HBS CASES

HBS Cases: Sir AlexFerguson--ManagingManchester UnitedPublished: November 7, 2012Author: Sean Silverthorne

For almost three decades, Sir AlexFerguson has developed the Manchester Unitedsoccer club into one of the most recognizedsports brands in the world. Professor AnitaElberse discusses the keys to Sir Alex'slong-time success.

Anita Elberse, a Professor of BusinessAdministration in the Marketing unit at HarvardBusiness School, studies high performers increative industries—from basketball superstarLeBron James to pop diva Lady Gaga, fromactor Tom Cruise to tennis powerhouse MariaSharapova.

Elberse's latest subject is a British soccerclub manager who turns out to be as incrediblea performer as any of the lot. For 26 years, SirAlex Ferguson has kept his Manchester Unitedsoccer club either at or near the top ofcompetition, both in England andinternationally.

"There is no active coach in the highestechelons of the world of soccer—or, to myknowledge, in sports as a whole—who comeseven close to such a lengthy tenure, let alonethe number of titles and trophies he hasaccumulated," says Elberse, who recentlyauthored a business case on Ferguson.

"I think his willingness todevelop young talent lies atthe heart of his long-runsuccess"Ferguson's career indeed is an impressive

feat. Look around for leading executives in anyindustry who have managed to succeed with thesame firm at the highest levels for nearly threedecades. Ferguson's talents include deftmanagement and motivation of some of thegreatest (and most high-strung) athletes in theworld, staying current on the latest trainingregimens and technology, and plotting strategyboth for on-field play and organizationalsuccess.

Elberse first taught the case, "Sir Alex

Ferguson: Managing Manchester United," lastmonth to students in her course "StrategicMarketing in Creative Industries," withFerguson in the classroom. HBS WorkingKnowledge recently interviewed Elberse aboutthe case, which is now publicly available.

The Ferguson case is part of Elberse'sgrowing body of work on creative industriesthat include book publishing, film, music,television, video games, the performing arts,sports, and advertising. She has written dozensof cases on firms and businesses as varied asHulu, Marvel Enterprises, New York's Marqueenightclub, The Metropolitan Opera, and theNFL.

Sean Silverthorne: What was theinspiration for this case and how did it cometogether?

Anita Elberse: I am particularly fascinatedby companies and people in entertainment,media, and sports that have very strong trackrecords over a long period of time. Sir AlexFerguson is a manager who has beenextraordinarily successful in a career that spansdecades—he has been at his current club,Manchester United, for over a quarter of acentury. Under his leadership, United hasbecome one of the world's most successfulfranchises in all of sports. So when I learnedthrough an industry contact that there might bean opportunity to write a case on Sir Alex, Ijumped at the chance. I figured I wouldundoubtedly learn a great deal about what ittakes to lead and manage a sports team, and thatindeed proved to be the case.

Q: The case reads as if you were able toattend some matches in person and seeFerguson in action. If so, what was thatexperience like?

A: Yes, that's true. It is one of the sacrificesI make in the name of research! But in allseriousness, my coauthor Tom Dye (HBS MBA2012) and I felt it was important to take ourtime and do this right.

Ifirstmet SirAlexlast fallduringone ofhistrips tothe US,and wesoonmadeplansto visit him in Manchester twice: in March, tosee him in action during the season, and in Julyduring the summer break to allow ourselvesmore time to speak with him and learn about hisapproach to managing the club. The access wewere given was truly remarkable. We got to seehis approach to a game, observing him both atCarrington, the training ground, and at OldTrafford, the stadium. He personally gave us atour of the training ground, and gave us accessto parts of the stadium that are normally closedoff to visitors. We had a chance to speak with arange of people he works with and values, fromthe club's CEO to his assistant coaches, theplayers and the youth team, to his long-timeassistant, the kit manager, and even the ladieswho take care of washing the team jerseys. Allthose experiences and interactions provedinvaluable to understanding Sir Alex'sday-to-day approach.

Q: A big part of Ferguson's story is hisamazingly high and consistent performanceover time-26 years. What are some of the keycharacteristics he demonstrates that accountfor these strings of successes?

A: I think his willingness to develop youngtalent lies at the heart of his long-run success.Sir Alex speaks of the difference between"building a team and building a club." When hestarted at United, he immediately set aboutrevolutionizing the club's youth program. Healso made it more visible in the organization:for instance, ensuring that academy playerswarmed up alongside senior players every day

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in order to foster a 'one club' attitude. And evenearly on, despite calls from many observers toplay it safer ("You can't win anything withkids" is what a respected televisioncommentator famously said at the time), hegave youth players a chance to win a place inthe first team. Many of the players hedeveloped—Ryan Giggs, David Beckham, GaryNeville, Paul Scholes—became true standoutsin their generation, providing the club with astrong base on which to build.

