Alex Ferguson on what sets leaders apart

Manchester United legend and venture capitalist Michael Moritz share their secrets

Alex Ferguson: “One of the pupils at Harvard said to me, ‘What do you know now that you wish you’d known 30 years ago?’ - and it’s communication. When I was younger I wanted to rule the world and do everything.”

Alex Ferguson: “One of the pupils at Harvard said to me, ‘What do you know now that you wish you’d known 30 years ago?’ - and it’s communication. When I was younger I wanted to rule the world and do everything.”

 

When Sir Alex Ferguson became a professional footballer in the early 1960s, he earned £16 a week (£300 in today’s money) in a sport that was a solid but unglamorous cornerstone of British working-class life.

By the time he retired as manager of Manchester United two years ago, after helping the club win 38 trophies in 26 years, his wages had swelled to at least £160,000 a week and football had become the world’s biggest live entertainment business.

United was at the centre of that transformation: the most successful club in the most lucrative football league.

Ferguson joined in 1986, the year of Crocodile Dundee, Chernobyl and the Big Bang deregulation of London’s financial markets. The club’s fortunes were faltering and its players had a reputation for drinking too much and achieving too little. It was owned by Martin Edwards, the scion of a Manchester meat-processing fortune.

It is now a public company listed in New York whose controlling shareholders are the Glazer family of Florida. It has an enterprise value of about £2.4 billion and annual revenues that are expected to top £500 million this year.

The foundation for its commercial success was built by Ferguson, whose near-pathological obsession with football - and with winning - is a case study in leadership. So perhaps it is not surprising that, still trim if ruddy-faced at the age of 73, he has found a second act in retirement as a business guru.

Ferguson’s new life started on a May morning in 2013 at his home in Wilmslow in Cheshire, a 25-minute drive south from Manchester United’s Old Trafford stadium.

“For the first time in 40 years I had breakfast with my wife, and that was amazing,” he says. “I was always out of the door at 6.20am or something. [This time] I put the news on. When you are married for almost 50 years, there is not much conversation, trust me. But my appearance there is very important. My presence is important.”

He had almost retired once before. In May 2001 he announced he would stand down at the end of the following season (“a terrible decision” he says now) before changing his mind a few months later. He was finally persuaded to retire when his wife, Cathy, lost her twin sister and closest confidante, Bridget.

“I always said to the press I wouldn’t retire: as long as my health was good, I would carry on. [But] when Cathy’s sister died it changed the whole thing because she was isolated, she was missing her and I think the sacrifice she had made all her life for me, I was doing something back,” he says.

He first spotted his wife at a strike meeting at the Remington Rand typewriter factory in Glasgow where he had been apprenticed as a toolmaker before deciding to fully dedicate himself to football.

“I quit engineering to [play] full time with Dunfermline and I knew I wanted to be a manager so I prepared to do it. I was coaching at 23 years of age, coaching young boys’ club teams, because there was no way I was going back into engineering.”

He admits that he was a largely absent father and husband. “My wife was prepared to accept that sacrifice, she was great. I know not every wife would do that, obviously, but she understood my obsession, she understood why I had to do it, because it was in me, it was in my blood and I was hooked on the whole thing - I couldn’t get out of it,” he says.

But he insists his life’s obsession ceased abruptly on his retirement. “I was going to look forward to retirement,” he says. “And the reason I looked forward to it was because I think of my dad: retired one week, cancer the next, died a year and three months later.”

Ferguson may have left management but he has avoided the fate of past greats such as Bill Shankly, his fellow Scot who was Liverpool’s greatest manager but in retirement felt frozen out by the club and restricted to watching from the stands or supervising kids playing five-a-side in the park. By contrast, Ferguson sits on the Manchester United board, holds seminars for football coaches for Uefa, European football’s governing body, and does charitable work for Unicef. He has also achieved something few other former managers have: a career outside the game.

In April last year, Harvard Business School signed him up as a lecturer for its executive education courses. The long-term agreement sees Ferguson speak a few times a year to students in different programmes, including one on advanced management, which charges $78,000 for a six-week course. The university’s newspaper described Ferguson as a “soccer chieftain” with “real world perspective”.

He also agreed to work on a book, Leading (published by Hodder & Stoughton) which distils his football experience into a series of management lessons. His unexpected partner in the enterprise is Sir Michael Moritz, former chairman of the venture capitalists Sequoia Capital and one of Silicon Valley’s most distinguished investors.

