Leicester City F.C Case Study Analysis
Leicester city achieved what is called “football miracle” early this may in the English premier league. They “outfoxed” big money spenders such as Manchester City, Manchester United and a host of others to to claim their first ever premier league trophy. What a marvelous story indeed. Leicester started this season as underdogs and was infact almost relegated in the previous season. What then lead to their unprecedented success? I would sum this up in the following words: exceptional management (both financial and human capital management), consistency and confidence.
Claudio Ranieri, Leicester city’s manager exhibited exceptional management of the resources at his disposal. Apart from that, he had confidence in the ability of his players to do the “impossible”. In an interview, ranieri said “When speaking to the players, I realised they were afraid of Italian tactical approaches … They didn’t seem convinced and neither was I. I have a lot of admiration for those who build new tactical systems, but I always thought the most important thing a good coach must do is build the team around the characteristics of his players. So I told the players that I trusted them and would speak very little of tactics. It was important to me that they all ran hard, just as I’d seen them running towards the end of last season”. He went on further to say: “I always tell my players to find the fire within themselves. A chance like this will never come round again. Seek that fire, don’t be ashamed of it. And they are not ashamed. If anything they demand to dream.”….. “This is the pact I made with the players, ‘I trust you. I’ll explain some football ideas to you every now and then, as long as you give me everything.'”
This excerpt from his interview shows the level of trust and confidence Ranieri had in his players. He sought to build his team around the characteristics of his players. He was not an egoistic, dictator type of manager who would makes decisions all on his own. Raneiri ensured that he considered first the opinion of his players when making decisions. Raneiri was flexible in his management style; he wasn’t a tactics only type of manager who didn’t change as situations demanded.
Human capital is one of the most valuable assets of any company, and if you don’t get it right, the failure of the company as a whole is inevitable. This is a lesson for employers, to bring out the best in your employees, you need to learn to trust them, you need to be flexible in your approach; but at the same time do not be too flexible by accepting mediocrity. Like Ranieri, trust them to deliver on the job, explain their roles or part to play in the success of the business, and demand their all in the achieving the company’s objectives.
For this to happen, you need to motivate them, show them you have confidence in them, and give a listening ear to whatever problem or challenge they may face. Ranieri in his management style applied a theory Y (Theories of human motivation and management) to his players. He believed that his players were internally motivated, enjoyed their labour in the club, and worked to better themselves without a direct reward in return. Theory Y managers seek to relate freely with their workers on a personal level, so as to create a more conductive and teaching based relationship. As a result, Theory Y followers may have a better relationship with their superiors, as well as potentially having a healthier atmosphere in the work place. It should be noted that theory X managers on the other hand believe that their workers are lazy, need strict supervision and also harsh penalties to carry out their job.
Apart from the exceptional human capital management, stellar financial management was also a factor that led to the success of the club. Vichai Srivaddhanaprabha saw an opportunity for investing, and he purchased Leicester city in August 2010 for about £39 million, and as at the time of writing, the club is worth well over £435 million. That is a return on investment of about 1000%. But there was a tradeoff; Vichai had to wait 4 years from the time of purchase before Leicester city were promoted to the premier league in 2014. That is a lesson to you starting a start-up or an acquisition. You need to be committed, you need to be relentless, and you need to see the big picture. You should not let the lack of profit in the earlier years discourage you from continuing the dream. When starting a business, you should see it as a long term investment. That is why you need to carry out a thorough research and feasibility study before venturing into any type of business, so as to have confidence in your ability to excel in the business.
That aside, Leicester city were prudent and conservative in her spending; they bought young quality players like Jamie Vardy (2012) and Riyad Mahrez (2014) on a budget of £1 Million and £400,000, and prepared them for the big stage by training them and believing in them. This was in contrast to big money spenders like Manchester city who had the habit of buying big name players for exorbitant amounts. Leicester City knew their financial capabilities, and didn’t do more than themselves. This is another lesson for business owners. Don’t go about borrowing money that can ruin the business. Act according to your financial capacity; seek to grow the business internally by increasing sales and reducing costs. Then from the proceeds, you can expand the business.
Another major factor to the success of Leicester city is the swift decision making by the board of the company played a major role in Leicester city’s success. Nigel Pearson helped the team move from division two to the championship. He resigned after some rift with the management of the board, but was called back to the position a year after. He looked like Leicester could not cope with him. When he came back, he was successful in guiding Leicester city to a return to the premier league after ten long absent years. However, the year that followed was woeful, and Leicester were almost relegated from the Premier League they struggled to get to for 10 years. Then it dawned on the management that Nigel pearson wasn’t the man for the job, as he is just a movement manager, i.e proficient in moving from one division to another. Movement was his specialty, but he lacked the consistency to keep the club on top indefinitely; this was what the premier league required, unless you would be relegated.
The management repudiated any form of sentiments. They didn’t say because Nigel Pearson led us to the premier league, we should let him destroy his good work, and sit back and watch till they are relegated. Oo no, on the contrary, they acted fast by sacking him and appointing Claudio Raneiri as their new manager. This is yet another lesson, do not let sentiments becloud your better judgment in decision making.
So guyz, hope you have been able to learn a thing or two from the success of the recently crowned premier league champions.
Robert Kreitner., Management (12th Edition)