Managing this process well over a longperiod unavoidably involves cutting olderplayers who may no longer be right for theteam, which can be taxing emotionally. "Thehardest thing to do is to let go of a player whohas been a great guy," Ferguson told me.

Many other factors contribute to hissuccesses, too. One factor I am particularlyimpressed by is his ability to adapt to changingtimes. You have to realize that the world ofsoccer nowadays looks nothing like the one hestarted in as a coach at United 26 years ago. SirAlex has embraced new technologies and newapproaches, hiring sports scientists on his staff,and adopting new ways of measuring andimproving the performances of players. Thatsounds straightforward, but if you have been assuccessful as he has, I can imagine it is veryeasy to get stuck in your ways.

Q: Like many managers, Ferguson mustmanage for the short term (in-game andgame to game), intermediate term (for aseason), and long term. What advice do youthink he would give to other executives abouthow to balance those requirements?

A: You are absolutely right—there is aconstant tradeoff between managing for theshort and long run. I can't speak for Sir Alex, ofcourse, but I think he would say that as amanager, you have to take calculated risks.Within a season, the trick is to think ahead.Here's how he described it to me: "I might restkey players for a game that is less important.There is a risk element in doing that, and it canbackfire, but you have to accept that. You haveto trust your squad."

When it comes to managing for successacross different seasons, the importance ofbetting on youth—as I mentioned, one of thehallmarks of his approach—is critical. There isa great quote by Sir Alex in the case that isrelevant here: "The first thought for 99 percent

of newly appointed managers is to make surethey win—to survive. They bring experiencedplayers in, often from their previous clubs. But Ithink it is important to build a structure for afootball club—not just a football team. Youneed a foundation. And there is nothing betterthan seeing a young player make it to the firstteam."

Q: Manchester United has no lack ofegos—so how does Ferguson earn respectfrom his players while at the same timedriving them to success?

A: He is adamant that a manager shouldnever lose control. There's a telling quote in thecase in that regard: "You can't ever losecontrol—not when you are dealing with thirtytop professionals who are all millionaires. Andif anyone steps out of my control, that's themdead."

It may seem harsh to state it like this, but Ithink his clarity on this matter is what earns himthe respect from his players, from the biggeststars to the up-and-coming young ones. Theyknow he will not waver from doing what hefeels is best for the team and the club.

Sir Alex is also a true master at motivatinghis players—he seemingly knows exactly whatto say when, and understands what differentplayers need. He holds everyone to the samehigh standards, but will tailor his approach todifferent personalities. "He knows how to lookafter people," is how the kit manager put it, andmany people at the club spoke about the familyatmosphere he creates. I think that allowsplayers of all different backgrounds to thrive.

"Sir Alex himself seemedperfectly at home in ourclassroom"Of course he earns respect with his

tremendous knowledge of the game of soccer,too. The breadth and depth of his expertise istruly astounding. Over dinner one night inManchester, I told him about a game I had seenlive in the early 1990s in Italy—one betweentwo Italian teams, AC Milan and Napoli. Hecould speak at length about how the teamsplayed in that period, and could name nearlytheir entire lineups. And he prepares foreverything, even his class visit, in great detail. Ican imagine that, in turn, motivates his players

to give it their all, too.

Q: How did the students react to him,and what was his reaction to the experienceof visiting your classroom and participatingin the case discussion?

A: Yes, that was quite a day! I taught thecase in the first half of the class, and Sir Alexspoke and answered students' questions duringthe other half. There were so many guests in theclassroom that they had to sit in the aisles andon the stairs—the room was completely packed.Sir Alex himself seemed perfectly at home inour classroom, and thoroughly enjoyed theexperience. They lined up to engage with himafter class as well, and he met with manystudents more informally later in the afternoon.You could tell he has a passion for teachingyoung people—that comes through in his workat Manchester United, and it was also veryevident in the Harvard Business Schoolclassroom. It was a very exciting and specialday for all of us. I hope to welcome him backnext year!

Q: What are you working on next?A: I am currently putting the finishing

touches on my first book, which will bereleased in the fall of 2013. The book is aboutthe entertainment industry—the idea is toexplain how it works, why it works that way,and how the industry may change in the future.

In the meantime, I am working with SirAlex on a Harvard Business Review article thatdescribes his philosophy to building, leading,and managing teams. (I am pretty sure it will benecessary to visit a few more ManchesterUnited matches to collect additional data). I amalso hoping to complete a few other new casesin the entertainment, media, and sports sectors.It's such a fascinating field—I am not runningout of ideas anytime soon.

And I'm busy with the launch of a newexecutive education program, aptly called"Strategic Marketing in Entertainment, Media,and Sports" in early June 2013, that promises tobe an exciting new way to disseminate theSchool's latest, groundbreaking research toexecutives in these sectors.

About the authorSean Silverthorne is Editor-in-Chief of

Harvard Business School Working Knowledge.

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