Swift action is needed before Sunderland AFC becomes another outright corporate failure

Let’s not hide from the facts - Sunderland AFC is in an exponential crisis.

Whilst businesses naturally go through phases of instability caused by factors in the macro environment, which are beyond their control, research tells us that those that fail, fail because they do not make the right decisions at the right time.

Blockbuster didn’t fail because of digital technology - they failed because they did not embrace digital technology and adapt their business model at the right time. Thomas Cook didn’t fail because people book holidays in different ways - they failed because they overrelied on a traditional business model instead of offering more customer more choice and freedom with booking their annual holiday.

All corporate failures have something in common and are generally blamed on one or a mixture of four different but related concepts - imperialism, laggards, villains and politics.

These concepts are underpinned by two mechanisms: 1) rigidness and 2) conflict.

When you consider the running of Sunderland AFC over the last ten years or so, it’s a miracle that it hasn’t followed Blockbuster and Thomas Cook in going under.

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Imperialism in a business sense refers to over expansion - growing or spending beyond your needs or means. This is not uncommon for football clubs - even the more ‘successful’ ones run on servicing high amounts of debts based on risky future income - but whilst the fairness of Financial Fair Play (or equivalent) is still up for debate, it has shaken some clubs into action. At Sunderland, the naïve and quite frankly irresponsible overspending by multiple managers on ‘questionable assets’ has ultimately led to overspending which was never strategic, but based on fire fighting.

X amount of players needed to stay in the Premier League, X amount of players needed to challenge in the Championship, X amount of players needed to get out of League One. There has never been a recruitment strategy for the long term.

When Stewart Donald took over, he promised an identity. The p*ss-taking party was over. Less than two years on, where is this identity? Sure, I acknowledge that cost-cutting was needed to streamline the business and ‘get the house in order’. Whether it was ridding the club of inflated wages or high maintenance plants, I really do understand this approach, after all I am educated in some business terms.

However, the club will suffer from the imperialist past until it adopts a real strategy, an identity throughout the entire club. Imperialist decisions are usually made by dominant, charismatic organisational leaders who want the best for the business, but ultimately fail to deliver. Its time that Sunderland AFC had a devoted, committed leader - a successful one. One who is prepared to put down roots in the region, embrace its fans (even ‘parasitic’ ones) and work with them as a collective.

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Laggards – ‘when businesses fail to act within a specified timescale’; Businesses lag behind and ultimately fail because they cannot catch up. Kodak did not fail because of digital photography, they failed because they failed to embrace digital photography quickly enough - by the time they were strategically placed to do it, it was too late.

Blockbuster (owned by Viacom at the time) rejected an approach by a small team of digital technologists who wanted to help make their stock and business model more focused on ‘digital’. They laughed that team out the room, and that team went on to expand a little business called Netflix!

Whilst victorious relegation Premier League battles had some kind of dark element of fun attached to them, the club was so focused on the firefighting and the day-to-day operations that it took its eye off the long term focus. And again, the loose strategy was defined by an absent owner in Ellis Short and managed by the wrong people who were irresponsible towards the club. An owner who helicoptered in from his Southern England-based mansion on match days. For a short time there was hope, but this hope has all but disappeared.

Transport by helicopter is not the only constant. The club deserves an owner who would be proud to live and breathe the city, just like its inhabitants. In many ways, the current owners have also over focused on the day-to-day operations instead of working towards more sustainable strategies. Decision-making has been obsessed with cost-cutting and making the club look like a bargain to interested owners - subsequently its financial and more intangible assets have suffered immeasurably, i.e. the academy teams.

Photo by Ian Horrocks/Sunderland AFC via Getty Images

I recently joked with a colleague who works in the arts that they should consider a play based on Sunderland, given the success and appeal of the Netflix documentary. Maybe it’s the time of year, but the more I think of it, maybe it should be a pantomime.

After all, there would be no shortage of villains to play out a role in Sunderland’s recent past. (If anyone progresses this idea I want to be in on it). In corporate failures, Villains are the next issue. Where individuals partake in questionable business practices. I mean, where would the pantomime begin? Where would it end? Sunderland fans love a hero - do well for the club, work hard for the club, hero status is bestowed. However, more recently villains outweigh the heroes. Short, Bain, Johnson, Byrne, Moyes, Rodwell - the list goes on and on.

When the current owners took over, they were already on the cusp of being heroes. The communication, the transparency - it was as refreshing as it was effective. However, less than two years on I am starting to believe Charlie Methven has a new seasonal job in the West End, not the political one he alluded towards.

There’s an argument that sport and politics does not or should not mix. However, that’s naive and it’s wrong. The two are entwined... and guess what?

The next constant in corporate failure is politics - when organisations become politicised. This leads to severe conflicts with internal and external stakeholders.

Whilst it would be wrong to make assumptions about the internal workings of the club, there are grounds for severe concern. The majority shareholder is rarely on site. Tony Davison and Charlie Methven both left for ‘personal reasons’. This is off the back of a number of failed high profile, expensive appointments on and off the pitch, coupled with a raft of redundancies affecting local people and their families.

It doesn’t appear to be the best place to work.

Photo by Richard Sellers - PA Images via Getty Images

Externally, the main stakeholder relationship for any football club to manage it the relationship with its fans. When Steward Donald and Charlie Methven turned up, it was clear they were different to Sunderland fans. The fact that Methven is Eton educated, wears red trousers and speaks differently was never an issue. In my work, I work with people from all around the world and they always confirm people from the North of England are the friendliest most accepting of people from different backgrounds. We are friendly, non-judgemental and have an honest, trustworthy openness. As I alluded to previously, we embrace those who wish to contribute to our success, who share our passions.

However, as a society we are operating on a grounding of injustice, instability and uncertainty. Sunderland fans work extremely hard, in a region ripped apart by closure of traditional industry and lack of investment to replace them.

For the money we do earn, we reserve the right to spend it on whatever we choose and we demand value for it. Its testament to the fan base that so many choose to donate money to those living in poverty as part of the recent Roker Report fundraiser.

Thus, terminology such as parasites or being parasitic, and being uneducated - they run deep. That’s because this language is familiar - for decades it’s the kind of language that has been politicised in order to symbolise the degradation and humiliation felt by people in the area. It’s the kind of language currently being used to by political parties to take advantage of the disillusionment in the area, based on stirring division and hatred, so quite frankly Sunderland AFC and the region could do without that kind of politics.

We need leaders who spend time to get to know how our community works, to share our values. At present the relationship between the club owners and fans is the polar opposite, and it’s becoming untenable. Swift, brave action is needed before Sunderland AFC becomes another outright corporate failure.