Opinion

What can "people strategies" within business learn from Manchester United?

3 min read

10 November 2015

With one of the most high-profile successions in recent history resulting in a failure after nine months, what takeaways can be garner from the way in which Manchester United went about identifying its next boss.

Moyes was ultimately sacked within nine months. This decision cost a £5m pay-out to Moyes, £300m in new player recruitment, and a minimum £6.4m of lost revenue for failing to make the UEFA champions league in 2014/15. A significant amount given that the 2015 Deloitte’s Football Money League report lists Manchester United’s 2014 annual revenue at £433m. Ouch. In this instance, did an over-reliance on a single leader’s evaluation of talent result in an unsuccessful appointment?

Ferguson has recently described the Moyes appointment as “we did the best under the circumstances we were in”, clarifying this with “Jose Mourinho was going back to Chelsea, Carlo Ancelotti was going to Real Madrid, Jurgen Klopp had signed a contract with Dortmund and Louis van Gaal was staying with Holland for the World Cup.” With hindsight, it could be argued that Moyes was the best available rather than the right person for the role.

We’ll never know if Ferguson had doubts about the Moyes appointment. What we do know, however, is that it wouldn’t be an exceptional circumstance if he did. A recent Leadership IQ study found that 82 per cent of managers reported that, in hindsight, their job interview process with candidates did elicit clues that their chosen candidate was headed for trouble, but they were too focused on other issues, too pressed for time, or lacked confidence in their interviewing abilities to heed the warning signs.

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My view is that the succession plan for Ferguson is an illustration of a broader principle in people strategy within organisations. Businesses need to align people strategies to overarching business challenges. This can be summarised by three actions that need to be taken to build this alignment.

  • Appoint a specialist role on the executive team to constructively challenge the organisation on all matters of people risk
  • Build the same rigour within your approach to people risk, as you do to managing financial, operational and reputational risk
  • Ensure people risk is included as a formal item on the leadership team agenda to enable key matters to be debated openly by the whole group

Manchester United’s failure to meet the criteria presented above resulted in a financial loss representing 72 per cent of its annual revenue. The assertion is that any business failing to consider these three pieces of advice may risk facing similar losses.

David Southall is associate director at Hay Group.