As many of my readers know, I enjoy reading the Harvard Business Journal and the research that comes from their organization.  This month, I read an article about the eight leadership lessons of Sir Alex Ferguson.  Sir Alex Ferguson is one of the most decorated coaches in all of professional sports and was the manager for 26 seasons of football team Manchester United, which ranks among the most successful and valuable franchises in sports.  Truth be told, I started reading the article because both of my kids are athletes and I wanted to understand what good coaching looked like.  I ended up taking away eight leadership lessons that any successful coach, manager, or business leader could use.  I am going to organize this blog by outlining each of the leadership lessons and adding my business interpretation to each lesson.  Here goes:

1.       Start with the Foundation 

Ferguson believed in building a strong foundation and wanted to build it correctly from the bottom up.  In professional sports, winning is everything; however, winning a game is only a short-term gain.  Ferguson understood that building a strong club would bring stability and consistency, and his experience told him to focus on younger players.  He built a farm organization that began working with youth players as young as age nine. He stated, “Our youth development efforts ended up leading to our many successes in the 1990’s and early 2000’s”.  From those foundational teams, he signed Ryan Giggs and David Beckham.  “If you give young people your attention and an opportunity to succeed, it is amazing how much they will surprise you.”

What is the foundation of your business?

Is it human capital, intellectual property, certain products, real estate, or something other than these?  From my experience, the foundation of most business is human or intellectual capital.  Even if you rely on products, services or real estate as the primary driver of revenue, you still rely on human capital to make and fulfill your offers.  What are the things that you can do to build your human capital and intellectual property from the bottom up?  Where should you be investing now for future success?

2.       Dare to Rebuild your Team 

Ferguson continually built his teams, even during times of great success.  During his tenure, he built five distinct league-winning squads and continued to win trophies.  He understood that teams and players had a life cycle and he had a keen sense of understanding where teams and players were in their life cycles.  His “idea was that the younger players were developing and would meet the standards that the older ones had set.”  His belief was that a successful team lasts maybe four years, and then some change is needed. So he tried to visualize the team three or four years ahead and made decisions accordingly.

Where does this show up in business?

Here are two thoughts that come to mind:

Last year, I had the opportunity to meet with a prospective new client.  Their business was in fairly poor condition and had been trending that way for several years (our review of their books clearly showed the trends).  The business they were in had been changing due to advancements in technology and they were not keeping up.  Additionally, they had not had any employee turnover in more than 12 years.  They were proud of the tenure of their employees and that “nothing ever changed.”  From an advisors’ perspective, they were entirely rooted in tradition, history and the old business model that they couldn’t see the forest for the trees.  The things they were most proud of were the things that were holding them back.  They needed some new faces and needed to shake things up.

I believe that you should consider your product or service lifecycle.  Most all products and services have a life cycle, some shorter than others.  I believe technology companies understand this better than most industries.  In the technology world, the term “Moore’s Law” states that every two years, the capacity doubles and the price drops in half.  That is rapid change.  You must consider the business you are in and anticipate where your industry is headed so that you can stay ahead of the curve.

3.       Set High Standards – and Hold Everyone to Them 

More than giving players technical skills, Ferguson wanted to inspire his players to strive to do better and never give up.  He recruited what he called “bad losers” and demanded that they work really hard.  Everything that he did was about maintaining the standards they set as a club – it applied to all of his team building, team preparation, motivational talks and tactical talks.  He lifted players’ expectations.  “I constantly told my squad that working hard all your life is a talent.”

Where does this show up in business?

One of the things that is interesting to me is that Ferguson distinguishes different types of talks as team building, team preparation, motivational, and tactical.  All of these discussions show up in our businesses and we can set high standards in each area.  Think of tactical as operations and having high standards in operations, such as reducing error rates on a production line.  In the area of team building, set high standards in having the right people on the team and in the right seats.  Quite often companies have the right employees on the team but not in the right seats.  Last year, we went through a strengths exercise as a team and learned what each person’s strengths were and how to best work with them.  We learned that one of our team members is a natural mentor.  She has the natural ability to teach and mentor or clients better than anyone else.  She now she helps in that capacity. Clients love it and she is fulfilled. Think of the things that you can do in this area to continually set higher standards.

4.       Never, Ever Cede Control 

This comes down to who is the leader of the group.  Because Ferguson led 30 top professionals, he had to have control.  His personality had to be bigger than theirs.  He had to achieve and maintain a position of comprehensive control.  Players had to recognize that as a manager he had the status to control events.  Responding forcefully was only part of the process.  Responding quickly, before situations got out of hand, may be equally important to maintaining control.  One of the interesting parts about this section is that Ferguson actually let this get in his head and it appears it may have bothered him.  He said you can complicate your life in many ways by asking, “Oh, I wonder if the players like me?”  His answer was, “If I did my job well, the players would respect me, and that’s all you need.”

Where does this show up in business?

I am not quite sure where this shows up in business, but I am sure it does.  An example that I do have is the role of a CEO.  A CEO must have control of a business.  His role is to guide the company in a strategic manner.  He lays out the vision and the rest of the team fulfills the vision.  It is the COO’s role to take the vision and put the actions in place to make the vision come true.  The CEO must maintain that visionary control, but cedes operational control to the COO.  The COO then has control over the management team to make sure they can get the steps done that they need to in order to fulfill the COO’s requests.

