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26 April 2014

Succession Planning

Tag(s): Business, Sport
Tucked away this week, you may have missed it, was the news of David Moyes' departure from Manchester United. I was neither shocked nor surprised. What surprised me was that it had taken so long. It is almost a year since Sir Alex Ferguson announced his retirement (See my blog The End of Fergie Time 11th May 2013 tags Sport, People). In that blog I wrote:

“And so we come to his succession. He is clearly irreplaceable but has to be replaced. The club has gone for David Moyes, another Glaswegian Scot who has done well at Everton with limited resources. I suspect that Ferguson himself has been strongly influential in this decision seeing in Moyes some or hopefully all of the qualities I have described. It remains to be seen how successful he will be but even the most rabid of United fans would do well to be patient. After all Ferguson himself won nothing in his first four years at the club.”

But Moyes has tested loyal fans like me from the beginning. He began by making two fatal mistakes. First he cleared out all Ferguson’s backroom men bringing in his own crew from Everton. This ensured that there would be little continuity. He changed the training methods and took training himself apparently making it boring and pointless instead of the incisive training that Ferguson’s lieutenants used to run. Next, despite the fact that Old Trafford staff had teed up two high level transfers Moyes abandoned those, set off in pursuit of high profile players like Cesc Fàbregas despite a lack of planning and finally, on the last day of the summer window, he paid £27 million for Marouane Fellaini, one of his Everton players, who was as much a Manchester United player as Ed Balls would have been. Fellaini was Everton’s top scorer last season with 12 but has failed to score this season. Moyes once described him as “the best midfield player in the top flight.”

Once the season started Moyes was immediately in trouble. He complained about the fixture list. After a bad but not unexpected defeat to Manchester City he said things would turn round. Instead they lost at home to West Bromwich Albion for the first time in decades. Such defeats became a regular feature and several teams that had not won at Old Trafford for many years put that right this season. At Everton Moyes had always been intimidated by the top teams. He remained so this season and in the twelve matches against the six teams currently above United in the table he lost ten only beating Arsenal. Their main local rivals, Liverpool, Everton and Manchester City, all did the double over United this season, something that has never happened before.

He often said that a major turn round was required and this would take time. But he showed no sign of knowing what that turn round entailed. In 51 matches he picked 51 different teams. His tactics varied wildly if they were discernible at all. His teams were cautious, even pedantic and showed nothing of the fire that Ferguson had instilled in them. It is important to remember that apart from one or two changes these were the same players who had won the Premiership by 11 points in Ferguson’s last season. As a last word on Moyes he had for years wanted Everton to finish above Manchester United in the premiership and he finally achieved it.

So why did it take the Glazers so long to sack him? And was it for football or commercial reasons?

On the first point it would seem that Moyes had a six-year contract, but there was a clause that would allow his termination with just one year’s severance pay if he failed to gain qualification for the Champion’s League. It was only after the defeat by Everton on Easter Sunday that qualification became mathematically impossible. It had been most unlikely for months and a truly weird set of results would have been required but it was mathematically possible until this week. And so, by not sacking Moyes back in December when it was clear what was wrong they saved some money, but it would have given them much more time to find a suitable successor and give him time to rebuild the squad as is certainly needed. He might have won something. Something of the sort happened at Chelsea two years ago when Roman Abramovich sacked André Villas-Boas and put former player Roberto Di Matteo in temporary charge in March 2012. Two months later Di Matteo’s team won the Champions’ League.

