As the 2015–16 English Premier League football season ends, I reflect on the lessons that smaller/medium sized enterprises (SMEs) can learn from Leicester City’s unlikely victory. In addition, to the usual lessons on how an underdog can triumph over much bigger competitors, I explore three other important lessons that are less obvious.
The sporting world and the general public alike have been astounded and inspired by the feats of Leicester City Football Club in England, winning arguably the most competitive club football (soccer) league in the world. With the fourth lowest player budget in the league, Leicester’s resources are minuscule in comparison to, for instance, last season’s champions Chelsea Football Club whose player budget is four and half times greater. Leicester had spent much of the previous season languishing at the bottom of the 20-team 38-game Premier League, only avoiding relegation by winning 6 of their last 8 games. Despite this escape, their manager was subsequently fired and Leicester appointed Claudio Ranieri as his replacement. Ranieri is an experienced manager with a checkered history—having managed clubs in Italy, Spain, England and France for 28 years, he had never won a top tier league competition. In his last job as manager of the Greek national team, his contract was terminated early after gaining just 1 point from a possible 12 in the European Championship qualifiers, including a humiliating loss to a team of part-timers from the Faroe Islands. Not surprisingly, Leicester were one of the favorites to be relegated at the start of the 2015–16 season. The bookmakers’ odds of Leicester winning the league (for the first time in their history) were at that point 5,000–1; as one tabloid newspaper recently put it, “you could get better odds for Elvis being alive“! Many have called Leicester’s success the most unlikely underdog victory in the history of team sports.
The Usual Suspects
Over recent weeks, there have been a flood of articles, many in the serious business press, detailing the management lessons from Leicester’s achievements. These generally aim to highlight Leicester and/or Ranieri as shining examples of currently popular business ideas and management concepts.
For example, The Economist outlined Leicester’s use of technology and analytics; its strategic focus on core business (the Premier League) and not being distracted by cup or European competitions; and Ranieri’s leadership style emphasizing teamwork rather than star individuals. Forbes talked about how Leicester identified, acquired and leveraged under-valued assets; how it deployed a strategy of strong defense and counter-attacking based on its players’ core competencies; and how Ranieri was a role model of calmness for his team. The BBC’s news site highlighted, amongst other things, why management does not always need to throw money at a problem; the importance of getting the right people behind the leader; the value of creating the right culture and establishing the right incentives; and the power of technology-enabled analytics.
Many of the points noted above are indeed valuable lessons for bioscience SMEs seeking to develop and commercialize new drugs or medical technology, whether they are organizations of 5 or 500 people. Especially in a market dominated by huge multinational pharma and medical device corporations, I would highlight for special mention:
- The clever use of scarce resources and taking advantage of under-valued assets.
- Focusing in areas that make most sense for you.
- Teamwork, culture and a leadership style that matches your strategy; including learning from previous mistakes and using the experience of shared historical adversity to accelerate forward momentum.
Three Less Obvious but Important Lessons
In addition, I would also point out three less obvious, but in my mind, quite important lessons for bioscience SMEs in what Leicester and Ranieri have done:
- You should not always hire people from “bigger, more successful” companies. When you expand and develop your organization, you should always hire people whose culture, mindset and expectations fit the way you work and your strategy.
- You should not be afraid of going against convention as long as it works for you. And you can even turn that unconventional approach into an advantage that your competitors cannot cope with. You should pick the battles that you know you have a better chance of winning, perhaps even change the battlefield to suit you.
- You should not be wary of taking calculated risks and riding your luck.
1. Hiring Strategy
Much has been made about Leicester’s success at finding under-valued talent. But this is not a fundamentally new idea as such. Many mid-tier football clubs buy or loan talented young players for comparatively low prices from top clubs where those players cannot get playing time as their positions are occupied by world-class incumbents. And many clubs also globally scout for emerging talent across the top teams in smaller footballing countries. In contrast, Leicester acquired many unfancied players, in the middle or at the end of their careers, some of whom the mass media might refer to as “rejects”. These players not only fitted into Leicester’s playing strategy, but also had the right mentality, realistic expectations and points to prove to the world.