5.       Match the Message to the Moment 

Ferguson said, “No one likes to be criticized.  Few people get better with criticism; most people respond to encouragement instead.  For a player – for any human being – there is nothing better than hearing ‘well done.'”   Ferguson always worked to tailor his words to the situations he was in.  He and his coaches always emphasized the positives.   At the same time, you need to point out mistakes when players don’t meet expectations.  They would always do it right after a game and then it was finished.  There is no point in criticizing a player forever.   As a manager, you have to play different roles at different times.  Sometimes you have to be a doctor or a teacher or a father.

Where doesn’t this show up in business?

This is human resource management at the very top level.  Whether you are working with an employee, a customer, a boss, child or spouse, each person is different and needs to be heard differently and spoken to differently.  There needs to be open and honest communication, the truth needs to be told (no matter how good or bad it is) and the message needs to be tailored to the listener.  In my CEO group, we call this being delivered firmly but with love and kindness.   I believe that people need to know the truth, good or bad, and it needs to be timely.  In sports, delivering that message right after a game makes sense.  In business, however, there may be more leeway in the time of delivery.  Be careful not to react and to think through your message and how it well be received.

6.       Prepare to Win 

Preparation comes down to practice.  Practicing for the tough situations that you may find yourself in are the steps you need to take to be prepared.  Ferguson’s practices focused on repetition of skill and tactics, looking for opportunities to learn and improve.  He had his teams practice regularly for  situations where they only had a couple of minutes left in a game and they were losing.  Ferguson set a standard of having a winning record and expected to win every time his team set foot on the field.  He was a risk taker by nature and that could be seen in how his teams played late stages of games.  “If we were down at halftime, the message was simple: don’t panic.  Just concentrate on getting the task done.”  Being positive, adventurous risk takers was their style.  They were there to win games.  His teams had perseverance and never gave in.  As he said, “if you give in once, you’ll give in twice.”

Where does this show up in business?

Business is much like sports. You can play to win, play not to lose, or just play.  I have also heard it said that a professional practices to never get it wrong and that a novices practices until he gets it right.  In each of our businesses, I believe we practice to never get it wrong.  I would reflect back on your biggest wins in business in the last two years and consider how you prepared to win or could have prepared better to win.  This could be in terms of winning new customers, fulfilling on an offer to existing customers, customer service, or just about anything you can think of in your business.  How does your team practice everyday to get small things right, and where does that show up when the big opportunities arise?

7.       Rely on the Power of Observation 

This lesson comes down to trust and leadership.  Ferguson believes that you should delegate direct supervision to others, trust them to do their jobs, and allow managers to truly observe.  Based on Ferguson’s narrative, this did not come easily or quickly for him.  It took years of experience. Both an assistant manager and a coach of his told him to essentially let go of the reins and let them do their job.  Once he ceded the detailed control to them, he was able to observe his teams from a much higher level.  That higher level observation allowed him to see a range of details and their performance level jumped as a result.  Ferguson said that observation is a critical part of management skills and gave him the ability to see things you don’t necessarily expect to see.

Where does this show up in business?

I see this in many closely held businesses, especially in areas where the products or services being produced require a high degree of technical ability to produce.  I also see that in these areas, letting go of the details and observing allows businesses to ascend the ranks and be very successful.  The mindset that “only I can do it” or “nobody does it better than I can”, can be one of the things that holds companies and people back from really succeeding.  I would create a process or requirement that everyone moves up or moves out to the extent possible.  This also relates to lesson #2 – dare to rebuild your team.

8.       Never Stop Adapting  

Over the 25 years that Ferguson was at Manchester United, the business of sports changed. So did soccer and medicine.  One of the things that Ferguson did well was manage change.  His belief was that you control change by accepting it.  You need to have confidence in the people you hire and the minute staff members are employed, have trust that they are doing their jobs.  Ferguson said, “the only way we can keep players at Manchester United is if we have the best training ground in Europe.”  At that point, they started their own medical center, installed Vitamin D booths in the players’ locker to compensate for the lack of sunlight in England, fitted vests with GPS sensors that allowed them to track players’ performance right after a training session, and employed an optometrist and a yoga instructor.  To quote Ferguson, “I always felt I couldn’t afford not to change.”

Where does this show up in business?

I believe that change is hard for most people and businesses.  Technology and business is changing at the fastest pace in history. We can embrace it or fight it.  Fighting change will not stop it from happening.  If we embrace change, we will be able to control the pace at which we change.  If you search “early adoption curve” online, you will see several graphs on innovation and adoption.  The innovators are the first 2.5%, the early adopters are the next 13.5%, the early majority is the next 34%, late majority 34% and finally the laggards are the last 16%.  This tells me that everyone will either adapt to change or be driven out of the market.  While you may not want to be the innovator (innovation is expensive), being an early adopter may give you more market share after the innovators have proven the path. Who are the leaders in your industry?  What are they doing?  How are they changing? What technologies, processes, procedures and people are they investing in?  How can you get involved?

If you would like to read the entire article, go here.  Since I have read the article and written this narrative, I have observed several of these lessons with my team and with our clients.  If you have time, I encourage you to read the entire article.