Lessons from Leicester

Everyone seems to be trying to draw lessons from the remarkable victory of minnows Leicester City in the English Premier League. So I’ll try too.

Firstly, what a triumph and vindication this is for sport and sports fans everywhere. Success against the odds warms the heart and offers hope. It is especially good to note that the fans themselves probably made the difference for Leicester, creating a unique atmosphere in their stadium worth a “twelfth man”. I’ve supported West Ham United for fifty years, during which time the line from the club song “Fortunes always hiding” has invariably been apt. Yet every so often fate shines kindly on us, and the joy makes it worth the wait, and indeed I would wager is deeper joy than fans of big clubs ever experience. West Ham have offered plenty of joy in the season just ending, thanks in part to the brilliance of Dmitri Payet on the field and Slaven Bilic off it. I love watching sports, I love supporting clubs in sports, and I recommend it heartily to all sports sceptics.  Go Mets, Patriots, Hammers and all my other teams!

The next message is about bookmakers. Leicester were priced at 5000-1, which means that they thought that the league could have been played with just twenty teams every year from Moses until the present and Leicester would have won it just once. Isn’t that ridiculous? Even half way through the season, when Leicester were already in the leading bunch, odds of 1000-1 were offered. I did some simplified maths. For a team to have a one in five thousand chance of winning the league, their probability of relegation at the start of the season would need to be about 40%. If relegation odds were about 4-1, then odds to win the league should be 500-1 or so. At the start of the season, no team that is not in operational disarray should have relegation odds much above 4-1. So the bookies made a mistake. My lesson is that this happens, so very occasionally betting is not such a mugs game as usual. Unfortunately, they won’t make that particular mistake again, so we have to look out for the next one.

Another message is about noting the factors that were important in the win. Ranieri did a good job, but without denigrating him at all, actually managing the spirit of a group that is winning is much easier than when the team is losing – that is the main value of momentum. For me, one team that really earned their success was the medical team. Leicester have a small and shallow squad, and had phenomenal good fortune with a lack of injuries through the season. Do their medical team have any secrets beyond good luck? It would be worth trying to find out.

Leicester is a great example of finding different ways to win, and how styles need to continuously adapt. Most of the top teams try to win by dominating possession, a style perfected by Barcelona. But Leicester do almost the opposite. They are happy to let opponents have the ball and set themselves up as a fortress to defend. Then when they finally win the ball they counter-attack with pace, while the opponents are out of defensive alignment. It is a brilliant use of the resources available, and no doubt in future seasons many will attempt to emulate this style.

This last point has many lessons for businesses. First, there are many ways to win, don’t just copy the crowd or perceived good practice. Next, fit your strategy to your available resources, and pursue it relentlessly (though taking account of competition). Finally, be careful with KPI’s. Time of possession is measured in soccer as a useful indicator, but Leicester would have finished almost last in the table if it were a flawless predictor of results. KPI’s are useful, but need constant questioning.

My main point is also relevant to business, and it is about diseconomies of scale. I have long held the view that in most sectors outside manufacturing, scale beyond a certain size brings more burdens than benefits. I’ll try to use Leicester as an example.

Even ten years ago, soccer clubs were hopelessly unprofessional. The team tactics and training were OK (at least once Wenger started the revolution of fitness and no alcohol and so on), but what lay behind the team was run on a shoestring except in a tiny minority of clubs. Scouting was often a part-time job of an ex-player with few relevant skills or training, sometimes given the job as a favour. Few games were watched, and use of statistics was minimal (credit where it’s due, Sam Allardyce was one of the first to see this opportunity).

Apart from traditionalism, the main factor behind this was money. Only Man U and a few others could afford to dedicate any resources to things like scouting; even those others who were good enough could not dream of attracting established good players on their budgets anyway. In this age of unprofessionalism, scale was a clear advantage.

In the last twenty years, that has all changed. TV money means every top-flight club can afford to be professional in all aspects of running a club. Not all have actually taken the opportunity yet, but increasingly many have. For those (like West Ham) who have become smarter, this has levelled the playing field to some extent. Outside the very top rank of player, who still gravitates to the exorbitant money of the top few, West Ham now has a chance of spotting talent and persuading it to join.

So the first team of Man City will still be better (in talent terms) than West Ham’s, but nowadays the top teams play so many European matches that they need two teams, and their second batch will be no better than ours. If we are lucky with injuries, for most games there won’t be much of a gulf.

Then, does talent always perform? In a tight-knit set up, it often will, week after week, as both West Ham and Leicester have proven, they have spirit and teamwork and momentum. Too many players in the top teams are either not getting enough football, or are getting two much ego-stroking and not enough sweat. Look at Nasri or Walcott, usually injured or moaning or show-boating or generally failing their teams. And the poor chief coach has to manage these egos as well as the relentless media and the labyrinthine layers of power within his club, so it is no surprise that the tactics against some mediocre team are sometimes inadequate.

All of this shows that scale as far as professionalism is of benefit, but subsequent scale can be counter-productive. This year the top teams have all had a degree of dysfunction, while three or four less fashionable teams have played to their true potential – Southampton are another good example.

The top teams are not doomed to lose, indeed they will usually win, since they still have a monopoly of the very top talent. But I suspect it will become more common for surprises to occur, though perhaps not again of the scale of Leicester’s amazing triumph. Look at the Champions League qualifiers over the next few seasons, I predict there will be one surprise per year on average. The game is all the better for it, and the joy of being a sports fan will never die even if I’m wrong.