This weekend in the English Midlands, Leicester City Football Club will celebrate the most unlikely of sporting victories, having gone from 5000-to-1 outsiders to winning of one of the toughest—and richest—competitions on the planet, the English Premier League.
This is unlikely to make much difference to pension funds—unless you invested a significant sum on that bet back in August. Just think of the impact that would have on your deficit!
But a study by Organizational Maturity Services (OMS) published this week claimed many Premier League teams could give lessons to other industries on talent development, business culture, risk management, and gender equality.
“With so much money at stake, clubs can no longer afford to take unnecessary risks; they have to adopt more accurate methods for predicting and planning the future with greater confidence,” OMS wrote.
A similar sentiment could have been found in almost any pension fund’s annual report.
OMS analyzed each of the 20 clubs in the Premier League to assess their business cultures and treatment of employees (not just players and coaches).
“It is evident that a number of clubs increasingly understand that competitive advantages arise from long-term talent building and internal development systems, evidence-based recruitment and analysis, and the array of performance management tools and approaches that support sustained success,” OMS said.
Long-term thinking, good recruitment, quantitative analysis, performance management tools—it’s still sounding like an investment institution.
Just as Leicester City upset the league’s big hitters this season—Manchester United, Chelsea, Arsenal, and Manchester City spent much more money to lose—another lesser-known club is leading the pack for the best-run business.
Southampton, based on the south coast of England and currently sitting in a comfortable seventh position with two games to play of the season, was OMS’ “exemplar.” As an organization, OMS said Southampton “organizes itself as a coherent and cohesive whole human system that aligns people and practices to its purpose and values.”
In addition, all employees are “viewed as a source of value, not just as a cost,” OMS said, and new hires are always aligned with the club’s “values and systems.”
Despite its praise for Southampton, OMS highlighted that “there is a general lack of coherence between organizational purpose, strategy, and management practice” at most Premier League clubs.
“For example, clubs [that] have failed to ensure living wages are paid to their own staff or outsourced contractors send a signal that only certain people are valued,” OMS said. “This undermines the potential contribution of wider human capital and tarnishes a club’s reputation in the eyes of key stakeholders.”
OMS gave a list of flawed thinking at football clubs that was redolent of investment management:
- Succession planning: Manchester United’s failure to plan properly for the departure of Alex Ferguson, who managed the club for 27 years, “undermined football success since and consequently impinges on its ability to maximize financial returns.”
- Gender equality: Women’s football has grown massively in popularity in the UK in the past four years, but clubs have not exploited what OMS described as “a very obvious and straightforward opportunity for both financial and societal value currently being missed.”
- Talent development: Many clubs have youth academies, but few players make the leap from this level to appearing for the first team. “Most academies churn through young talent without a clear strategy or pathway for players,” OMS said. Unless this is addressed “clubs will continue to lose significant value” and be forced to hire in expensive talent externally.
“Premier League clubs are ill-equipped to assess and manage significant risks that arise from their own human capital,” OMS concluded. “From on-field player misconduct to wider reputational issues arising from myriad sources, there is much work to do to avoid materially detrimental outcomes.”
Your next job: Chief Risk Officer at Arsenal Football Club…
OMS’ full report is available on the group’s website.