Leadership

Does a Coach or CEO matter?

When it comes to management, the answer is an unequivocal no.

Soccernomics, the beautiful book written by Financial Times Columnist Simon Kuper and University of Michigan Professor Stefan Szymanski, makes the convincing case that "it turns out that coaches and managers simply don't make that much difference."

When studying years of soccer matches, the authors conclude that "the vast bulk of managers appear to have almost no impact on their teams' performance and do not last very long in the job. They seem to add so little value that is tempting to think they could be replaced by their secretaries, or the chairman, or by stuffed teddy bears, without the club's league position changing. The importance of managers is vastly overestimated."

How can this be?

As a culture, we laud coaches and CEOs for their superior management skills. Give them diety-worth reverence. Put them on the covers of magazines, see them interviewed on television repeatedly, and even some nations elect them to the top government job. 

The Great Man Theory of History happening in real-time.

What really matters are the players and the employees. The market makes this clear.

Johan Cruyff, the famous Dutch international soccer player who went on coach FC Barcelona to four straight La Liga titles and a Champions League title, said simply, "If your players are better than your opponent, 90 percent of the time you will win."

Those that can perform a specific task repeatedly, with few flaws and consistent enthusiasm are treasured and well compensated by the market. Often there is a shortage of the best talent, and there is massive competition to secure their services. 

You see, soccer teams have perfect market information on thousands of players. It is clear who on the pitch can play and who can't. Either you can play soccer, or you can't play soccer. Either you can perform the task at hand, or you can't.

Soccer players more or less get the job they deserve.

However, when it comes to coaching this is not the case. The market for managers does not work well. Many of the best managers rarely get proper attention while numerous managers who add no real positive value continue to get promoted to better-paying jobs.

You see this off the pitch as well.

According to a Wall Street Journal analysis of data from MyLogIQ LLC and Institutional Shareholder Services, among S&P 500 CEOs who got raises last year, the 10% who received the most significant pay increases scored—as a group—in the middle of the pack in terms of total shareholder return.

Similarly, the 10% of companies posting the best total returns to shareholders scored in the middle of the pack in terms of CEO pay, the data show.

Quoted in the Wall Street Journal, Herman Aguinis, a professor of management at George Washington University School of Business, reinforces this point, “Stars are often underpaid, while average performers are often overpaid.” 

The disparity between CEO compensation and performance appears to persist over more extended periods as well. Professor Aguinis analyzed the earnings of more than 4,000 CEOs over the course of their tenures against several performance metrics and found virtually no overlap between the top 1% of CEOs in terms of performance and the top 1% of highest earners. Among the top 10% of performers, only a fifth were in the top 10% in terms of pay.

On and off the field more coaches and CEOs are more sun god and head of public relations, less visionary executive. 

The forte of best-paid coaches and CEOs is often not winning matches or generating more revenue, something frankly they have little control over, but keeping all the various constituencies united behind them. Hence why as a culture we frequently prize charisma over competence.

Chris Tomlinson, a business columnist for the Houston Chronicle, penned recently, "There is also no shortage of CEO candidates and little competition for them. Few companies need CEOs with unique skills, and boards tend to buy charisma rather than skills anyway. The general economy and market forces within an industrial sector are far more accurate predictors of a company’s performance, regardless of how much the CEO earns."

All of that being said, I do think thought leadership and vision matter immensely, regardless of how it pays.

Leadership is different from management, but that's for a separate post.

-Marc

Marc A. Ross specializes in global communications, thought leader management, and event production at the intersection of international politics, policy, and profits. Working with senior executives from multinational corporations, trade associations, and disruptive startups, Marc helps business leaders navigate globalization, disruption, and American politics.

Take the time to get your 50 mission cap

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A fifty mission cap was a stiff cloth cap with a visor issued to Allied bomber pilots in World War II when they had completed fifty missions. 

After fifty missions, the pilots were known to weather and beat their cap into a more rugged and worn look. Cheating death and pushing the envelope makes one want to display a roughness and not wear a stiffer and newly issued flight cap.  

These worn and personalized hats obviously made these pilots more identifiable and therefore more respected by the rookies. 

The cap was thus a status symbol.

A symbol that you had the knowledge.

A symbol that you had the experience.

A symbol that you had the professionalism.

Junior pilots were known to work in their caps to look like a fifty mission cap. They too wanted to appear that they had more than they did.

Sure you may have the cap, you can work it in to look like that, but that doesn't mean you have the knowledge, experience, and professionalism.

Not all us can have a fifty mission cap for the simple reason such a cap requires, time, experience, and commitment.

Most of us want the cap as soon as possible.

But why?

The journey is needed. 

Most overnight successes take decades. Most artistry is gained by failure. Most skills are gathered by doing the reps.

Sure the journey has stress. Sure the journey has unknowns. Sure the journey has complications.

But at the end, you're a different person. You get the fifty mission cap. You earned it.

The journey takes you beyond, propels you to achieve more, and contribute to others along the way. 

The journey is needed.

