Sports Convergence with Business - What We Learned from the Rugby World Cup
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WHITE PAPER • 30 OCTOBER 2015 Sports convergence with Business - What we learned from the Rugby World Cup Rugby World Cup Winners Michael Lynagh and Kyran Bracken, with DHR International’s Managing Partner Alex Bennett, explore what elite sport can teach the business leaders of today. Copyright © 2015 DHR International, Inc. All Rights Reserved. 1 The elements of sporting success – such as team culture, leadership, and decision-making, among others – are present in every champion team, regardless of sport. Excelling in these areas is what unites the teams that win and keep winning: Manchester United under Sir Alex Ferguson, the all-conquering All-Blacks in rugby, the 1990s Chicago Bulls of the NBA, these are all examples of teams with sustained periods of success from across the sporting world. But these elements are not unique to sport. They are also among the critical elements of success in business. In this research report, we will examine what the world of business can learn from the most successful teams in the sporting arena, with the help of a group of individuals who have experienced victory in both. Michael Lynagh was fly-half and vice-captain in Australia’s 1991 Rugby World Cup winning team, and later captained the team from 1993 to 1995. He was a key player for the Wallabies through one of the most successful periods in their history. He retired from test rugby in 1995 as Australia’s leading international points scorer, a record he still holds 20 years later. Since retiring from the game, Michael has transitioned into a very successful second career in commercial property. Having suffered an unexpected stroke in April 2012, Michael detailed his inspirational recovery in his memoir Blindsided, published in September 2015. Kyran Bracken played scrum-half for England on 51 occasions, including four appearances in the team’s Rugby World Cup-winning campaign of 2003. Kyran was a key member of the Saracens team known as the "Galácticos" a team built by Nigel Wray at the dawn of professionalism that was regarded as the Real Madrid of rugby. He went on to play more than 120 club games at the highest level for Saracens. Kyran has also built a successful second career after his retirement in 2006. He now spends his time running Hybrid Houses, a timber-frame home construction business. He also became a celebrity beyond the world of sport by winning ITV’s Dancing On Ice in 2007. Copyright © 2015 DHR International, Inc. All Rights Reserved. 1 . Alex Bennett is Managing Partner with DHR International where he leads the Global Medtech, Devices & Diagnostics Practice and is co MD of the London office. Formerly a back-row for Saracens, Orrell and Brive, achieving International honours with England A and representing the Barbarians, Alex was a teammate of Michael and Kyran in the late 1990s. Having built and sold a successful Medtech business after retiring from professional rugby, he transitioned to executive search where his career has continued to flourish. Alex suffered a broken neck in February 2012 whilst preparing for a charity legends match, leaving him completely paralysed. He walked back into the office just 6 months later, having been supported through his rehabilitation by the entire rugby community. In October 2015, DHR International invited Michael, Kyran and Alex to give their insights into what the business community can learn from elite sport, and what lessons they have taken from the rugby field and applied successfully in their business careers. This paper will focus on three key areas: culture, succession planning and decision- making. All three of these are central focuses of DHR International’s strategy in executive search – a strategy that has led to DHR International becoming the sixth-largest executive search firm in the world. Culture For a senior executive joining a global organisation, there are two substantial challenges to be faced. First, a senior executive must have the strength of character, leadership skills and vision to be able to ‘put their mark’ on the organisation, and drive transformation. Secondly, and almost in contradiction to this, they must be able to understand the existing culture of the country and the organisation itself, and be flexible enough in leadership style to avoid offending immutable cultural expectations. Eddie Jones and the underdog miracle The situation for sporting leaders is virtually identical. Both Michael Lynagh and Kyran Bracken raised the example of Eddie Jones, coach of the Japan rugby team. The Tasmanian son of a Japanese-American mother and an Australian father, Jones rose to prominence as a coach of the Brumbies in the Australian Super 12, leading them into the most successful period in their history. He then coached Australia from 2001 to 2005, including the narrow loss to England in the 2003 Rugby World Cup final in Sydney. Jones gained a reputation for being a forceful, almost autocratic leader – one who could bring the very best out of his players, but who also clashed with colleagues and management on several occasions. Copyright © 2015 DHR International, Inc. All Rights Reserved. 