The two have taken very different career paths: Moritz was born in Cardiff and studied at Oxford before emigrating to the US and initially working as a journalist. But there are things in common, too. Both have been responsible for creating value in undervalued assets: Ferguson’s reign helped to transform United from sleeping giant to one of the world’s richest clubs. And it was in 1986, the same year the Scot began his time at Old Trafford, that Moritz made a similarly bold step, joining the fledgling venture capital industry in the early days of Silicon Valley.

Moritz does not claim to be a football expert. “I am an armchair football fan. I do not pretend to be a rabid fan. I think Roy Keane would call me a member of the prawn sandwich brigade,” he says. But, as the author of previous books about Lee Iacocca, who turned round Chrysler in the 1980s, and Apple’s co-founder Steve Jobs, Moritz says he is “an enormous believer in the power or the ability of an individual to do dramatic things with any organisation.”

Having watched Silicon Valley companies come and go, he was particularly interested in two things: how to build and maintain a winning organisation; and how to do it not just for a few years, but for decades.

“In Silicon Valley, as you know, companies may have a decade of prosperity but very few of them are able to perform at a very high level for multiple decades and continue to win,” Moritz says.

“And if you add another layer, which is to achieve great things over multiple decades under the same leader, I couldn’t come up with many examples.”

First met

Enter Ferguson. The pair first met eight years ago but it wasn’t until after the Scot had stepped down from United that they began to work together. They held their first meeting for the book in New York, at the Metropolitan Club on Fifth Avenue, where they drank a bottle of Stag’s Leap wine and sat on the balcony overlooking Central Park. “Red wine was the motif for these meetings,” jokes Moritz.

He found the no-nonsense Glaswegian, famous for giving his players the “hairdryer” by shouting a few inches away from their faces, very different from his public image, and was impressed by his curiosity for subjects as diverse as racehorses, piano-playing and American history, especially the civil war period. A top dog in football, Ferguson’s sympathies lie with the underdog. “The romance was always with the Confederates,” Ferguson says, “they were never going to win.”

The result, hopes Moritz, is a book that is as relevant for the head of a hospital as for a multinational business. “What Sir Alex has achieved is the difficult part of leadership, which is applying it every single day of your life. That is where most people trip up. They can’t do it.”

One revelation of the book is how Ferguson’s leadership principles radically evolved over time. The screaming Scot who kicked a boot in David Beckham’s face is self-aware enough to admit he made mistakes and changed his approach. “I always said to myself, ‘I’m manager of Manchester United, the biggest club in the world - the expectation is for me to do it right,’” he says.

But he concedes that sometimes he may have has been too ruthless. He recalls how he left Bryan Robson, still Manchester United’s longest-serving captain, out of the 1994 FA Cup final - and what would have been his final game for the club.

At the time, he explains, he did not want to be seen to be giving priority to Robson over other players who were still going to be at United the following year. Looking back now, he thinks he went too far.

“I should have shown more compassion to him because he was a fantastic player. Whichever way I was looking at it was the wrong way. I was better at it later.”

The ability to learn on the job and adapt is vital, says Moritz. “Really successful people in business, they’re like Sir Alex in a way, they didn’t go to school to learn about leadership, they don’t have MBAs. They follow their instincts and learn along the way, and I think Sir Alex would be the first to say that, in his 50s, he knew a lot more about management than he did in his 20s or 30s.”

Ferguson adds: “One of the pupils at Harvard said to me, ‘What do you know now that you wish you’d known 30 years ago?’ - and it’s communication. When I was younger I wanted to rule the world and do everything.”

Delegating

Only later did he learn the value of delegating some tasks to others. “[It was] the best thing I did, because when you’re in the middle of a training session, you’re only focused on where the ball is. When I stepped out . . . bigger picture. It’s not so much what you see all the time, sometimes it’s what you miss by doing that.”

There were some things that never changed. From the moment he arrived at Manchester United from Scottish club Aberdeen, Ferguson was determined to build a successful club from the bottom up. “I was going to develop the youth and build the foundation that created a club, a good club, rather than a good team,” he says.

He immediately set about hiring the scouts that would lead him to find the golden generation of 1992, Paul Scholes, David Beckham, Nicky Butt and the Neville brothers. And he sold older players to make way. “We had a fire-sale, we got rid of eight, nine players and brought five young players in, because I felt at that time that all these players had had their chance, they’d had their challenges, could they do another challenge? I doubted it.”

