Cardiff City Football club and the dilemmas of leadership

December 21, 2013

Vincent TanAn earlier post outlined the story of Cardiff City Football Club and the dilemmas facing its new owners. Leaders We Deserve updates regularly as the manager is invited to resign or be dismissed.

LWD will keep a watching brief on the developing story since the original post

A summary of the interim happenings can be found in The Telegraph article which catalogues a series of battles between the Malaysian owners and their executives. CEO Vincent Tan has become a central figure in a battle to oust the much-respected manager Malky Mackay

December 20th 2013

News media in the UK all tell the story of a public announcement by billionaire owner Vincent Tan that Mackay must ‘resign or be sacked’. Tan is flying to England [Liverpool for the match, not Wales] to complete the arrangement one way or another.

December 21st 2013

Last gasp attempts to re-negotiate attempted. Tan to meet his chairman, Mehmet Dalman, who was expected to defend Mackay. Candidate for the next manager requires assurances about the contract and some level of control over playing matters which Mackay failed to achieve


Costa Rebrandia: A study in strategic leadership and governance

February 29, 2012

A luxury cruise liner hits the rocks with 32 fatalities. Within weeks, another ship from the same company suffers another serious incident, and is towed to safety. The company faces serious dilemmas of retaining credibility in the marketplace and of finding a way of dealing with its corporate reputation.

The leadership challenge

What would you do, as a member of the board of this hypothetical company?

Hints for students of leadership

A recent series of events prompted this post. A crisis calls for creative actions, be they to preserve the past, or initiate changes for the future. Study of firms who found ways of dealing with reputational threats might suggest parallels. The Perrier recovery from contamination of its brand has become a business school classic. Disgraced politicians and celebrities find ways back into public acceptance. Even the ostrich strategy (do nothing to attract attention) may have to be considered

Suggestions welcomed

LWD subscribers suggestions welcomed and will be added (after editing) to this post.

How a news story develops

The fatalities in the Costa Concordia accident ensured that attention would be turned to the parent company. Without that impetus, the story of a cruise ship being tuged to harbour would have hardly captured attention. By then jouurnlists have begun searches for other stories to add to the developing narrative. Here’s one claiming evidence of ‘sex and drugs on Concordia cruises’. Maybe that even has some positive rebranding opportunities. Perish the thought.


Wolves faced a leadership dilemma over Mick McCarthy: what might the board have done differently?

February 25, 2012

Terry Connor


One of the most difficult dilemmas facing a sporting business occurs if the board decides that a leadership change is necessary. Wolves FC serves as a case study.

The pressures on the board at Wolves FC mounted as the team struggled to escape relegation [Jan 2012]. Mick McCarthy as head coach bore the brunt of the anger from frustrated fans. The board decides to fire McCarthy. After some delay the chairman announces the appointment of Terry Connor, McCarthy’s assistant

The dilemma: terms of engagement

The difficulties facing the board must have been relatively easy to simplify into finding a decisive course of action to kick-start a reversal of fortunes. Firing McCarthy and bringing in a new chief coach would offer the prospects of radical change. On the other hand, firing McCarthy would leave the club with the possibility that any high-calibre manager would be in a strong position to negotiate advantageous terms.

Intended and unintended consequences

The intended consequences of firing McCarthy would be renewed support from the fans and players alike. The unintended consequences included the possibility that no deal could be brokered. Also, as McCarthy argued, he had several exceptional seasons at Wolves working with limited resources. His dismissal would have sent warning signals to prospective managers

The fall-back position

Under such circumstances, a board needs some holding position. Wolves first indicated their intention of finding an experienced replacement for McCarthy. It seems several such candidates were approached. Eventually the club announced an interim appointment. McCarthy’s deputy Terry Connor would be promoted with the possibility of a full-time contract, according to results.

Just like the appointment of Stuart Pearce by the FA?

There appear to be some similarities to the position facing the English FA recently [2012] as the contract with current manager Fabio Capello approaches its termination date. There has been media clamour for appointment of Tottenham’s Harry Redknapp. The FA decided to go for a holding position, appointing Steward Pearce as an interim manager.

When the two cases are compared, it is seem that the FA could (for once) be seen as avoiding a tricky premature decision. Redknapp has shown interest in taking a part-time appointment. And there is some evidence of longer-term planning. Pearce as youth team coach has been seen as being groomed as a possible future England manager. On the other hand, Connor’s interim appointment could have been made immediately as the unfortunate McCarthy was being relieved of his duties. It appeared to follow failed attempts by the board to attract an experienced manager to the club.