2 Since 2012, Jones has coached the Japanese rugby team, one of the true underdogs of world rugby. Despite some positive results against other Asian opposition, prior to Jones’ appointment, Japan had failed to win a game at a Rugby World Cup since 1991. On taking over as head coach, Jones said that Japan had to develop a style of play that would allow them to win games against upper-tier international teams like Wales and Scotland. Three years later, on September 19 2015, Japan stunned the rugby world by beating titans South Africa, winners of the Rugby World Cup in 1995 and 2007. The 34-32 win in Brighton has been described as the biggest upset in rugby union history. Michael, Kyran and Alex say that Jones’ biggest achievement as Japanese coach was blending his own leadership style with the expectations of the Japanese players, giving them the opportunity to reach their potential as a team. Says Alex Bennett: “Eddie Jones is known to be extremely detail focused and manages both the macro and micro elements of his team’s execution with obsessive levels of precision – he gets involved with almost every aspect of the team. As it turns out, he recognised that was exactly what Japanese rugby needed – his style and the culture of the Japanese people and their team was very much aligned.” “The Japanese players really took to Eddie’s leadership style, and he led them to achievements that I doubt even they thought were possible.” Adds Michael Lynagh: “With a Japanese mother and a Japanese wife, Eddie knows Japanese culture inside out, and he knew exactly what he needed to do to get the players to respond to his style.” “Speaking the language was also an enormous advantage for Eddie. You take communication problems out of the equation, and it allows you to focus on driving improvement. Carlos Ghosn – unlikely cultural icon When placing senior executives in global businesses, it is critical to take the same factors into account. In particular, when the difference in culture is significant, an executive must be able to take the same approach as Eddie Jones, and take into account the prevailing local culture when making leadership decisions. Copyright © 2015 DHR International, Inc. All Rights Reserved. 2 In May 1999, French car maker Renault took a 36.8% stake in Japanese rival Nissan. The first senior executive from Renault to join Nissan was Carlos Ghosn, an Executive Vice President who had, until that point, headed up Renault’s South American division, as well as taking responsibility for purchasing, advanced research, engineering and development, powertrain operations, and manufacturing. He was immediately appointed COO of Nissan, becoming President in 2000 and CEO in 2001. Born in Porto Velho, Brazil in 1954, Ghosn’s family was Lebanese-Brazilian. He moved to Beirut at the age of six, and gained engineering degrees from the École Polytechnique and ENSMP in Paris. Nissan was close to bankruptcy on Ghosn’s appointment, but having already radically restructured Renault in the 1990s, Ghosn had gained the nickname ‘Mr Fix-It’. His ‘Nissan Revival Plan’ took the carmaker from $20bn of net debt in 1999 to zero by 2005. In 1999 Nissan booked a net loss of $6.46bn; in 2000 it turned a net profit of $2.7bn. Its 1999 operating profit margin was 1.4%; by 2003 that was 11.1%. Ghosn is famed for understanding Japanese culture, but also for not being constrained by tradition. He is noted for listening to the concerns of Nissan workers, and putting in place cross-cultural team groupings within Renault-Nissan to ensure that cultural sensitivities and expectations are respected. He was also a very public face of the recovery and reconstruction efforts following the Japanese earthquake and tsunami of March 2011. Equally, however, Ghosn dismantled Nissan’s keiretsu system of interlocking business relationships to create a simpler and more efficient supply chain. He also changed the company’s official language from Japanese to English, and broadened the company’s strategic planning group from purely Japanese leadership to include European and North American senior executives. Carlos Ghosn is currently Chairman and CEO of both Renault and Nissan individually, and of the Renault-Nissan Alliance, as well as Chairman of Russian auto manufacturer AvtoVAZ. Says Alex Bennett: “Carlos Ghosn is probably the highest-profile example of a business leader who has blended the best of his natural leadership style with the best of another culture.” “Ghosn has become something of a cultural icon in Japan, which considering the cuts he was forced to make to the Nissan workforce, is an astounding achievement.