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No change at the top: Culture wins

Business leaders are now routinely replaced. But does bringing in a new leader improve performance? Udo Braendle’s unique research into ...

By Udo Braendle . 01 December 2005

Business leaders are now routinely replaced. But does bringing in a new leader improve performance? Udo Braendle’s unique research into the replacement of football coaches suggests not.
No change at the top Culture winsIn recent times, Daniel Bernard at Carrefour, Herbert Demel at Fiat and Carly Fiorina at Hewlett-Packard are among the business leaders who have been replaced. Why? The logic is that replacing them will improve performance. But, does it actually do so? To better understand the relationship between an organisation’s performance and the replacement of its leader, we examined the ten football clubs in the Austrian Bundesliga.

The parallels between business leaders and football coaches are stronger than you might imagine. Football coaches operate in a similarly competitive environment – perhaps even more so. Like CEOs they are ultimately responsible for performance while being accountable to a chairman and supporters (the equivalent of shareholders). They are also subject to intense media scrutiny. (Indeed, research found that the number of coaches replaced in the German football league correlates with the amount of local media coverage. The more media attention, the more difficult the coach’s position.) The similarities don’t end there. Football clubs are no longer small firms. Especially in countries such as the UK, Italy, and Spain, clubs operate in a global, multi-billion pound industry and have global brand recognition.

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