10. Tomorrow’s football club: an inclusive approach to governance
So, football has become big business. Is that the end of civilisation as we know it? No. From Manchester United through to Mansfield, football clubs have to learn about the way businesses behave if they are to build lasting success. In this contribution to the debate I want to draw on the research and the experience of ‘Tomorrow’s Company’, a business-led organisation which champions an inclusive approach to business. I do so as a business observer of the football scene, but also as a football fan who has loved the game for over thirty years. Like many participants I am occasionally saddened by the short-sightedness of boards, the excessive rewards of those at the top, at the inadequate support for investment in the future, by the folly of investors who see the whole thing as a bundle of tradable assets rather than as a delicate organism fed by loyalty and human values . . . and I am talking about business here, not just football.
The parallels between sporting and corporate success are endlessly fascinating. Supporters of the top teams at the moment worry about the loss of identity when foreign stars – or foreign managers – jet in, pick up a season’s wages, and jet out again.1 There is interesting evidence from the research literature about the qualities of the businesses that added the most shareholder value over five decades in the USA. The most successful companies were described as having ‘cult-like cultures’. You either fitted in or you got out. (Look at Wimbledon – if you don’t want to have your new shoes and suit set on fire after the first training session, don’t go there.) And among the most successful companies, top executives were rarely hired from outside: there seemed to be something irreplaceable about ‘growing your own’. That was over the five decades ending in the 1990s; interestingly, Hewlett Packard, one of the role model companies, has just broken with this tradition to hire a woman as its new CEO. The key test of her success, as with Arsène Wenger or Gérard Houllier, will be in her ability to work with the grain of the organisation’s tradition and values, to change what has to be changed while knowing what you must never change.
Perhaps the clearest message from business to football is the one about uncertainty and change. Today, for the top clubs it seems easy, with West Ham turning people away while charging people £29 a head for tickets, whilst fans of Schalke 04 in Germany pay top prices of around £4 a ticket.2 Do we really believe that the admission-prices curve can continue indefinitely on its steep upward rise? The history of business failure is full of people who took for granted the continuing demand for their products. What about pay-per-view? What if we elected a government that fell out with the EU and foreign players were prevented from coming here? What if there was a nasty recession or civil disturbance? What if interest rates doubled just as football clubs were busy expanding their stadiums, and they were left half-finished and half-empty for two seasons? What if there is a new wave of amazing interactive cybersport, which leaves football looking boring and staid to a new generation of punters? We do not know what will change, but something will change, and when the change comes, the lesson from business is that the survivors will be those that were:
- sensitive to the changing climate around them;
- quick to learn and adapt;
- insistent on preserving their unique character and values;
- prudent with their cash;
- good at growing their own talent;
- well regarded by their local authorities;
- earning the loyalty of the next generation of their fans.
Why do these things matter to successful businesses? It’s common sense. Relationships with customers, suppliers, communities and employees are to a business what ears, nose, eyes and touch are to an animal or person. They enable you to sense danger and seize opportunity. Businesses which only think about pleasing today’s shareholders destroy their ability to create wealth tomorrow. Relationships depend on human qualities like loyalty and trust: when you are in trouble you want to have a strong deposit account of goodwill to call upon, not a group of people who have felt exploited for years. You can’t trust people who have no values.
Prudence with cash gives you freedom of action: if you have gambled away all your reserves you are at the mercy of whatever rich freak may choose to buy you out. It was home-grown talent that rescued Manchester United after Munich. What we sow, we reap: we just don’t know if it will take twenty minutes or twenty years.
An inclusive approach to the running of a football club would start with understanding what makes it different. It doesn’t need a PhD to realise the central importance of supporters. If you map out the relationships that matter to, say, Tesco, you would go through the employees, the customers, the suppliers, and the community whose permission Tesco needs to operate. Only if Tesco get all that right can they hope to create a return for their shareholders. But what about football clubs?