Leadership issues

The case raises interesting issues. There is the tricky question of promoting someone who was himself appointed by the manager that had just been fired. There is the issue of the ways in which a change can appear to have been mishandled. This is where students of leadership may find it useful to think themselves in the minds of the board and assess the likely dilemmas they faced.
An additional issue: The appointment of a black manager to Premier League football is surely worthy of comment. The press broadly avoided comment on the story. Which maybe itself is worth a little reflection..


Warnock fired, as Football’s naïve owners cling to outdated leadership beliefs

January 9, 2012

Another premiership manager is dismissed as football owners in the Premier League cling to outdated beliefs about the great man who will reverse the fortunes of their clubs

Neil Warnock was dismissed as manager of Premiership club Queens Park Rangers (QPR) yesterday [Sunday 8th of January] . The circumstances are all too familiar. Warnock is a controversial and outspoken character. He has a reputation of demanding the best from players often working with a limited budget. He is only eight years younger than Sir Alex Ferguson. Last year QPR gained promotion with him as their manager.

Events contributing to a sacking

Some of these events seem familiar for cases in which managers are removed from their positions in the premier league.

[1] A takeover after which the new owners take the opportunity to put ‘their’ man in charge
[2] The club does not perform to expectations in the ‘honeymoon period’ for the new owners
[3] A case of success elsewhere after a change of manager is noted by the new owners and the fans.

The Martin O Neill effect

All three factors are evident in the QPR case. Martin O Neill has hit the headlines after a great start at struggling Sunderland recently.

The Great Man Theory

The idea of a leader as hero/rescuer was popular a century ago, but has become increasingly challenged. In business, as in sport, the evidence for a reversal of fortune after introducing a dynamic new manager is contestable. There are other factors including the resources that are made available to the new leader to ‘make a difference’.

Fanciful expectations

Yes, a transformation in fortune will require effective leadership. The owners may well have found Warnock not the kind of manager they would have preferred for a fresh start. However, significant change will also require effective governance and expectations that are not too fanciful. And a Martin O Neill or a Kenny Dalglish is hard to find, and harder to attract without special personal reasons for accepting the challenge.


Martin Johnson resigns. Another example of weak sporting governance?

November 17, 2011

Martin Johnson resigned as a scapegoat for England’s recent World Cup performances both on and off the field. But the Governance of the English Rugby Union leaves much to be desired

It is partly the culture within Rugby Union that appointments are made with more attention paid to heroic on-field exploits than to any job description of a manager or head coach. This partly explains the appointment of the Captain of England’s only successful World Cup campaign

At the time of his arrival as head coach, [April 2008] the English Press were largely enthusiastic about the appointment. The main criticism was that the incumbent, Brian Ashton, had been fired in unseemly haste to pave the way for Johnson.

An ill-judged appointment?

In a LWD post I was less convinced, noting that the appointment might be ill-judged. Johnson had no coaching experience, a fact glossed over in the reports of his appointment.

Charisma

Martin Johnson was believed to bring the charisma and leadership on the field to a completely different type of leadership job as England manager.
Distributed leadership.

The Board wanted Clive Woodward back

It became clear that the Rugby authorities recognised the need for distributed leadership, hankering after Johnson’s own World Cup manager Clive Woodward. However, Woodwood had never been able to negotiate adequate powers to make he post a success, and remains a leader in waiting.

Rob Andrews

The chief executive role is held by Rob Andrews. Johnson departed with considerable dignity. Sharing a platform when Johnson announced his retirement, Andrews rejected enquiries whether he too should resign. Johnson departed with considerable dignity. Andrews has come under criticism for his role and his unwillingness to accept personal responsibility for shortcomings.


Why did Mike Ashley sack Chris Hughton?

December 11, 2010

Some leadership stories are simpler than others. The departure of the Newcastle United manager this week seems sad but relatively uncomplicated to explain. But there may be possibilities beyond the most widely-accepted explanation

There has been wider-than-usual condemnation of the abrupt removal of Chris Hughton from his post as manager of Newcastle and his replacement with Alan Pardue. The consensus was high among footballers, pundits, fans, and fellow managers.