The analogy for bioscience SMEs is clear. SMEs who are developing and growing often hire “experienced” people with “successful track records” from large multinationals who have “seen and done it before”. This ought to make sense. But the reality is that in, for instance biotech drug development, many ex-big pharma people are unused to working in a different way, and struggle with the constrained resources and operating culture of SMEs where one has to be a “jack of all trades” and make practical compromises every day. In contrast, some people from other biotechs that have experienced scientific failures may actually be a much better cultural fit, and have experiences and contacts that SMEs would greatly benefit from.
2. Going Against Conventional Wisdom
While a defense-based counter-attacking style in football is not unusual, how Leicester do it is quite illuminating. Conventional wisdom for defending is that you aim to prevent the opposition from crossing balls from the flanks into your penalty box—by doing so you prevent goal scoring opportunities. Whereas Leicester often invite the opposition to cross the ball into their penalty box by the way they play , whether this be from open play or from free kicks. They concede a lot of possession and let the opposition attack down one of of their flanks, luring opposition players forward into Leicester’s penalty box. They rely on their opponent adopting the conventional attacking wisdom that when you have a lot of possession and have an opportunity to cross the ball from the flanks, you pour players into your opponent’s penalty box. By doing this, Leicester lull their opponent into a false sense of superiority—they set a trap by packing their penalty box with not just their central defenders but also their fullbacks and their central midfield players. Leicester’s players are ready for the inevitable cross, block all possible scoring angles and win the ball, which they then quickly send upfield to their very speedy attackers. The ensuing counter-attack can be devastatingly effective since their opponent, focused on attacking an apparent weakness in Leicester’s defending, has committed many of their players forward, leaving gaps in their own defense which Leicester exploits mercilessly.
There are many analogies one can draw for bioscience SMEs. For instance, selecting an indication for drug development. Conventional wisdom is to focus from the outset on one indication with has either the biggest sales forecast (maximize investor valuation) or the quickest/lowest-cost path to registration (optimize scarce resources). But there may be other approaches that might make more sense for the particular company and molecule in question—depending on the unique technical aspects of the molecule, the distinctive scientific or commercial know-how of the company, specific partnering opportunities to develop combination or adjunct therapies, and many other factors specific to the situation at hand. One could even conduct studies in the early stages that are applicable to multiple indications and delay choosing the indication until more robust data is available.
You should always consider whether it makes sense to do what everyone else does. Such contrarian logic applies in many situations, such as:
- Planning a clinical development program—does the big pharma “standard” package of studies for a chosen indication really make sense in your situation?
- Partnering commercially—is a large multinational marketing & sales partner always the best option?
- Defining your business model in, for example, drug discovery—is it just a simple choice between being a CRO or being a proprietary drug discovery house?
- Leveraging outsourcing partners—are the lowest-cost acceptable-quality providers really the right strategic choice for you?
3. Calculated Risks and Riding Your Luck
Leicester took some calculated risks over their title-winning season. To make their game plan consistently successful, they sought to deploy essentially the same well-drilled and balanced team in every match, risking injuries and disciplinary suspensions in the world’s most intense, physically demanding and injury-prone football league. In a game of 11 players and 3 substitutes, Leicester selected mostly from a core group of 15 or 16 individuals for all their league games. They used the fewest number of players of all the teams in the league. Fortune played its part—Leicester’s injury rate was low and not many of their players were suspended over much of the season.
Ranieri also took a calculated risk by sticking to the same game plan throughout. By the second half of the season, the surprise factor was gone—the other managers had figured out Ranieri’s tactical approach. But their teams nevertheless struggled to beat Leicester, in part due to Leicester’s strategy of deliberately exploiting their opponents’ ingrained attacking philosophy. Even the lower-ranked teams, who would sit back and defend while playing at Leicester’s home ground, would nevertheless commit men forward when they won free kicks in Leicester’s half of the field—this was their best chance to score. Whereas for Leicester, a free kick by the opposition into its penalty area is also an opportunity to counter-attack quickly and score at the opposite end. Many teams struggled to cope with this ploy even though they knew it was Leicester’s plan—again a certain degree of luck was required for this to consistently succeed.
For bioscience SMEs, the message is clear—take calculated risks, do your best to mitigate them and ride your luck! Biotech is by definition is a very high risk venture. If you are not comfortable taking calculated risks frequently, you should not be working in biotech! At the end of the day, it’s rare to achieve a high return without taking on a significant amount of risk. You just need to mitigate some of that risk by clever use of resources and unconventional thinking.