Sunday, 07. January 2018

From head sheds and central functions to fluid organization

The world of work in the future will be organized in a fundamentally different way than it is today. This will also effect how professional soccer operates.

Work will no longer be limited by office buildings, borders and time zones. Organization of professional clubs will also become more permeable, with essential value creation taking place in interdisciplinary projects, in which areas of responsibility “flow” into each other. Central routine tasks and support processes will be outsourced to cost-effective shared services pools (payroll, financial accounting, contract management, etc.), some of which will be shifted to low-wage countries. Project-related specialist activities will be bundled in centers of expertise such as strategy & corporate development, finance & controlling, legal & compliance, public & investor relations, and human resources & administration.

Strategy & corporate development will have the task of defining strategic guidelines for the control of the professional club from an overall perspective and preparing them for the chief decision makers. This will involve systematic monitoring of competitors and changes in the market (so-called competitive intelligence). At the highest level of management, experienced consultants will develop proposals for which areas of business professional clubs should get involved in. For instance, does it make more sense to invest money in the development of an e-sports unit or in flagship stores abroad? These advisors will ensure that an overall view of the portfolio of the club’s activities is maintained. Experienced business developers will then identify new opportunities and help build new businesses until they can be transferred to the new business area of the professional club.

In the future, experts from finance & controlling will deal not only with the impact of player or coach transfers on the income statement and balance sheet, but also with potential failure risks and implications on compliance with financial fair play. The external financing of players will also take on greater importance. Former investment bankers will design and issue investment products to finance player contracts via crowdfunding from fans (e.g. or external investment companies (e.g. private equity firms such as KKR) or hedge funds (e.g. Hero Investments). Finally, new forms of lending transactions will be securitized and new investment models for external investors will be developed.

As in cloud computing, in the future professional clubs will also develop in their organizational structures towards the dynamic model of the so-called human cloud. It will then fall to the HR experts of professional clubs to build up this human cloud and make it available as an international pool of experts for part-time engagements and internal projects. This will require not only rigorous quality management, but also the systematic use of talent management and staffing tools. Therefore, a substantial part of the demanding tasks of the club will be performed by external project staff, agencies, consultants and partner companies which are closely integrated into the business processes of the professional clubs. Only those professional clubs that manage to gather the right talent at the right time and in the right place will be successful.

Leading a professional club with fluid structures will mean constantly questioning borders and barriers within and on the periphery of the club and thinking about processes not in terms of discreet parts, but rather moving toward interdisciplinary teamwork. Roles and responsibilities will be redefined based on the project. A current example is Bayern Munich’s “Internationalization” department. Under the direction of a board member and a relatively small core team, representatives of internal departments (such as “merchandising and licensing”, “new media, media rights and IT”) are matched up with external experts in project teams to promote dedicated regional growth initiatives. Who takes the lead on which topic is determined based on the thematic focus of the project and not on the hierarchical level, but rather on professional competence.

This has largely replaced the traditional middle management role of the departmental level in Bundesliga clubs; the interface managers and controllers of today will become relationship managers and coaches. It will be their responsibility to ensure cooperation and networking between employees across departmental and division boundaries. The new challenges to the leadership of professional clubs indicate that we will see a different breed of decision makers than we have today. The issue of education and training will take on a particular significance in the area of leadership. Of course, in the future competence in soccer will remain critical to staying competitive on the field. But in addition to what happens on the field, management competence and specialized expertise will be needed for clubs to hold their own against competitors in the entertainment industry.

By Prof. Sascha L. Schmidt