Thursday, July 15, 2010

What do sport and business have in common? Here's an example

The England football story

(cause and effect, foundations of failure, fundamental strategy, structure, planning and philosophy, strategic analysis)

When a business fails or struggles in some other way people commonly look for recent tactical or incidental causes, but the roots of failure are usually far deeper in foundational strategies, structures and philosophies.

The poor performance of the England football team at the FIFA 2010 World Cup offers an example of a venture inflicted with fundamental problems, and therefore likely to fail.

Here are some indicators (as at FIFA World Cup 2010) of foundational weakness and vulnerability in the basic organization and ethos of the England national football effort. Think of it like a business. Success is difficult when foundations are flaky and misaligned. With a little imagination it is easy to relate these lessons/examples to the business world.

The English Premiership (England's top domestic league and effectively the pool from which the national team is selected) is dominated by clubs which are:

· Mostly owned, and the teams managed/coached, by people/companies from outside of the UK, who have little interest in the success of the England national team, and in many cases have very strong national football loyalties overseas. Do the owners of the business understand the business – still ?

· Mostly staffed by players from outside of England (two-thirds are from overseas), which restricts the pool of available English national talent, and also the opportunities for English home-grown talent to develop and become experienced. Is the balance of contractor to employee correct?

· Clubs are very strongly profit-driven, and are so debt-ridden as to be effectively bankrupt. Does your business have the correct commercial focus?

· As a consequence of these commercial pressures, players are forced to play too many games in a season (generally far more than their international counterparts), without break, and so that when the World Cup happens it is during the period of the year when players would normally be resting and recovering. Are your operations resourced correctly? Do you have a multi stage redundancy plan ?

The leadership of the Football Association, guardian of England's national game, has for some years been chaotic and disjointed, indicators being:

· Recent resignations of Chief Executive and Chairman.

· Regular scandals and infighting.

· Lack of control over domestic game and clubs.

Other 'foundations of failure' indicators:

· England has approximately 10% of the number of FIFA qualified coaches compared to European countries like Spain, Germany, Italy, and France (about 2,700 compared to about 20,000 or 30,000 in these other countries). Investment in resources and training is money well spent.

· The coach of the national team does not have English as a first language. It is not ideal to have coach who cannot communicate effectively and therefore not be able to motivate his team. Also due to the coach being there purely for commercial reasons, can the public expect him to go the extra mile to obtain the desired results? Do you have the right people doing the job?

· The coach is paid £5 million (or £6m, depending on interpretation) per year, regardless of performance; moreover failure and early departure is effectively rewarded because of a contracted fixed two-year term termination payment (although the effect of this is probably to maintain a failed situation - because the cost of change is prohibitive). Is monetary incentive the only motivator in your business?

· England players are paid around £100,000 per week; for doing another job (playing for their clubs). Failure at national level may be slightly upsetting for a day or two, but it holds no commercial consequence.

· At least one England squad member had to be asked by the coach to make himself available for his country. Another could not be persuaded. National representation is a peak sporting achievement. It's worrying when candidates reject this notion, and just as worrying when such candidates are pursued and recruited. Do your employees have a balanced outlook? Or is it “just a job”?

· Culturally the integrity and ethos of football - especially what it means to be a footballer - has been lost to the corporate world. The focus (of the role-models and therefore the kids) is no longer on ball skills and being the best - it's on the brands, the replica shirts, the day-glo boots and the millionaire celebrity lifestyles. Not much works well when hype dominates substance.

A national football team is in many ways like a business. It needs solid strategic and philosophical foundations. Misalignment at a basic level eventually produces problems at the level of tactical or operational implementation. Like a national football team, if a business fails at a tactical or operational level, the causes - and therefore the solutions - are generally much deeper than they seem.

SWOT

PEST

Porter's Five Forces model,

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