One of the more irritating fashions among top business schools is to invite sports people, such as coaches and star players, to give talks on leadership. The idea is that business managers can learn how to perform better from those at the top of their game. However, the business-school profs have been getting it wrong because, in the case of soccer, the real lesson has been turned on its head. The winner-takes-all strategy of purchasing, promoting and pampering international soccer stars has finally failed and the troubled state of the beautiful game offers tough lessons for the boards of big companies.
Over Britain's May holiday weekend, a little known club from a dreary town in England's East Midlands became the winner of the Premier League, the world's most-watched soccer championship, worth £3.3-billion ($6.2-billion) in TV and sponsorship revenues. Leicester City supporters are still in hysterics over their victory. Bookmakers put the odds at 5,000 to 1 against the "Foxes", a provincial team with a "failed" manager, Claudio Ranieri (who was sacked as Chelsea's manager when the Russian tycoon Roman Abramovich bought the club) Leicester City had a tiny player budget, snatching the title from wealthy metropolitan clubs with global brands.
It's all about how big money didn't win and it's an object lesson to those who choose the men and women who run our biggest companies and decide how they should be paid. Over the past two decades, soccer has become more than anything a battle of wallets and the dreary predictability of the Premier League was beginning to provoke criticism. For almost two decades, a bookie would only need to adjust his odds between four wealthy teams: two based in Manchester, United and City, and two London teams, Chelsea and Arsenal.
Soccer had become a marketplace captured by a weird ideology which assumed that there was only so much talent in the world and the task of every club was to buy as many of the top players as you could afford. The more you pay, the more you win, was the strategy and soccer seems to be inspiring boardroom behaviour. Among the dull and subservient who populate non-executive boards, there is a firm belief that the only source of management talent is a self-appointed international elite who must be lured and retained with very large and expensive bait.
You only need to think of Barrick Gold, the Canadian miner where boardroom salaries seem to rise at a rate inversely proportional to the decline in its share price. The same principle seems to apply at BP, whose chief executive has just received a £14-million award for his service during a calamitous period for investors.
But Leicester City has exposed the folly of the mercantilist myth that the market for talent is finite and the equally pernicious belief that winning is about having star performers. The entire Leicester squad cost the club £57-million, a princely sum but dwarfed by the investment made by the elite four clubs which together paid £1.3-billion to acquire their players.
Still, the big spenders lost to the rank outsider and everyone wants to know whether this is a black swan event, not to be repeated for the next 20 years or is it a lesson in the cupidity of wealthy but unimaginative owners. Coach Claudio Ranieri is already cautioning fans and football pundits from drawing overoptimistic conclusions. "Big money makes big teams, and usually big teams win," he said.
Still, what he demonstrated is that is possible to assemble a winning team without buying the most expensive talent on the block and, more importantly, Leicester's performance reminds us that even a glamour-obsessed game, such as soccer, is at the end of the day, about teamwork.
Such lessons, even if short-lived, will be good for soccer and the Premier League. There is nothing fans love more than a victorious underdog and there may be a respite from the endless inflation in ticket prices. For investors in the wider business world, the problem is much greater and more insidious.
Arrogant, uncouth and occasionally brutish but glorious when winning, most soccer players have very brief careers. Rising fast and falling precipitously, they are as good as their last goal.
The same is not true of some CEOs, who seem to go on and on, segueing effortlessly from one mediocre performance to another, collecting bonus, stock-option and termination payments. Through our savings and pensions, we hire these men and women to look after our money. Yet, despite their generous wages and lifestyles, so many fail to deliver even a modest return. And it's a lot less difficult than winning the Premier League.