Tuesday, October 21, 2014

Arsenal after Arsène

This month Arsène Wenger marked 18 years as manager of Arsenal Football Club, an extraordinary tenure in professional sports. He's been in charge for 1,023 Premier League matches, while the next longest-serving manager, the embattled Newcastle United boss Alan Pardew, has served only 171. In the relatively near future, though, Wenger will depart.

This eventuality seems to be dawning on club officials. "The biggest challenge we're going to face as a club is that, when the transition from Arsène to our next manager happens--and I don't know when that's going to be--that we come through that strongly," CEO Ivan Gazidis said in a recent interview on the Arsenal website.

Is succession actually the "biggest challenge"? Bigger than competing with the financial might of Chelsea, Manchester City, and Manchester United? Perhaps not. Those issues are structural, will exist regardless of who manages Arsenal in 2017 and beyond, and indeed raise the stakes of the appointment.

For that reason, a thoughtful, thorough plan is essential to guide the club through this important period. This article explores the Board's public pronouncements on the issue and outlines what we should look for as evidence of an effective succession plan.

The Arsenal Board's readiness to plan and to act

The close of the 2013-14 season should have energized the Arsenal Board and Gazidis to intensify succession planning. That's because credible reports suggested that Wenger was prepared to decline the renewal offer had his team not won the 2014 FA Cup. Gazidis's comments at the time showed that the club was in no way prepared for that possibility. (See my personal blog post "And All the Clocks Wound Down".)

So far, the Board doesn't appear to be bringing much urgency to the task. At Thursday's Annual General Meeting of shareholders, Chairman Sir Chips Keswick said, "It's premature to speculate about a successor to Arsène. I'm delighted he has signed a three-year contract. Rest assured, we follow the situation carefully... It's not being complacent--we think about it all the time--I hope when the time comes we will have a solution that pleases you."

I'd rest a lot more assured if the language coming from the board were more assertive. Instead of "we follow the situation carefully," Sir Chips should be saying, "we have launched a plan to guide our decisions."

Even if Sir Chips is only displaying English reserve, it's hardly a strong response to what Gazidis called "the biggest challenge." The approach seems instead to invite problems that befall many organizations in transition.

"They fail to recognize the need for a strategy for this critical business process, they haven't had great exposure to what other organizations are doing, and they haven't thought through what their organization should be doing given its unique set of circumstances." That's Scott Saslow, founder and CEO of a leadership development consultancy, who collaborates with Stanford University on research with senior executives. He could be describing Arsenal's leadership as it appears now.

What would indicate a plan

That passive image is all anyone has to go on at the moment, because no one at the club has detailed its approach to succession planning.

What would a prepared organization look like? According to Stanford Professor David Larcker and Stephen Miles, vice chairman of executive recruiters Heidrick and Struggles (page 14 of the presentation here), the steps an organization should take in succession planning include:
  • Add succession expertise to the board, particularly the person chairing the search committee
  • Think of the succession plan as a multi-person event also involving internal officials not promoted
  • Develop a robust succession architecture that covers time horizons from immediate emergencies to five years
  • Develop and refine a skills and experience profile
  • Use external advisers to assess candidates and work closely with the board
  • Prepare to move individuals off the current management team if they block the development of others
  • Expose internal candidates to the board
  • Engage in a confidential external search
  • Provide ongoing support to entire management team after transition
Using these guidelines, we can assess the club's preparedness. All the club's activities won't be obvious or public, but the Board could start by clarifying who is primarily responsible for the appointment. Is it the full Board, a smaller group, or Gazidis? That's a crucial question. Not only does the authority need to be established, but that individual's or group's experience with these kinds of transitions could determine the search's success.

Another important statement would address Wenger's involvement. Studies suggest he should definitely have a role, perhaps even as far as identifying a candidate within the organization, but his influence on the decision should be minimal. Too much involvement from the outgoing manager can produce successors like Manchester United's ill-fated David Moyes.

Need for a seasoned executive

The search that brought Wenger to the club in 1996 was, by most accounts, a one-man affair, planned and executed by former vice chairman David Dein. He is no longer in a position to shape the board's thinking on Wenger's replacement or to work his network on the club's behalf.

The current Arsenal Board falls short of the Dein standard of experience. It's accurate that Josh Kroenke, the newest member of the Arsenal Board, was president of  the NHL's Colorado Avalanche in 2013 when it let head coach Joe Sacco go and hired Patrick Roy. But that doesn't seem like adequate experience for a high-profile Premier League appointment.

(One interesting point about the Avalanche's signing of Roy: It came just after the franchise elevated longtime captain Joe Sakic to lead hockey operations. So there is precedent in Kroenke Sports Enterprises for hiring former players to serve in prominent, decision-making positions.)

Gazidis? He communicates extremely effectively, makes decisions methodically, cares about the club's future, and publicly acknowledges the enormity of the task of replacing Wenger. What neither he nor anyone else at the club has yet displayed is any urgency to set forth the principles and processes to guide the eventual transition. As a result, we're left to wonder  how prepared the club is.

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