Management Tenure and the Effect that Culture has on it

by Joe Sesso on June 7, 2018

Zinedine Zidane photo Real Madrid President Florentino Perez with Zinedine Zidane

I am a huge fan of the Real Madrid soccer team. I just watched them win their third consecutive Champions League title and their fourth in the last five years. For those of you that don’t know what the Champions League is, it is a playoff of the best club teams in Europe. The Champions League final is the Super Bowl of soccer, and Real Madrid is the best team in World. What shocked me was what happened after the game. Real Madrid’s coach, Zinedine Zidane, resigned as the manager, after only two and a half seasons at the helm (yes he won three titles in just 2 1/2 years). I couldn’t understand why he would leave so soon. Was he retiring after a long career of coaching? Hardly. This was Zidane’s first head coaching job and he is only 46 years old.

 

Most Americans, including myself, would be shocked by such a departure.¬† At his press conference to announce his resignation, Zidane said that he wanted to leave the club “on good terms.” Say what? This man had just led Real Madrid to its third consecutive Champions League title, something that no European team had accomplished in 42 years, and he was worried about leaving on good terms? I thought that the statement was preposterous, but it made me curious. Is the culture among professional sports managers different from that of American ones? And if it is, what about managers and CEOs in business? Does their loyalty and tenure differ between Europe and the U.S. as well?¬† I couldn’t imagine Bill Belichick of the New England Patriots saying that because he has only won five Super Bowls that he was worried about leaving the club on bad terms. He is a beloved figure in Boston that will always be remembered as one of the greatest coaches of all time. Belichick can probably go the next 10 years without winning a Super Bowl and he would still be secure in his job.

After doing some research, I learned that coaching tenure in Europe is much different than that in the U.S. The average tenure for a head coach in one of the European soccer leagues is less only 17 months! By comparison, the NFL in America¬† is much more understanding of their coaches, as its average head coach has a tenure of 4.3 years. Major League Baseball is 3.7 seasons, but this is still double that of a European head coach. It’s obvious that club owners and fans do not have patience in coaches to build a program. It’s a “win now or your fired” mentality, and it’s widely accepted across the continent. U.S. fans and owners have more confidence and are more understanding when it comes to building and/or rebuilding a program. So how does that translate to the corporate world? Studies show that it’s not as bad, but it is still significantly less time on the job for European CEOs than their American counterparts.

According to the Financial Times, the average tenure for a CEO in the United Kingdom is only 4.8 years. In the article, it stated that shareholders are demanding faster results over long-term success. “CEOs face an unforgiving business environment,” said Marco Amitrano, the head of consulting at PWC U.K., “fraught with social, political and technological upheavals.” As for their American counterparts? According to Forbes, it is 9.7 years, more than double that of U.K. CEOs.

So what does all this mean? It means that culture definitely plays a role in tenure. European managers and CEOs are under pressure to produce immediate results, even if it may not be the best strategy for the long term. Is this good for a company’s long-term health? It’s not, but it is a widely accepted practice in Europe. U.S. managers face a more forgiving environment, but that doesn’t mean they get a free pass. They have to produce some results or show some promise that their strategy is working.

As for Zinedine Zidane, it’s unfortunate that after winning three consecutive Champions League titles, that he would be worried about job security. As much as an organization like Real Madrid would like to win the Super Bowl of soccer every year, it’s not going to happen. If Zidane “only” would have led his team to the semi-finals next year, should he really have to worry about his job security? Absolutely not! Unless you’re Real Madrid, I guess.

I would love to hear your thoughts on this topic.

 

 

Sources: Business Insider, Financial Times, Forbes

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