The popular story runs as follows

[1] The owner Mike Ashley has ‘previous form’ for ill-judged and hasty decisions in hiring and firing managers.
[2] This dismissal follows a pattern.
[3] It is ill-judged this time because Hughton had done an admirable job in the rescue of the club from relegation from the Premier league (a decline itself widely attributed in part to its dubious governance under Mr Ashley).
[4] The revival this season in the Premiership was better than expected even by fans. A relatively brief run of poor results recently has still left the club close to the middle of the Premiership table.
[5] Chris Hughton is widely admired as a capable manager.
[6] Claims that his replacement, Alan Pardue, will bring an experience which would strengthen NUFC’s future are unconvincing.

Chorus of disapproval

Among this chorus of disapproval, one voice offered some justification for the owner’s decision The Guardian suggested that:

Maybe, just maybe, Ashley will get this one right. Hughton was popular with the players but not so popular, apparently, that the team felt like breaking sweat at West Bromwich Albion last weekend, when Newcastle did not so much have an off day as a day off. A manager should never be one of the boys because boys occasionally play truant. Newcastle’s record since Hughton brought them back to the Premier League has been surprisingly good…yet impressive performances against Aston Villa, Sunderland, Arsenal and Chelsea have been offset by losing at home to Blackpool, Stoke and Blackburn. It seems that under Hughton, Newcastle were up for some fixtures but not others, a bit like Middlesbrough under Gareth Southgate. Christmas departures are sad but not necessarily bad.

The Guardian analysis differs from the widely espoused view that Newcastle are cursed with a particularly stupid Chairman who fails to see what is obvious to almost everyone with an opinion on the matter.

Other possibilities

There are other possibilities. Mr Ashley has in the past revealed an emotionality in his leadership style. His actions may have repeatedly influenced by irrational feelings of frustration and a failure to win the approval of the Newcastle faithful.

Or maybe, and I find this rather convincing, the owner is an entrepreneur who was successful in earlier business dealings. He may well be pursuing an entrepreneurial strategy for preparing the club for his exit at as good a price as he can obtain. In which case, the sacking may not necessarily be bad for Mr Ashley. As for Newcastle Football Club? New ownership may also ‘may not necessarily be bad’ for the club.

“If you always do…”

The team turned in one of their best performances of the season a few day’s after Pardue’e appointment [Saturday 11th December]. A new dawn? More systems-oriented fans may feel that “If you always do what you’ve always done, you’ll always get what you always got.”


BA’s Martin Broughton battles against US security practices

October 27, 2010

Last week Martin Broughton as chairman of Liverpool FC came to public awareness in the club’s battle against its American owners. This week as chairman of British Airways he springs into action against the practices of the US Transport Security Administration

The BBC reported his speech [October 27th 2010] to the UK Airport Operators’ Association annual conference. Mr Broughton argued that:

Some “completely redundant” airport security checks should be scrapped and the UK should stop “kowtowing” to US security demands. Practices such as forcing passengers to take off their shoes should be abandoned, and he questioned why laptop computers needed to be screened separately. He also criticised the US for imposing increased checks on US-bound flights but not on its own domestic services. The US stepped up security in January in the wake of an alleged bomb plot. “We should say, ‘we’ll only do things which we consider to be essential and that you Americans also consider essential’.”

A spokesperson for The US’s Transport Security Administration said it worked closely with its international partners to ensure the best possible security and that they “..constantly review and evolve our security measures based on the latest intelligence.”


Liverpool up for sale – but who owns the club?

October 12, 2010

Liverpool football club is up for sale. But the dramatic story has an unusual twist to it. Who actually owns the club?

The developing story moves today [September 12th 2010] to the High Court for a partial answer. The putative owners, Tom Hicks and George Gillett, [H&G as we will designate them in this post] are in dispute with their own legally instituted board.

American sports entrepreneurs H& G bought the club in March 2007, in a deal which results in debts to the Royal Bank of Scotland of £240m. H&G are blocking the proposed sale of the club to New England Sports Ventures (NESV) for some £300m. A Board of Directors has responsibility to its shareholders, which usually means in practice that the will of the shareholding owners prevails. Which makes this a very interesting business case.

So what’s the problem?

Well, the usual principles become more complicated if the club is massively in debt. Liverpool is massively in debt to its bankers. Repayments of its loan are due this week. The club will have trouble repaying the loan. So it does not take too great a leap of imagination to suggest that in one sense the bank ‘owns’ the club. Not ‘owns’ legally, but at very least owns the right to exert influence. With or without any major shareholding.

