Is the Real Madrid approach the best way to manage talent?
“The way a team plays as a whole determines its success. You may have the greatest bunch of individual stars in the world, but if they don't play together, the club won't be worth a dime.” Babe Ruth
It feels like we've been here before with Real Madrid, but the football world was stunned this morning when a whopping £80 million bid for World Player of the Year Cristiano Ronaldo was accepted by his club Manchester United. If the deal goes ahead if marks the second time this week that Real have broken the world transfer record, after splashing out over £50 million on Brazilian star Kaka earlier in the week. Both moves follow a similar pattern adopted by returning club president Florentino Perez, the building magnate that presided over the club in the early 00's. That period was made famous for the club signing a Galacticos each summer, starting with (another) record signing of Zinedine Zidane and followed up with the signings of Ronaldo, Luis Figo and of course David Beckham.
But does this strategy actually work?
And perhaps more importantly, are there lessons that can be learnt from it? If you look back at the first Galacticos era the answer is quite probably no. Whilst the club won the Champions League in Zidane's first season, and La Liga in his second, they failed to win either of these trophies again until 2006 when they won La Liga with a team minus Zidane, Figo and with Ronaldo and Beckham playing minor roles. Starkly the team have not won the Champions League since 2001 and last season were thrashed by Liverpool.
Yet Perez feels justified in replicating the strategy and has drawn up a shopping list of the world's best players in an attempt to bring the glory days back to the club. Contrast this approach however with their fierce rivals Barcelona, a team who swept all before them last year, winning La Liga, the Spanish Cup and the Champions League, winning plaudits from all corners for the style of their play. The side that Barcelona put out in the Champions League final contained 7 players that had come through the youth academy at the club.
Using the Barcelona model for managing your talent
Untapped talent is wasted talent. Where no effective talent management process exists, an organisation runs the risk of losing people with potential. Professional development is something that motivates and empowers an individual, leading to increased productivity and ultimately, a desire to stay put in the long term. There are numerous fine examples of this practice in place in the workplace.
Perhaps the most well known is at GE. Their leadership training centre at Crotonville, recently renamed after former CEO Jack Welch, is at the leading edge of leadership development and allows the company to take a long-term approach at developing its people to be the best. When Jack Welch announced his plan to retire they had the system in place to enable them to recruit his successor internally having groomed several candidates for the position.
How you can create a winning talent management strategy
- Formulate a long term plan - A Talent Management System needs to be put in place and embedded into a long-term business plan in order for organisations to successfully select, develop and retain talented employees.
- Work collaboratively - Your talent management system needs support from the very top and HR needs to be given a big priority within the business. Jack Welch compared the HR manager with the coach of a football team and the analogy is worthwhile when assigning priority to the department.
- Develop a culture and recruit within this - Barcelona are famous for their style of play and every player at every level of the club plays in the same style. The same is true of business. Your company has a style, a culture that underpins the way it operates. Recruit with this in mind and develop people to grow through your company.
- Become an attractive employer - Your culture will attract people to you. The very best companies have huge waiting lists for vacancies and the same is true for football clubs. Developing a culture that resonates and treating your staff well will help you to both attract and nurture the best. We live in a social age where people talk more readily and more widely than ever before. Marketing starts with your employees.
- Develop your stars - Identifying and nurturing stars is crucial to your business. Consider extensive training and development, give your stars responsibility, offer them a clear career strategy, provide mentoring and give them goals to aim for.
It's all about thinking in the long-term. Football is fortunate in the sense that it has plenty of fine examples to underpin this. Both Manchester United and Arsenal have achieved tremendous success by developing talent from within, both on the field and by allowing their managers time. Even my own team Everton (no sniggering at the back!) have achieved relative success by following this model. Contrast this with a side such as Newcastle who regularly chopped and changed personnel therefore developing a poor culture and a bad reputation as a club to go to. For me Real Madrid fall into this latter category and great doubt must be cast on whether they will achieve the success their president clearly hopes for.
So is your company a Real Madrid or a Barcelona?
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Comments
This is brilliant! i totally agree that there should be emphasis placed on developing talent rather than aquiring it at huge costs. It is a vital policy to have in place to ensure long term success which is what business should be all about.
What a great post!
I truly agree with everything you're saying...
A challenge could be - how do you encourage this culture within huge operations that have some senior leaders that believe and others that still place process and task driven focus as more important than developing people?
