Beware the Dynasty
The fragility of long-term success
Manchester United Football Club (MUFC) is in a real funk in the English Premier League. The third richest club in the world (Forbes, 30 May 2019), which dominated the modern Premier League era like no other before it has been pulled back into the pack. It is no longer even a challenger, let alone a trailblazer. Beware the dynasty...
For a Liverpool FC fan, this makes me exceedingly happy (due to the bitter rivalry between the two clubs that has caused me much pain throughout my entire adult life). But that is not why I highlight Manchester United’s woes. In a sport where money is almost everything, there is a change happening in the league. Smaller clubs and squads created from fewer resources are competing. The old ways of winning are not working and Manchester United is a stark case in point.
Sir Alex Ferguson resurrected the club after taking over in 1986. Over the next 26 years, he won 38 trophies – an unprecedented achievement. Ferguson now speaks to businesses and at conferences worldwide on leadership. But since leaving his beloved club, it has hopped from one failure to the next.
Three managers have been sacked, at an approximate cost of £33.2 million in payouts for unfulfilled contracts (Give Me Sport, Feb 2019). During that time the club has finished 7th, 4th, 5th, 6th, 2nd, and 6th and has spent a wapping £700 million on player transfers. All for the club to break records like the ones below:
Worst start to a league season for the club since 1989
After 16 games in charge, the current Manager, Ole Gunnar Solskjaer had achieved 17 league points – the fourth-worst total ever by any Premier League team for that many games
Solskjaer’s win ratio was 47.5% as of October 2019. The worst of any MUFC manager since Dave Sexton (1977-81)
Off-field the club is still a financial juggernaut but this is warped and propped up from record levels of TV deals and the revenue it brings for all clubs. The shine is wearing off the brand quickly, and it can happen to anyone.
Both McKinsey and the London School of Business both report that the average life span for a company has reduced significantly from 60 years in the 1920s to approximately 17 years today. The pace of change has never been faster and when leaders don’t activate strategies for the long term there is a risk of going down a path of extinction.
SME’s may be fragile due to over-reliance on the owner or key personnel and the ever stressful cash flow balancing act. Larger corporations can be stuck in a cycle of hitting short term targets where constant promotions and discounting become an addictive drug. For those at the very top, constant challengers are working tirelessly to eat away at their market share.
Being number one is great, but if that is the only purpose for the business then it can create fragility. A scenario where any slight change in the business environment can erode results and eventually be catastrophic. A change in staff, or a change in the supplier chain, or the disruption of the market by a challenger or new tech…
As Manchester Uniter has shown us, it is the Dynasties which are at most risk.
