Businesses may have a thing or two to learn from English football’s unlikely champions

IF YOU read the back pages of the British press this weekend, you might be forgiven for thinking Claudio Ranieri, an affable Italian, has found a way to turn water into wine. In footballing terms, he has. Mr Ranieri manages a club in England, Leicester City, which historically has not been very good. On May 2nd his team became de facto champions of the English Premier League (the lead is now unassailable), a competition more watched than any other on the planet, and so infused with money that those among the biggest-spending clubs—Arsenal, Chelsea, Manchester City and Manchester United—have won all 20 league titles of the past 20 years.

Leicester’s utterly unlikely victory has enthralled fans who like to see an underdog do well. Sports obsessives will spend the summer debating how the cunning Foxes did it, and if their good form can be sustained. But Leicester’s triumph will also spark interest in the world of business, which has long looked to sport for lessons on management and leadership. Sir Alex Ferguson, a wildly successful former boss of Manchester United, has taught courses at Harvard Business School. Billy Beane’s use of statistics at the Oakland Athletics, a baseball team with limited means, was an early parable of the power of “big data”; Mr Beane now sits on the board of Netsuite, a software firm. Steve Peters, a psychiatrist who has worked with a range of elite athletes, runs programmes promising to help stressed business folk manage their “inner chimp”. It’s a fair bet that Mr Ranieri will be on the corporate-speaking circuit next year.

What lessons might he offer up? An obvious one is that successful leaders learn from their failures. Mr Ranieri, who is 64, took over at Leicester last July and brought 30 years of experience as a manager. He had never won anything notable in England before, being known as a “nearly man” for finishing second in the Premier League when he coached Chelsea. One criticism was that he fiddled too much with his team choices, a trait that earned him the nickname “The Tinkerman”. At Leicester he resisted doing that. Business leaders are routinely exhorted to learn from, and even celebrate, their mistakes. Supposedly, Walt Disney’s early bankruptcy only strengthened his resolve to succeed. Henry Ford called blunders necessary for achievement. And Bill Gates has said success is a much lousier teacher than failure. It can be hard to know precisely what to change; Mr Ranieri, by design or good fortune, found the right thing to adjust.

Second, the club’s story is a reminder that smaller outfits can prosper by emulating what bigger ones already do well. Leicester adopted the approaches of the biggest football clubs in using new technology and analysing lots of data on how players perform. The opportunities for smaller fry to emulate giants have got bigger elsewhere, too, thanks to technology. Where once it took hefty budgets and in-house data centres for retailers like Walmart to analyse sales data and lure shoppers to out-of-town malls, for example, now cloud computing means smaller firms can crunch data to draw likely buyers to their wares online.

Third, Mr Ranieri might reflect that not succeeding in one area can be helpful—if you can then focus on doing better elsewhere. The team fared badly in cup competitions, but was then free to concentrate on winning league games. In business, too, avoiding distractions and focusing on the “core” is a management trope. Total, a huge French energy company, had hoped to get into gas production in America, but is now thankful it missed out. More deliberately another French firm, Kering, withdrew from general retailing in the past few years—selling off brands such as Printemps, Fnac, Conforama—and now specialises in the far more lucrative industry of luxury goods.

A final lesson lies in Mr Ranieri’s own relaxed management style. In training sessions he used an invisible bell—calling out “dilly ding, dilly dong”—to keep his team focused; he bought them all pizza when they performed well. The result was to cultivate a particularly strong sense of team spirit. Tech firms are particularly well-versed in team-building tricks, using perks like food, nap pods and idiosyncratic slang (“Googlers”, “Softies” and “Amazonians”) to bind employees together. As expectations and pressure grew, Mr Ranieri downplayed his team’s ambitions. Modesty in public affairs can be cleverer than hyping up expectations. Plenty of unicorns will end up regretting claims that they are about to change the world.

There is no “I” in Leicester 

There is another way of looking at Leicester’s triumph, one that the self-deprecating Mr Ranieri might endorse. “The Halo Effect”, a 2007 book on management delusions by Phil Rosenzweig, argued that great performance by a business often leads to managers being feted for their brilliance; just as poor performance sees them being pilloried for their bad decisions. In truth, it is very hard to tease out the sources of outperformance, and success is not necessarily attributable to things in managers’ control. Luck, in the form of a lack of injuries, played its part in Leicester’s success; so too did the shortcomings of rivals. Mr Ranieri himself has not suddenly gone from being good to great: he has been using his imaginary bell to decent effect throughout his career.

The big test for Leicester will be if they can sustain their success. Being champions will bring a financial fillip: a prize of about £90m ($131m)—a share of the £1.7 billion the league gets in broadcast income yearly. Other blessings will follow. Leicester will now also play (for a while) in the Champions League, generating more income. But unglamorous clubs have previously won the Premier League, only to revert to relative mediocrity. Blackburn Rovers triumphed in 1995, but now languish in a lowlier division; most fans, and players, will remain keen on the biggest clubs. Winning the league has gone far beyond most expectations. But if Leicester were to do it again, the Tinkerman really should get ready to lecture at Harvard. 


Credit: The Economist