Thank you for such an interesting link from current world 'goings on' and business today! Very refreshing and given lots of food for thought!!
Kind Regards
Excellent post. You're spot on that people need to think long-term. Culture is very under appreciated in an organisation and managers that understand that culture have an in built advantage over those that are brought in from outside. You only get that knowledge through years of experience working in an environment.
As for changing a bad culture, I guess the only way is to move people on that aren't the right kind of people. It's very hard to teach an old dog new tricks.
I can only repeat what others have said about this post! TOTALLY agree Adrian! As Carly so rightly says - this is a challenge for organisations - but in my mind an effective talent management strategy is absolutely worth the effort it takes to set up.
Is football the best example to use? The clubs always seem so short-termist in their approach to things. Not really a good role model for business.
I suppose one thing to consider is revenue. Although the strategy didn't really do much for Real on the field, it's earned them a fortune off it and they now generate a very healthy profit each year.
Great discussion Adi and I completely support the sentiments of talent connected by teamwork over disconnected talent. Over the last year or so I have spoken to dozens of leaders and senior HR professionals to ask them about their philosophy on talent. They all agree that there has to be a talent-centred culture led from the top with clear direction and a uniform philosophy with processes pointing in the same direction. One of my interviewees was Octavius Black, CEO of Mind Gym. He was quick to say how 2+2 equals much more than 4. It is the joining up of talent that counts. If any manager or HR professional wants to see the videos of the interviews, just join for free at http://talentforum.ning.com - all CMI members will be welcomed.
I agree with Rob that a large part of this is to do with financials - the PR and sales of shirts etc will more than recoup the outlay and people will be able to 'see the stars' when they watch.
Of course it begs the question of how does Kaka feel now he is only worth 5/8ths of Ronaldo, and how do the others feel that someone is valued so highly compared to them? Is this the basis of building good teamwork?
On another point, even the 'best' role models do not only promote internally. There is a need sometimes for external talent to give a different perspective - although one should be careful not to rock the boat unless, of course, that is the intention.
There's also the problem with football that the manager has no "football boots" to speak of. He's not worried about developing tomorrow's talent because they don't pose a direct threat to his position.
In business, some people may be more wary of talent because that may threaten their position within the organistion?
A good manager should always try to make himself redundant so that he can move on to better things! The ones who fear talent coming up will inevitably end up being a poor manager and losing out in the long run. People see through these things.
Not condoning the behaviour for one minute, but I think we've always got to keep this in mind as not all managers are as virtuous as us (is that the bias coming through!?!).
Hi people!
Ray your comment is very current for me, as I was recently lucky to listen to a presentation made by the Global HR & Communication VP of GAP.
In the presentation she talked about how important it is for businesses right now to have managers creating successor plans.
She asked how many managers in the room currently had a successor ready to move into their role when they moved on to bigger better things and in a room of over 100 only one person raised their hand.
Fear is at its highest at the moment, especially in middle level managers... do these people have the skills to notice, develop and nurture talent? And if they do, do they then have the skills to look for and take the next leap in their career (and are the opportunities there for them)... a world class leader would... are today’s managers World Class I guess is the question? If not what impact could this fear be having on business results?
Hi Carly,
I completely agree with the sentiments at your recent conference but I think the results from a room of 100 people tells its own tale - 1% of managers in that room had succession plans in place.
Did the presenter discuss barriers to succession planning and was the audience surveyed on the reasons?
If good managers can spot poor managers failing to develop their reports, then why were 99 of the people at that conference still employed? Or is it that the companies are riddled with poor managers, therefore these gaps are not recognised?
I can't subscribe to the "good manager / poor manager" theory for that reason. There are undoubtedly some of the 99% in that room that both recognise the benefits to the organisation of succession planning and are capable of developing their direct reports but, for other reasons, have made a conscious decision not to impart information or develop skills.
Hi Colin, maybe some poeple just don't relate to formal succession planning because the company doesn't work like that but may still be developing their staff to get to the next level. Also some firms have policies that prevent promotion from within the same location - especially in Sales Management which would prevent the individual being involved in succession planning for their own job.
Thanks Carly - It is amazing isn't it. If they stopped and thought about it logically, how can they expect to be released to go on to bigger and better things if they haven't got anyone to replace them.
The old mentality of making yourself irreplaceable is self fulfilling and you end up stuck where you are.