The bank’s influence

The influence of the bank was shown in the terms of its financial dealing last year when it demanded (and got) the appointment of a ‘neutral’ chairman and a board structure which removed absolute power from the owners The need for such financing illustrated the weakness of the H&G position (comparable in principle the arrangements surrounding the Glazer takeover of Liverpool’s deadly rivals in debt, Manchester United.

Opportunities for a sale

The circumstances were ripe for a takeover. But the ripeness also permitted opportunities for further entrepreneurial actions, timed to take advantage of the uncertainties. The board indicated willingness to accept one of the offers, by New England Sports Ventures (NESV). The owners attempted a few weeks ago [September 2010) to sack the members of its ‘own’ board. consisting of the ‘neutral’ clairman Broughton, managing director Christian Purslow and commercial director Ian Ayre who had gone against the wishes of their American owners.

Confusion reigns

On the brink of the court hearing, and the deadline for repaying the bank loan, confusion reigns. The possibility the FA deducting points from Liverpool’s league tally has appeared to be a possible deal-breaker for NESV. There is even a second would-be buyer, Peter Lim, claiming he had been unfairly discounted by the board.

What has become clear is that the question “…but who actually owns Liverpool Football Club?” is not a straightforward one to answer. Also clear is that the Football Association’s ‘Fit and Proper Person’ criterion for club ownership will have another urgent test of its credibility in the months ahead.

A more interesting question for students of leadership: what advice would you offer the Football Association through lessons learned from the case of the board which rebelled against the owners of the organization?

And stop press

Sporting Intelligence reports high court ruling in favour of RBS and Liverpool


Does the F.A. still have a Fit and Proper Person Dilemma?

October 2, 2010


As long ago as 2005, the Football Association developed a Fit and Proper Person test to ensure the effective governance of the clubs in its charge. Developments since then suggest that even at the highest reaches of the Premier League, the issue remains a dilemma

Tudor Rickards & Leigh Wharton

A glance at the top of the English Premiership [September 25th, 2010] suggests that the FA still has to deal with governance issues five years after the development of the Fit and Proper Person Test (FPPT). At the time of writing, the most recent troubles have included salacious stories of England playing stars. A range of Premier League clubs face embittered fans over takeovers which they consider to have involved include individuals who may have passed the FPPT, but whose business models are seen as contrary to the interests of the fans, and arguably to the well-being of the clubs.

The highest profile clubs include Manchester United (fans at loggerheads with its American owners). Liverpool FC (ditto). Manchester City was rocked in 2008 by the drama of the exiled political figure Thaksin Shinawatra before being swallowed up by allegedly one of the wealthiest of backers from Abu Dhabi. Arsenal appears to have gained some financial security but faces the distinct possibility of another disruptive takeover. Chelsea seems to have stablised through on-field success leading club after too many changes of manager under its billionaire Russian owner.

The original initiative was reported in The Independent:

The Finance Advisory Committee, chaired by the economist Kate Barker, is pledging to introduce the test for next summer’s FA AGM. The reform has long been urged on the FA by supporters’ groups, who have been bemused by the way in which crooks and bankrupts are allowed to take over the nation’s football clubs, with no questions asked.

The “fit and proper person test” will be only part of the work that the new committee will be expected to lead and oversee, which will include trying to encourage a more responsible approach to clubs’ financial management.
“This is a very important development in an overall approach by the FA,” promised Nic Coward, the FA’s director of corporate and legal affairs.

Barker, a member of the Monetary Policy Committee of the Bank of England, will be able to appoint other independent members, to join on the committee the representatives of leagues from the Premier to the Isthmian, together with Coward and the FA’s new chief executive, the former insolvency accountant Mark Palios.

Some work has already been done, by the FA’s Financial Advisory Unit and by Matthew Holt, of Birkbeck College’s Football Governance Research Centre. [Later to become a a leading sports administrator.] The test is likely to apply to directors, not to shareholders, because of the legal difficulty of regulating who can own shares in a football club. It is likely the FA committee will recommend that so-called “shadow directors” be vetted, too, but it is notoriously difficult to prove that somebody is acting as a director if they are not officially on the board.

