Southampton and Everton are, according to a study by professional services firm Organizational Maturity Services, the best managed football clubs in the Premier League. Champions Leicester City rank 13th, while the league’s richest clubs, Manchester United and Manchester City, rank only 14th and 10th respectively.
Over the past decades, the Premier League has grown into a billion pound industry. The UK’s top flight today is the world’s richest football league and, as revenue generation is set to significantly increase yet again through new TV rights, the Premier League is set to distance itself even further from European counterparts.
In the slipstream of footballs’ commercial boom, the role of finances as a means to success on the pitch has becoming increasingly important. As club budgets – and hence player budgets – play a growing role in determining the likelihood of winning silverware, clubs are increasingly indulging in a range of commercial outings, and with juicy returns looming around the corner, clubs have also become investment vehicles for wealthy investors.
There are, however, more ingredients to football success than just money. This season provides arguably the best example since the launch of the Premier League in 1992/93 – 2015/16 champion Leicester City FC seemingly emerged from nowhere as rank outsiders who confounded all of the conventional football pundits, staying ahead of much richer clubs such as Manchester United, Chelsea, Arsenal and Manchester City. One of the ingredients that stands at the heart of a club’s fortunes is the quality of leadership and management, as well as the governance in place that navigates a club through successful decision-making.
According to a new study by Organizational Maturity Services (OMS), a London based research and consulting firm, there are quite large differences in the way English football clubs are run. Based on a so-called ‘Organizational Maturity Index’ (OMI) the firm developed – a model that assesses how effective the human capital of clubs is deployed – the consultants ranked each Premiership club (using a 22-point scale from D to AAA) on quality of leadership and human capital management capability. The researchers found that, across the board, most Premier League football clubs remain, despite the growing stakes, poorly governed in terms of overall management quality. “Overall, there is a general lack of coherence between organisational purpose, strategy and management practice. This incoherence undermines long-term value and means that there is significant latent value currently being unrealised,” comments Stuart Woollard, Managing Partner at OMS.
Woollard says Manchester United and Arsenal serve as prime examples. Despite being the wealthiest club in the league, Manchester United is run with “strategic incoherence” as global branding and revenues have become the club’s “core focus.” In the case of Arsenal, there is little evidence that the club has systemically embedded much of what team manager Arsène Wenger has brought to the club during his long tenure, and, as a result, Arsenal may have to spend significantly to fill important gaps after Wenger’s departure.
Southampton comes out of the analysis as the best managed club in the league. The club is, according to the researchers, driven by core football values, has an organisation in place that operates as a “coherent and cohesive system” and portrays strong characteristics of a learning organisation. Everton ranks second, followed by four football teams in joint third spot: Arsenal, Swansea, Crystal Palace and Tottenham. Leicester City only ranks 13th on the list despite its shock Premiership win, but the study still gives credit to the club for not taking unnecessary risks and adopting “accurate methods of predicting and planning” for the future. Aston Villa and Newcastle score lowest in the OMI index.
Looking ahead, Woollard says that clubs face considerable room for improvement, and, if they manage to capitalise on the potential, they may see millions in additional returns flow back into their operations. The Premier League’s best performing club, Southampton, are rated A, leaving 5 maturity levels for further improvement, “in this respect clubs still have a long way to go,” concludes Woollard.