The recent Premier League match between Chelsea and the Wolves kicked off with the PA system playing Queens’ well-known song, “Another one bites the dust…” This music was fitting as yet another football coach has been fired, raising questions of how long is long enough? How long should a leader have to show their worth before getting sacked for poor performance?
The recent dismissal of Chelsea Manager, Frank Lampard, ended in controversy. Was it the right thing to do? Was it the right time? In this article, we investigate the matter and take some key learnings from the sporting arena - this time the ruthless world of football – to the boardroom.
In the previous football season, Lampard won 17 consecutive matches and led the blues to a fourth-place Champions-League finish. He achieved this despite being severely hamstrung by a FIFA-imposed transfer ban, which meant relying on young and relatively inexperienced players.
When the transfer ban lapsed, he was given a massive budget to find the best players in the world. From there, Lampard’s performance as Manager of Chelsea was measured against one criterion, his ability to win. No patience, long-term strategy, project or plans – just get the best resources and deliver. And so, he started off winning the first game of the season and losing the second. He then won another nine matches before losing his second match, with a total of six losses in 20 matches.
Despite what is arguably a good record, Lampard was sacked. However, Chelsea’s performance was lagging long-before Lampard took charge of the Club.
Chelsea has not threatened any of the major titles in recent years. Their last three Premier League titles were in 2010, 2015 and 2017 and their only Champions League title came in 2012. Recently, Chelsea lost five out of their last eight games. Let’s be honest, this is not a Chelsea-only problem. This is a phenomenon across the Premier football teams. When Coaches and Managers get recruited the only thing they are certain of is that they will get the boot. The question is when. But is this fair and, more importantly, is this sustainable?
What has this got to do with business?
Let’s draw the comparison through to the business world. And let’s not be naïve and pretend it doesn’t happen out in the corporate jungle.
When fourth-quarter earnings were below expectations Groupon CEO, Andre Mason, was fired through an internal memo. Sure, the company’s share price declined 77% with a net loss of $81m in the previous quarter. But no other performance measures were given to explain his dismissal.
Deutsche Bank’s Anshu Jain (CEO) and Jurgen Fitchen (co-CEO) did not deliver on performance, so thank you and goodbye.
Jonathan Hart, CEO of Thornton, issued a profit-warning in December that resulted in a 22% fall in the share price. This was during a time of immense pressure in the retail industry. But he had his chance and blew it. He exited in May of the following year.
CEO Dalton Phillips from supermarket group, Morrisons, could not keep up with rivals like Tesco and Sainsbury’s and showed slumping profits. Thank you and goodbye.
There are many more examples of this in the corporate world. However, amid all this turmoil and controversy, something interesting stands out: unlike in football, in many cases, CEOs feel the pressure and step down voluntarily. In football, you get sacked after just a few occasions of non-performance.
Whether it’s on the football field or in the boardroom, no one denies that the right CEO, Manager or Coach should be behind the steering wheel. Stock markets move as leadership in companies move. When Japanese-camera maker Olympus fired their CEO, the stock fell. When Air-France-KLM fired their CEO, the stock went up. We see the same thing in sport. When new owners FSG took over Liverpool, the value of the club increased massively, enabling one of the biggest ever sponsorship deals with Nike to be signed.
The question is, how can it be done so easily and who takes accountability? Surely someone appointed this Coach or CEO. Where are the shareholders or Board members when these decisions are taken? No one appoints themselves. And through all of this, the question remains: how is success measured? Is ultimate performance the only indicator? Is short-term success the only measure?
Too often, CEOs are fired because investors and shareholders put pressure on Boards…not because they have carefully considered and concluded that all performance measures were not met. Most Board members would be unable to lead the company more effectively than the CEO yet they are quick to satisfy supporters and investors by offering up the CEO’s head on a plate. This is a short-term solution to a more complex and long-term challenge.
So what should we be looking at?
We have to investigate another football team to get some perspective: Liverpool.
When Liverpool’s current Coach and Manager, Jurgen Klopp, was appointed it was clear that on-field performance was and remains the ultimate measure of success. And Liverpool has had a few exceptional seasons. But at first, they struggled, turned in some poor performances and were beaten.
So what was different and why wasn’t Klopp sacked?
In short, he was given the time, budget and patience. He invested in younger, less expensive players and had time to build the team’s identity. He instilled a non-negotiable philosophy and values in the club and players. Longevity and sustainable long-term results were his real measure.
In essence, there shouldn’t be a timeframe for when a CEO or Coach should be fired. Rather a proper measurement and performance system should be put in place by the Board and shareholders that consider the operating environment and the challenges and opportunities at play. This system needs to be calibrated quarterly and all internal and external factors considered.
So, before you seemingly appoint the “best” coach or CEO, consider the following:
Fit for purpose – is it the right person for the right time? No one is perfect and certain times ask for certain leadership. Find the right “package” for the current state of affairs – and make sure the fit for the current state is correct.
How do the values and culture of the team or company stack up against the individual? It doesn’t matter how good a CEO or Coach you are, certain companies and teams are not well suited. The core values and culture of the club or company should always override and be prioritised above a CEO or Coach.
The people – who are your employees, players and spectators? A CEO or Coach is a servant to the people. It must be a match. All successful teams and companies have one thing in common: their people or players are happy and thrive under the leadership. They follow and support the direction of the CEO. They will deliver… because of the right leadership, but also because they can identify with and believe in the vision.
The ruthless world of the corporate jungle will not change, will not get easier and will not get more forgiving. The song “Another one bites the dust” will be played more often in the future than before and performance will remain the ultimate measure. But let’s make sure that a fair opportunity is given to perform, a fair performance system is in place, and fair expectations were set. Ultimately, let’s ensure long-term sustainable measures are in place to determine success and let’s make sure we consider our moral fibre in these decisions.