What Leicester City and Claudio Ranieri can teach business leaders

How did the Italian football coach Claudio Ranieri take Leicester City – a team tipped for relegation - to the Premier League title and what can business leaders learn from him? David Myatt, professor of Economics at London Business School, analyses how a squad that has cost a relatively modest 58.2 million GBP – are heading into the 2016/17 English Premier League season as champions.

Only a few months before his triumph with Leicester City Ranieri was sacked as Greece’s national coach in November 2014, following a humiliating defeat to the Faroe Islands. And then he proved all the doubters wrong.

Myatt believes Ranieri tapped into a winning mentality: “For a football team, continued success can be self-reinforcing and lead to an upcycle. That then makes the players want to continue their run, which becomes a self-fulfilling prophecy. It’s the same in business – we all want to play for a long-lasting, winning team.”

The idea of a self-fulfilling prophecy applies to any sports or business team. As Professor Myatt points out, teams are often in one of two states: the honeymoon period or crisis mode. When times are good, political parties are elected to government, a football team wins the Premier League or a business school climbs the rankings. These successes lead to a self-reinforcing cycle of positive expectations, where everything looks great. In contrast, teams in crisis mode expect things to go wrong, they suffer setbacks and the failure that everyone anticipates turns into reality. Top leaders understand that positive self-fulfilling prophecies come from establishing interdependence within the group. This involves giving each individual a task, which has to be completed to ensure the project succeeds. If one person fails, the team cannot complete its objective.

Using interdependence to drive individuals can be an effective way to develop a high-performing team, according to Myatt. “Making people interdependent reinforces their incentive to succeed, because everyone must play their part in order to complete the project successfully.”

Leicester’s strong start to the 2015/16 season gave the team the momentum to continue winning. Ranieri’s faith in the same players was also a major factor. He picked just 17 players in the first 22 games, with his preferred 11 playing 87 per cent of all matches. Relying on the same personnel, whether managing a football or business colleagues, is critical to success, according to Professor Myatt. Also Ranieri always encouraged his players to forget about their individual errors and move on. “One of the things a leader may do in that situation is to encourage staff to try things and not worry about making mistakes. But if they don’t make changes when things go wrong, team members may slack off as they feel their positions are protected.”

Ranieri was the architect of the team’s success, encouraging the players to work for each other and instilling in them an unshakeable belief that they could achieve greatness. “A leader acts as a focal point for the team and coordinates expectations,” Professor Myatt says. “They also coordinate the collective effort of the team.”

The coach identified the squad’s strengths and weaknesses and brought in a few new players to plug the gaps. Myatt believes business leaders who take the same approach in their organisations are more likely to develop successful teams.