Realising the leadership premium in sports business

On the pitch, effective leadership is easy to see in action. The impact is marked with trophies won and strong team spirit is often heralded as a key contributor.

Off the pitch, often seen as intangible and immeasurable, strong and effective leadership from owners, investors, c-suite, and heads of divisions sets a legacy. It cultivates a culture of success, attracts top talent, drives financial sustainability, secures investment, and builds loyalty across the organisation - from the boardroom to the fanbase.

Within the context of a highly complex and uncertain world, and as the football market evolves - new governance and regulation, increased investment, and the growth of the women’s game - continuously nurturing and developing organisational leadership is crucial.
 

The football leadership focus
 

Football holds profound cultural significance, deeply embedded in communities and carrying the immense emotional weight for fans. The increasing influx of capital into the market presents an opportunity for effective leaders to foster stronger connections with fanbases and cultivate loyalty. Leaders must strike a crucial balance between driving business growth whilst maintaining authenticity and engaging meaningfully with their supporters and communities.

Leaders in football must provide a level of transparency not seen in other industries, inviting fans to become active participants on the journey. Without this open approach, clubs risk alienating the very fans who make the game so special. Empathetic leadership is essential, recognising the significant responsibility inherent in guiding such a powerful cultural asset.
 

Leadership capabilities and the demands of the modern sports landscape
 

However, a great team, not individual leaders, drive collective success.

Starting with igniting an effective leadership system, sports leaders may consider whether their team aligns with the Six Conditions of Success derived from The Leadership Code™ by Deloitte:

• Clarity: Does your leadership team provide a clear vision and assigned responsibility across the organisation? On-pitch strategies can win or lose games, and it is no different for front office leadership.
• Connected: Is your leadership team aligned, or do internal relationships hinder progress?
• Capable: Does the leadership team have the right composition and skills to achieve the long-term vision and goals?
• Curious: Is the leadership team open to diverse perspectives and willing to challenge conventional thinking? How is leadership using data to learn from success and failure internally?
• Confidence: Are leaders setting the tone of confidence that underpins success in the boardroom and on the pitch?
• Coherence: Does the leadership system have the necessary processes, governance, data, insights, and technology to succeed?

Meeting these conditions signifies the "Leadership Premium," in which organisations are better able to adapt and respond effectively to change and new opportunities.

Deloitte's analysis of this Premium reveals that companies perceived as having effective leadership can be worth up to 35%, more than those with ineffective leadership, a rather significant boost to the investment case.

As more capital continues to flow into football, investors are increasingly looking to de-risk the investment process and evaluate the club leadership of the organisation.
 

Assessing leadership
 

Alongside informing investment decisions, understanding a leader's strengths provides a basis for scenario planning and insights into the organisation's future potential. If navigating the implementation of new regulations, for instance, appointing a leader that is proven to be high in resilience and confidence in managing complex situations could provide a strategic advantage.

Diagnostic tools can provide data-driven insights into individuals' leadership attributes such as their adaptability, reliability, and resilience. Interviews can delve deeper into aspects of 'under pressure' such as how a leader performs know how.

The chemistry and connectedness within a leadership team, which can significantly impact its ability to succeed, can also be assessed. Understanding team dynamics, individual behavioural styles, and how to leverage both similarities and differences fosters connection and trust. Deloitte's Business Chemistry tool provides analytical behavioural insights that codifies leadership styles across a team. Understanding their interplay helps improve communication, conflict resolution, and effectiveness of decision making, just like a coach needs to know when to push or nurture his or her players, it is key to the performance of a leadership team to understand these qualities in each other.
 

Maximising returns through the Leadership Premium
 

Leaders surveyed in Deloitte's 2024 Future of Sport report pointed towards the evolving global sports market as the key force shaping the industry. The need for agility and innovation from leadership will be crucial to staying relevant and maximising opportunity.

As custodians of the future football landscape, leaders drive growth and development. A clearly defined vision - their leadership legacy - enhances clarity, predicts long-term effectiveness, and builds shareholder confidence. In this fast-paced industry, a defined vision and strategy anchors decision-making under pressure, reminding leaders of their purpose and rationale.

European football's future can be strengthened by good club leadership. The sports industry must professionalise its leadership recruitment, selection, and development processes. Why leave one of the biggest factors of your success to chance, when you can measure your executive leadership potential, de-risk the investment opportunity, and maximise your "leadership premium" for enhanced on- and off-field performance?