Governance Issues since 2005

Since 2005 the Football Association has itself struggled with a whole range of governance issues. Football fans and pundits alike have considered the FA itself to be in disarray after a series of crises of governance involving its own directors, employees, the football clubs, the England National team, and media scandals.

Students of business leadership and governance will find much to evaluate in assessing the dilemmas facing the clubs and the FA into the forseeable future.

Note:

Matthew Holt, the consultant to the 2005 FPPT initiative subsequently propered a comprehensive document on the topic. In it he reviews the wider complicated issues of governance facing the FA.


Mark Hughes, Leadership and Governance

December 21, 2009

Mark Hughes’ dismissal as Manchester City Football Club coach appears to have come as a shock to him. The manner of his dismissal offers a case example of leadership and governance issues

This story can be treated as a local level but also one with a global dimension. It has much to do with sport, while at the same time has to do with wider international issues of globalization, and governance of global organizations.

The local story is of a venerable Premier league football team in Manchester England, with its tribal fan base of loyal supporters. Over the years ‘City’ has enjoyed periods of success, which have provided comfort in longer periods of relative lack of it, made worse by the increasing success and wealth of its neighbour, Manchester United.

The Club began to change managers with increasing speed. Heroes from their playing days at the club came and went. Outsiders also came and went, sometimes by mutual consent. Mark Hughes was one such outsider, following the charismatic but ephemeral leadership of Kevin Keegan and Sven Goran Ericsson.

Hughes was considered a promising if inexperienced manager, who had been successful with limited resources at Blackburn and before that as national coach for Wales. His status as a much-loved player at rivals MUFC was only an initial talking point, and he began to earn the respect of the fans after his arrival in 2008.

The takeover

Then an event took place which plucked City out of the also-rans of the Premier league. It was taken over by a Middle-Eastern consortium promising to back the club with unrivalled wealth. The fans, if not the incumbent manager, rejoiced. Hughes went on a spending spree to fufill the ambtions of the new owners.


A Chelsea Rerun?

The story was seized upon as a rerun of the take over of Chelsea, by multi-billionaire Roman Abramovitch. Like City, Chelsea was a club rich in tradition but lightweight in financial backing. Chelsea made it clear that the takeover was to lead to it becoming a super-club which would compete with the world’s glamour elite, Real Madrid, Inter Milan, Barcelona, and of course Manchester United. The outcome for Chelsea has been spectacular improvements in performance at national and European levels. Another outcome has been a managerial roller-coaster including the arrival and departure of the self-styled ‘ Special One’ Jose Mourinho as head coach.

But the City story differed in several respects. Mr Abramovitch is an extremely hands-on owner and football enthusiast. City’s new masters were cooler, more distant. Their regard for City as a symbol of prestige was less blatent. And they signalled intentions to leave their young manager in place.

The Drama unfolds at City

The drama unfolded. Hughes spent big, but failed to attract the very best footballers in the world. In hindsight, Chelsea’s wealth had succeeded more in acquiring an entire squad of strong international figures, rather than super-stars. And Chelsea had a stronger base of such figures to build around in the first place.

Hughes began his first season with an agreed target of success including win/loss figures understandable to any sales director of a retail consortium. The team continued to improve, but a run of drawn games was producing speculation of how long Hughes had at the club. This week in spectacular fashion the answer was revealed.

The Succession Plan

In the manner of big commercial interests, the owners of MUFC had a contingency plan which was being put in place. According to Hughes, while his team were slightly off their agreed points target, its owners had covertly reached an understanding with another manager. Shortly before or after Saturday’s thrilling 4-3 win, [December 19th 2009] Hughes learned his fate. His successor Roberto Mancini was said to be in the crowd.

Disgraceful, unethical, or what?

I have written quite a lot about Mark Hughes in LWD. Recently he seemed to have been under strain in public. Mostly, however, he confirmed a view that his leadership style was non-charismatic but that of a so-called fifth-level leader, of ‘quiet but fierce resolve’.

His statement shortly after his dismissal noted

“Notwithstanding media coverage to the contrary, I was given no forewarning as to the club’s decision … At the beginning of the season, I sat down with the owners and it was agreed that a realistic target for the season would be sixth place in the Premier League, or in the region of 70 points.”

The general view expressed in the media was that The City Board had been hasty and even unethical in their treatment of Hughes. They had not even secured a ‘Special one’ although a highly promising young figure. I leave the matter open for comment.