contains the following three quite important comments that I would take issue with:

(1) “In March, according to The New York Times, German Chancellor Angela Merkel implied that Putin was irrational, telling Obama that he was ‘in another world’. Although Putin no doubt has autocratic tendencies, no evidence supports the charge that he is mentally unbalanced. On the contrary: he is a first-class strategist who should be feared and respected by anyone challenging him on foreign policy.”
(2) “Russia is a declining power, and it will only get weaker with time.”
(3) “The United States will also someday need Russia’s help containing a rising China.”

Why are these comments questionable?

(1) Putin is  either “irrational / mentally unbalanced” or a “first-class strategist”?

Putin is not “mentally unbalanced”. However, he will be “irrational” to the extent that his decisions will often be adversely affected by his extended time in power, which will have affected his thinking and ensured that his lieutenants and advisers will lack genuine independent thought and/or be loath to disagree with him. And, then there is his reading habits. See my November 2011 article on “Putin’s dangerous reading”

 

If Putin were a “first-class strategist” (like, say Bismarck) he would have stopped after taking Crimea, and Russia would have gained more in terms of security than it lost in terms of a relatively temporary negative effect on the economy. But, by over-playing his hand (in an “irrational” way, in my view) Putin is doing significant direct and indirect (through the effect of sanctions) damage to the Russian economy. Putin’s great strength is taking advantage of the stupidity of others (be it the authorities in Kiev, or the US).

 

(2) “Russia is a declining power, and it will only get weaker with time.”

I keep reading this, although I suspect that very few people who put this view know much about the detailed workings of the Russian economy other than it is very commodity dependent and has significant demographic problems. However, in many ways the Russian economy now has many features similar to successful economies such as Australia (which also has a significant, although less, dependency on commodities). Having said this, there is much that could be improved in the medium term and very significant gains in Russian GDP per capita obtained. See my articles on Russian economic reform to get a professional view of the Russian economy

 

(3) “The United States will also someday need Russia’s help containing a rising China.”

This comment implies that the US will repeat its Russian “containment” mistakes when dealing with China. This, in my view, would be a an even bigger mistake.

About Jeff Schubert

Jeff has studied the motivation of leaders deeply. He writes regularly for Leaders we deserve. You can read more of his work on his blog site.


Follow

Get every new post delivered to your Inbox.

Join 1,603 other followers