To the second point it was both. The Glazers took over Manchester United in 2005. They loaded the club with debt and have proceeded to take out hundreds of millions in dividends and interest on bonds ever since. (See my blog The Green and the Gold 20th March 2010 tag Sport). The money available to buy top players has been limited. Meanwhile Abramovich at Chelsea and the Arabs at Manchester City have poured in hundreds of millions. Only the genius of Ferguson has kept Manchester United in the game, winning five more Premier League Championships in seven years and another Champions League. I think the Glazers came to rely on Ferguson to the point that when it came to his replacement they relied on his sole judgement to pick his successor. It’s worth reading what the Manchester United Supporters’ Trust have to say on this.[i]

And so to my real theme this week of succession planning. Because how can it be possible in such a sophisticated organisation, now quoted on the New York Stock Exchange with a valuation of  $3,165 M (£2,018 M), second only to Real Madrid among all football teams worldwide, to treat the succession to the most successful football manager of all time in such a cavalier manner?  When listing on the NYSE the club implied that regular participation in the lucrative Champions’ League was a given as indeed it had been for 20 years. As an indication of how much has changed in the Ferguson era let me remind you that in 1989, when Ferguson had been in charge for just three years and not yet won anything, the club chairman, Martin Edwards, was willing to sell the club to businessman Michael Knighton for £10 million but Knighton could not raise the funds.

The succession to Sir Alex was never going to be easy but all the more important, therefore, to have a proper plan in place. Sir Alex had planned to retire before. Back in December 2001 the team were performing badly. Ferguson had made some poor moves in the transfer market breaking his record transfer fee to buy Sebastian Veron and selling the excellent centre half Jaap Stam. United were in ninth place. Alex told club director Maurice Watkins he would retire. His wife, Cathy, said she didn’t want him moping about the house, (I know the feeling) and that he was too young anyway. He told Watkins he’d changed his mind and the team responded by winning 13 out of their last fifteen matches to finish third behind Arsenal and Liverpool.

At that time the United board should have said, “Yes, we’ll have you back. But we need to see you groom your successor. And we need to decide as a Board of Directors when it is time for you to go with an approved person ready to take over.”

Ironically Liverpool set the standard in their glory days. The club had been relegated to the second division in 1954 and lost to non-league Worcester City in the 1958-9 FA Cup. Soon after Bill Shankly was appointed manager. Upon his arrival he released 24 players and converted a boot storage room at Anfield into a room where the coaches could discuss strategy; here Shankly and other “Boot Room” members Joe Fagan, Reuben Bennett and Bob Paisley began reshaping the tam. The club was promoted back into the First Division in 1962 and won it in 1964. In 1965 the club won its first FA Cup. In 1966 they again won the League but lost to Borussia Dortmund in the European Cup Winners Cup final. It won both the League and he UEFA Cup in 1973 and the FA Cup again in 1974. Soon after Shankly retired and was replaced by his assistant Bob Paisley. In 1976 Paisley’s second season as manager, the club won another League title and won the European Cup for the first time. In Paisley’s nine seasons as manager Liverpool won 21 trophies, including three European Cups, a UEFA Cup, six League titles and three consecutive League Cups.

Paisley retired in 1983 and was replaced by his assistant Joe Fagan. Liverpool won the League, League Cup and European Cup in Fagan’s first season. This remarkable run was only brought to an end with the tragedy of Heysel although Fagan had already announced his retirement and Kenny Dalgliesh appointed as player-manager. Although now banned from Europe for ten years, Liverpool won another three League Championships and two FA Cups under Dalgliesh.

This virtual dynastic succession lasted for almost three decades with each manager apparently building on the successes of his predecessor. The way of playing largely stayed the same and after that initial clear out of players by Shankly subsequent changes were steady. Marquee signings like Kevin Keegan, Kenny Dalgliesh and John Barnes were made but just as importantly new players, brought up through the ranks, were bloodied each season. Shankly had set the style and the culture but he had trained a team of coaches to instil them in the club with him.

And, even more ironically, after this period was over Liverpool became like every other club looking for the reincarnation of Shankly but in fact just hiring and firing a succession of managers who might win the occasional knock out trophy but could not hold it together for a whole season to win the League. But then they appointed a young relatively untested manager from Northern Ireland who looks like he’s going to do it for them. And so I believe in Succession Planning, and I have tried to do it everywhere I have been in business, but occasionally in football, it has to be said, someone can emerge from nowhere to prove everyone wrong. Could Ryan Giggs do the same?

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