Source: London Business School
by Rob Morris,
26 Jul 2016.
How did the Italian football coach take unfancied Leicester City to the Premier League title and what can business leaders learn from him? Professor David P. Myatt reveals all
It’s a remarkable turnaround for a man who suffered his biggest managerial setback months before joining Leicester in July 2015. He was sacked as Greece’s national coach in November 2014, following a humiliating 1-0 home defeat to the Faroe Islands.
While many fans and pundits questioned his appointment at Leicester, Ranieri has proved all the doubters wrong. But how? And what can business leaders learn from the likeable Italian?
David P. Myatt, Professor of Economics; Deputy Dean (programmes) at London Business School, believes Ranieri tapped into a winning mentality that emerged months before he joined. “At the tail-end of the 2014/15 season, Leicester had won seven out of nine games to come back from the brink and avoid relegation,” he says.
“For a football team, continued success can be self-reinforcing and lead to an upcycle. That then makes the players want to continue their run, which becomes a self-fulfilling prophecy. It’s the same in business – we all want to play for a long-lasting, winning team.”
Professor Myatt adds that bringing together talented individuals who believe their colleagues will contribute to the team can have a galvanising effect. “Anticipating that I’m going to work hard and participate incentivises you to do the same,” he says. “This idea of mutual participation creates a self-reinforcing phenomenon.
“If I think you’re talented and will give your all, my expectation is that the team is more likely to succeed. On the flipside, if anyone in the team suspects someone’s slacking off and a particular project is going to fail, we all feel there’s no point in making a real individual effort. That then leads to a self-fulfilling expectation of the project collapsing.”
We’re all in this together
The idea of a self-fulfilling prophecy applies to any sports or business team. As Professor Myatt points out, teams are often in one of two states: the honeymoon period or crisis mode. When times are good, political parties are elected to government, a football team wins the Premier League or a business school climbs the rankings. These successes lead to a self-reinforcing cycle of positive expectations, where everything looks great. In contrast, teams in crisis mode expect things to go wrong, they suffer setbacks and the failure that everyone anticipates turns into reality.
Top leaders understand that positive self-fulfilling prophecies come from establishing interdependence within the group. This involves giving each individual a task, which has to be completed to ensure the project succeeds. If one person fails, the team cannot complete its objective.
Using interdependence to drive individuals can be an effective way to develop a high-performing team, according to Professor Myatt. “Making people interdependent reinforces their incentive to succeed, because everyone must play their part in order to complete the project successfully,” he says.
“But it also creates risks. If I think you’ll screw up and not do your part, I might as well stay home. Organisations that rely on teamwork and interdependency can achieve success, which becomes a self-fulfilling prophecy. But interdependency can also lead to a crisis in confidence if things go wrong.”
Leicester’s Premier League rivals Chelsea were hampered by a self-reinforcing decline throughout the 2015/16 campaign. Despite winning the title the previous season, the London club suffered a major dip in form that cost their then manager Jose Mourinho his job.
Mourinho reportedly lost the support of his players, fell out with the club’s medical staff and failed to arrest his team’s slide when things went wrong. He also punished players for making mistakes. In Chelsea’s 3-1 home defeat to Southampton, Mourinho was accused of humiliating half-time substitute Nemanja Matic, by hauling him off after 27 minutes. “Chelsea had a self-reinforcing expectation that took them upwards in 2014/15, but they had a major flip the following season and went downhill,” Professor Myatt says.
Building momentum
In contrast, Leicester’s strong start to the 2015/16 season gave the team the momentum and belief to continue winning. Ranieri’s faith in the same players was also a major factor. He picked just 17 players in the first 22 games, with his preferred 11 playing 87% of all matches – a fresh approach for a coach known as the ‘Tinkerman’ because he regularly changed his teams at previous clubs.
Relying on the same personnel, whether managing a football or business colleagues, is critical to success, according to Professor Myatt. “We’ve all heard people call Ranieri the ‘Tinkerman’, but it’s been interesting to see him establish a more stable team at Leicester,” he says.
“One of the challenges for leaders in any organisation is whether to ‘bench’ someone when they make a big mistake. We see this happening in football and politics; if someone screws up, they’re sidelined or benched.”
Ranieri’s players maintained a consistently high performance throughout the Premier League season, although there were some inevitable mistakes. The team conceded a last-minute goal in a 2-1 defeat to Arsenal, while star striker Jamie Vardy was sent off during a 2-2 draw with West Ham. Nevertheless, Ranieri always encouraged his players to forget about their individual errors and move on.
“He protected his players when they made mistakes, which gave them the confidence to take risks,” Professor Myatt says. “Benching someone in business can knock their confidence, because they think they will be sidelined if they screw up.
“One of the things a leader may do in that situation is to encourage staff to try things and not worry about making mistakes. But if they don’t make changes when things go wrong, team members may slack off as they feel their positions are protected.”
Follow the leader
Coordinating the Leicester players’ expectations and steering them towards a common goal was one of Ranieri’s greatest achievements. The club’s benchmark for success changed throughout the season as Leicester racked up more and more wins. Fans hoping their team would survive in the Premier League were suddenly dreaming about a top-four finish as the season reached its climax. By May, they dared to believe the club could win the title.
Ranieri was the architect of the team’s success, encouraging the players to work for each other and instilling in them an unshakeable belief that they could achieve greatness. “A leader acts as a focal point for the team and coordinates expectations,” Professor Myatt says. “They also coordinate the collective effort of the team.”
The Italian coach also identified the squad’s strengths and weaknesses and brought in a few new players to plug the gaps. Professor Myatt believes business leaders who take the same approach in their organisations are more likely to develop successful teams.
“In academia, one of the ways to get talented people to join you is to convince them that other high talented academics are coming on board – and it’s the same with businesses. But as soon as you lose one or two good people, others in the team start worrying, you get a flight risk and things tend to go wrong.”
After leading Leicester to the title in 2015/16, it remains to be seen whether Ranieri can repeat the feat in the upcoming campaign. For Professor Myatt, the club needs to keep most of its best players to retain one of football’s most coveted trophies. “If he loses one guy, it will be fine. But if a critical number of talented players go, what happens to the team’s expectations? The concern for Ranieri is that selling players will break the equilibrium.”
Whatever happens, Ranieri will remain an inspiration to business leaders after achieving the incredible with Leicester.
Picture credit: Kostas Koutsaftikis/Shutterstock.com