A few years ago, my family was on a half-term break near Scarborough. My son I and decided to go and watch Scarborough play a home game in the old Fourth Division against Swansea. It was a wet night, and after ten minutes the home team scored. A few feet away from us was a band of Welsh supporters who had just travelled 300 miles, and who had another 300 to travel home, and who had just seen their side concede an awful goal. Yet they were singing, ‘We’re so great, we’re ****ing incredible.’ That’s what I call loyalty.
Football fans aren’t just customers. They are, especially in the case of the smaller clubs who lack a Shanghai branch of the supporters club, the local community. They are suppliers of goodwill, energy and atmosphere. Without the atmosphere of the Premier League, many foreign players say they would not be so keen to come to the UK. And the fans have power: if they withdraw their goodwill and support, few boards can hope to survive. The money that comes from television rights and merchandising may be a welcome extra, but it only grows out of the soil of goodwill that fans provide and over generations may withdraw.
If clubs get it wrong with their fans, they have in one blow messed up three of their key relationships. So my agenda for an inclusively run football club would include the appointment by the board of a director responsible for supporter relations. This would lead to all kinds of innovation. This would include consultation over the fairest way to allocate tickets; how to have a public-address system that actually addressed the public; co-operation with the local community over parking; internet dialogues with the manager; quarterly face-to-face public meetings where the board explains to the fans what it is doing on youth development; a joint approach to difficult issues like fans standing up in seated areas; improvements to the quality of music, entertainment and food at the stadium. Again and again in Tomorrow’s Company we talk to businesses who find that if they cultivate the habit of listening, really listening, and encouraging the flow of new ideas, they make savings. Recently a construction company had massive problems bringing in skips to remove waste from the shopping centre where its operators were working. One day a manager from the building company was talking to the labourer who swept up round a neighbouring supermarket. ‘We have our own waste collected every day. Why do you do a separate collection?’ asked the labourer. It seems obvious to them now to collaborate on waste collections: yet nobody had ever thought of it before.
But dialogue with the supporters would not just be about the housekeeping issues. A tomorrow’s football club would get into dialogue on the big issues too. Ask the directors to state, in the programme, and in the club’s annual report, what they are there for. Few clubs, whether publicly quoted companies or mutuals, would dare to say, ‘We’re here to rip you lot off and make lots of money for us.’ Most would find it much easier to say, ‘We are here to win the championship, entertain the fans, and build a better club for the future.’ Great. Once you’ve got that in black and white – or claret and blue – you can start holding them to it. Any time there’s a decision you don’t like, challenge the club to justify it against their own statement of purpose.
In the same way, challenge the club to state what its values are, what it cares about, what it will and won’t tolerate. Get it to make a commitment to dialogue. Few clubs would dare to say, in writing, ‘No we won’t talk to our fans.’ So even the reluctant will be shamed into making some kind of commitment to dialogue. Build on it. Conversation changes lives! Figure 1 below illustrates this model.
One of the benefits, for me, in attending the July 1999 conference at Birkbeck College on the regulation and governance of football was to hear from speakers like Brian Lomax, who had stepped in at a time of crisis for Northampton Town, and started to build an inclusive football club. Mutual patterns of ownership may be part of the answer. I am in favour of experimentation. But there are, sadly, some mutual organisations which have lost touch with their roots. Mutual behaviour, inclusive behaviour is more important than mutual structure. Maybe non-mutuals should start to promote supporter-shareholding schemes through Save As You Earn. It may well be that the defection of the FA from the role of regulator does leave a vacuum, which will need to be filled from above. Be warned, however: regulators do not always achieve the desired result. Compliance cultures are not always the natural breeding ground of innovation and flexibility.
Figures 2 below illustrates what I believe the future agenda for action should be for all companies, football clubs included.
Personally, I believe that the next decade can and should be the decade of dialogue in football. We may all then be in time to ensure that come the next downturn in support there is a robust group of inclusive football clubs which are truly built to last.