The challenge as entrepreneurs and thought leaders is to find a journey worthy of your heart and your soul.

That's when you want to put the cap on.

-Marc A. Ross

Marc A. Ross specializes in global communications and thought leader management at the intersection of politics, policy, and profits. Working with boardrooms and C-Suite executives from multinational corporations, trade associations, and disruptive startups, Marc helps leaders create compelling communications, focused content, and winning commerce.

Term limits: Who needs them?

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This weekend some 3,000 delegates gathered in the Great Hall of the People in Beijing as part of the National People’s Congress (NPC). The NPC is China's annual rubber-stamp national legislature under strict control of the Chinese Communist Party.

The NPC voted almost unanimously to approve an amendment to China's constitution to abolish the term limit on the presidency, opening the way for Xi Jinping to rule indefinitely.

With a vote of 2,958 votes in favor, two against, three abstentions and one invalid ballot, the 35-year-old line in China's governing document limiting the president to two consecutive terms was removed.

A few thoughts on this move to consider:

There is no President in China: In the must-read book The Party by Richard McGregor, he goes to great lengths to explain there is no "President" in China. It is a word that has been hijacked by the Chinese Communist Party to appease Western diplomats and soften how foreigners see the rulers of China.

The New York Times reports, in China the political job that matters most is the general secretary of the Communist Party. The party controls the military and domestic security forces and sets the policies that the government carries out. China’s presidency lacks the authority of the American and French presidencies.

The newspaper goes on to say, China’s president is called “zhuxi,” which translates as “chairman.” Foreign presidents get a different title, “zongtong.” So in effect, Chinese people are referring to Xi as the “state chairman,” though in English his title is officially translated as “state president” to put him on an even footing with other world leaders.

The way the world comprehends the Middle Kingdom (frequently too often based on how we see and interact with our American government) has caused the Chinese presidency to become increasingly prominent thanks to China’s growing global stature. At home, Xi usually speaks as party leader; abroad, he appears as president, who is the formal head of state ensuring the prestige of state visits to the White House or Buckingham Palace.

No lame duck in Beijing: As posted earlier this month, markets have welcomed China’s plan to change its constitution. Many business analysts say the political certainty should be mostly positive for Chinese assets and global business in the short term. The move bolsters the Xi’s ability to drive through policies, such as deleveraging, proper economic reform, and anti-pollution campaigns. 

There is no doubt Xi needs more time to reform and improve China - as well as build the China Dream (whatever that means). Frankly, the Party has done well improving the quality of life for many Chinese, but it has done all it can under the current economic model. 

China needs a new plan, a new mission, and more competition to become a genuinely world-class economy and country. This will take more time. Just like we have special interests, factions, Blue and Red state voters, so does China. Politics across the globe remains the realm of doing what is possible and leading diversified coalitions. So Xi is telling his country and the world he needs at least ten more years, and not only five more years as a lame duck leader.

Two decades on top with an adjective: A top leader can probably efficiently govern for 15 to 17 years. The French president can lead for a total of 14 years, and even Americans picked FDR to win four presidential elections. Where the real problem comes into play is when a nation's top leader starts approaching years 20 and on and when feelgood adjectives like great, supreme, and wise are added before leader's name. 

When this occurs, you are going to experience more problems internally and externally. The absence of checks and balances and inability to keep factions at peace, no doubt raises the risk of policy errors and making too many financial moves solely for political, faction pleasing reasons, and not sound business and national reasons. As we have seen around the world, staying in the big chair for too long rarely ends well for the occupant and places the country under much distress.

Not a clueless dreamer: China's state-managed news media have said that Xi wants to abandon the term limit so he can keep his trinity of leadership posts. Xinhua reports, having a term limit on just the presidency is unreasonable because neither of Xi’s other two major posts — party leader and military chairman — has a similar ceiling. Xi seems determined to remain “three-in-one” leader because he sees himself on a historic mission to make China into a great power believing achieving this ideal will take more than a decade - if not longer.

People’s Daily said earlier this month that ending the presidential term limit does not “imply a system of lifelong leadership.” The point seems to be that while Xi may be around for a while, he won’t be another Mao, who remained in power even as he grew ill and incoherent with age.

I realize this is optimistic and requires the mindset of an enlightened statesman - but it would be foolish not to take these viewpoints into account. China's leadership has well telegraphed the need for a leader to have more than two terms for years. This decision didn't just happen on this weekend. No one can deny China is overwhelmed by emperor culture, burdensome bureaucrats, and special interests who have won using the past model are unlikely to give up their gains without being pressured.

The two who voted against: If I were to make an educated guess, the two votes against this idea were cast by Xi Jinping and Li Keqiang. Governing China looks tough for those in power, but there is always someone in the wings ready to sit in the big chair.

Marc A. Ross specializes in global communications and thought leader management at the intersection of politics, policy, and profits. Working with boardrooms and C-Suite executives from multinational corporations, trade associations, and disruptive startups, Marc helps leaders create compelling communications, focused content, and winning commerce.