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November 21, 2006
Performance Network - The World of Soccer
A few posts ago I introduced the term performance networks”. I have been researching a number of verticals on how the various stakeholders interact. I have a good number of examples, but am still very much interested in finding more.
Together with senior consultants Jeroen Visscher and Ralph Meijers of European management consulting firm Atos Consulting, we applied the idea of managing multiple stakeholders to the world of soccer. There are many similarities between soccer and business strategies. Some soccer teams have clear roles and positions in the field and use playing patterns, this can be compared to operational excellence. Other teams are organized around just a few stars, and the rest of the team serves them, not dissimilar with product innovation principles. Other teams may have created a huge fanclub culture, where there is a party no matter whether the club wins or loses, that is customer intimacy. It makes sense to test performance management” principles on soccer as well, in this particular analysis the performance network.
A performance network is an overview of the stakeholders in a certain value chain, and an understanding how they enhance each others performance. Where traditional performance management is aimed at optimizing ones own performance with ones own means, in a performance we ask what stakeholders can contribute to our success and how we can make our stakeholders more successful. The world of soccer has a very complex performance network.
There are many relationships, lets quickly explore a few.
The ultimate goal of the performance network is to win. The trainer, technical staff and players are key in achieving that goal, all other stakeholders, internal and external are there to facilitate. If the team wins, that increases the means and the resources, which can be invested again in being even more successful.
A new phenomenon in the world of soccer is the entry of venture capital. An investment firm buys” a player and looks for a club where the player can be successful. The purpose is that after being successful, the player can be sold to another club with a profit. In a traditional performance management sense, the relationship between the club and the investment firm would be purely transactional, where the investment firm focuses on return on investment” alone. However, there is a joint objective: the success of the player. The club should think of ways how to accommodate the investment firm by offering value enhancing services, such as extended coaching of young talent, with that the club could create preferential treatment by the investment firm. The investment firm should find ways to invest in the club, to make sure the players on the investment firms payroll get preferential treatment when dealing with publicity.
The relationship between board and fanclub is difficult. The fanclub adds to the value proposition of the club, and is of importance. On the other hand, negative sentiments within the fanclub can force trainers and boards to step down. From a traditional performance management view, the fanclub is interested in a large number of members, to increase its influence and presence. The board is interested in the fanclub as a market for merchandise, seasons tickets and special activities. When asking yourself what to contribute to the partner, the picture changes. Perhaps a fanclub representative should sit in on the board, to change a sometimes adversarial relationship (the gentlemen in the VIP lounge dont care about the game”) into a more collaborative one, sharing the same goal: a high performing team. Perhaps the board should actively promote fanclub and open up all its communication channels to make the fanclub more successful. The relationship and the performance of both will improve.
Lastly, the relationship between the league and the board is changing. Where the league used to be the party to organize the competition and championships, in various countries it now also assumes the role of a regulator, who can force clubs to for instance change their financial practices, threatening to take away the clubs license. Both club and league have the same goal, a strong competition, attracting visitors, TV airtime and a healthy market. Yet, due to the regulator role, the transparency between board and league seems to becoming less instead of more (which would be useful in a joint objective relationship). Clubs will try to neutralize the expanding power of the league. In some sports that has even led to clubs forming their own league.
The world of soccer is used to dealing with many stakeholders, and the world of business can learn from that. Yet, conversely, business has vast experience with performance management, and the notion of tracking objectives with performance indicators is something valuable for soccer as well.
Perhaps we should organize a round table?
Posted by Frank Buytenkijk at November 21, 2006 7:02 AM