Control over these young charges was also crucial to Ferguson’s strategy. Once, he even showed up at a house party to tell them to go home to bed.

“I’ve seen it when a manager has not got the power to deal with bigger players, and I used to say to myself, ‘What kind of manager are you if you’ve not got the balls to sort these guys out?’ I never changed in terms of my attitude - if they step out, you punish them.”

Roy Keane, Ruud van Nistelrooy and David Beckham were among the leading players to leave the club after spats with the manager, although in the book he largely glosses over what were, at the time, seismic events.

An argument with the BBC over a documentary about the links that his son Jason, then a sports agent, had to the club, saw him refuse to talk to the broadcaster for seven years. His dealings with the media in general were often confrontational and he admits he disliked press conferences.

Ferguson’s desire for total control also meant that he was paid more than any of his star players, a condition he insisted upon in 2010.

“That took a while but I think it is important that if you’re managing Manchester United, you should be respected that way, that you’re the highest-paid person.”

He admits money became a bigger issue as his players’ salaries rocketed. The money in football had other effects, too. He continued to put his faith in young players but, increasingly, this meant paying vast sums. He paid £25.6 million for 18-year-old Wayne Rooney. “I was prepared to pay the money simply because at 18 he could only get better so the £25 million we spent - if we get 10 years out of him, it’s money well spent, right?”

Alongside control, he sought consistency. “When you are consistent, people who work for you know who you are. When someone changes all the time, it creates a sort of confusion in the camp, people saying yesterday he was wanting to go to the moon, now he wants to go to Mars. If you keep changing, I think it confuses your people.”

According to Moritz, “The consistency of having this internal desire to lead and excel and apply it relentlessly is where most people fall down.”

Above all, Ferguson wanted to win. Even today he rues the fact that Manchester United failed to overtake Liverpool’s tally of five European Cups. For him it came down to setting a simple, very high, standard.

“It was to help everyone else believe they could do things that they didn’t think they were capable of,” he says.

David Moyes

Conspicuously absent from the new book, however, is any analysis of one of the biggest problems facing companies with inspirational leaders: how to replace them.

Ferguson’s successor David Moyes was dismissed after just 10 months in the job. The current manager Louis van Gaal has been in place for 18 months but has plans to leave in 2017. A recent poll of more than 6,000 Manchester United fans through the Forza Football app found that 77 per cent believe the club would be in a better overall position if Ferguson was still in charge.

“Leaving is probably a bit like buying or selling a stock,” says Moritz. “There are only two times to do it, either too early or too late and it’s hard to get it right.” He points out that while there are examples of bosses who led their companies into the ground by staying too long, there are also those, such as Warren Buffett and Rupert Murdoch, who continue to be at the heart of their businesses.

He adds, to a smile from Ferguson, that Murdoch’s decision to bring Rebekah Brooks back as head of News UK is a “wonderfully touching demonstration of loyalty, even though I know it is politically incorrect to say so”.

Is it incumbent on the person who is leaving to get the succession right? “I think in all organisations, whether it was Apple when Steve Jobs [retired] or United, it’s not one individual,” Moritz says. “You have a whole organisation involved with making that decision.”

At Manchester United, Ferguson was involved in choosing Moyes. But with the pressure on United to stay competitive with other elite clubs, Moyes was never likely to be allowed the time that Ferguson had been given 30 years ago.

“We chose David Moyes because he was consistent in his job at Everton, he was a good decent man, he was a hard working guy, and for me that was the most important thing,” Ferguson says.

“I think he’s a good manager, David. It was unfortunate - they say that to follow me immediately was going to be the hardest task of all, and that the second man along will get the benefits.” Moritz echoes this. “Usually, if you’ve got a very strong organisation, the strong organisation will eventually thrive.”

For him, the key is for a company to appoint someone with their own firm ideas of how to run things. By approaching United as a club rather than simply a team, Ferguson achieved something no other football manager may match.

“The most important thing is to find somebody who will act like an owner,” is how Moritz puts it.

“Most people who inherit a job will try to do what they think others expect of them, rather than what they themselves think is the right thing to do.”

The ability to resist this is, he believes, “the difference between being a manager, and being a leader.”

- (Copyright The Financial Times Limited 2015)