Ferguson's Formula

Anita  Elberse; Sir Alex  Ferguson

Article | Harvard Business Review | October 2013

Ferguson's Formula

by Anita Elberse and Sir Alex Ferguson

Abstract

When Alex Ferguson took over as manager of the English football team Manchester United, the club was in dire straits: It hadn't won a league title in nearly 20 years and faced a very real threat of being relegated to a lower division. In 26 seasons under Ferguson, United won 38 domestic and international trophies—giving him nearly twice as many as any other English club manager—and became one of the valuable franchises in sports. In 2012, during Ferguson's final season before retiring, Harvard Business School professor Anita Elberse had the unique opportunity to observe Ferguson's management style in a series of visits and in-depth interviews. In this collaborative explication, she details eight parts of Ferguson's "formula" as she observed them and gives the manager his say. The lessons described range from the necessity of maintaining control over high-performing team members to the importance of observation and the inevitability of change. The approach that brought Ferguson's team such success and staying power is applicable well beyond football—to business and to life.

Keywords: Strategy; Business or Company Management; Management Style; Success; Sports; Sports Industry; England;

Format: Print

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Citation:

Elberse, Anita, and Sir Alex Ferguson. "Ferguson's Formula." Harvard Business Review 91, no. 10 (October 2013): 116–125.

“We’re in business together, and whether we lose a few million dollars or make a few million dollars, let’s do this. If you think you can pull it off, I’m behind you.” Michael Rapino, chief executive officer of Live Nation, the world’s leading live entertainment company, expresses his support to Pharrell Williams, one of the music industry’s biggest stars, and his long-time manager Ron Laffitte. It is December 2018, and Williams just pitched Rapino an idea for a music festival in Virginia Beach, Something In The Water. Williams is engaged in many endeavors – he is not only a chart-topping musician, but also a fashion designer, film and television producer, brand builder, and business consultant – that are brought together in his company, I Am Other, which is in a joint venture with Live Nation. Although Live Nation generally does not shy away from making big bets on its artists, Williams’ festival idea is risky and has an unusually aggressive time table. Is Rapino right to lend his support to Williams’ proposed festival? Are partnerships like the one it had formed with Williams’ company I Am Other the way forward for Live Nation? And how can the company that dominates the live music space best continue to create value for artists and their managers?

Case | HBS Case Collection | September 2020

Chip and Joanna Gaines' Magnolia Network

Anita Elberse and Julia McNicholas

Chip and Joanna Gaines, who have shot to fame as stars of the hit television show Fixer Upper, are preparing to launch their own television network. It is April 2019, a year since the home-renovation show Fixer Upper’s fifth season on cable channel HGTV ended, and more than one-and-a-half years since the husband-and-wife duo announced that season would be their last. At the time, entertainment company Discovery Inc. was in the process of acquiring, in a $12-billion deal, Scripps Networks Interactive, HGTV’s parent company. Now, hoping to find a way to bring the duo back, Discovery’s chief executive officer David Zaslav has proposed setting up a joint venture between Discovery and the Gaineses. Under the deal, the latter will receive an ownership stake as well as certain guaranteed payments, be given creative control over the ‘DIY Network’ which they plan to rebrand as ‘Magnolia Network,’ and have a sizable programming budget at their disposal. Meanwhile, the two entrepreneurs are also running a thriving set of other businesses under their ‘Magnolia’ brand, that covers retail and hospitality—including their ‘Magnolia Market at the Silos’ complex and ‘Magnolia Table’ restaurant in Waco, Texas—as well as brand partnerships, books, and a magazine. Is launching Magnolia Network the right move for Chip and Joanna Gaines—and for Discovery? And what can both parties do to ensure the new network will be a success?

Keywords: entertainment; television; superstars; innovation; Creative Industries; Talent; general management; celebrities; Television Entertainment; Entrepreneurship; Joint Ventures; Innovation and Invention; Marketing; Strategy; Entertainment and Recreation Industry; Media and Broadcasting Industry;

Citation:

Elberse, Anita, and Julia McNicholas. "Chip and Joanna Gaines' Magnolia Network." Harvard Business School Case 521-044, September 2020. View Details

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In March 2020, Nasser Al-Khelaifi, the president of French soccer club Paris Saint-Germain (‘PSG’) sees his team clinch a spot among the last eight clubs to compete in the UEFA Champions League. Established in 1970 and initially a club with only moderate success, PSG’s fortunes changed when Qatar Sports Investments (QSI) acquired the club in 2011. QSI overhauled the roster of players—by, among other measures, buying Kylian Mbappé and, in a record €222-million transfer that shook the soccer world, Neymar—and professionalized the club’s management, renovated the stadium, developed a new training ground, redefined the PSG brand, and pursued a series of high-profile collaborations. The investment seems to have paid off, on and off the field: since the acquisition, PSG has amassed six French league titles and has risen to fifth place in the ranking of Europe’s highest-grossing soccer clubs. But the biggest prize the club’s owners are eyeing, the Champions League, has so far eluded PSG. Does the club have the right strategy to break the hegemony of Europe’s long-standing soccer powerhouses? And are Al-Khelaifi and his team of executives on the right path toward their goal of establishing PSG as one of the world’s top three sports brands?

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