In February 2012, Arsene Wenger, former Manager of Arsenal FC, the English Premier League Football Club stated that finishing in the league’s top four positions was akin to winning a trophy. The statement was made in response to criticism from media, opponents as well as some fans since the team was facing the prospect of finishing a seventh season without a single trophy. In an industry where winning and being top of the pile is coveted, the statement sounded rather odd. The oddness was amplified by the fact that the statement came from a man who had managed the same club into going the whole of the 2003 – 2004 league season unbeaten as well as going 50 league games without defeat – both historical feats.
The team won 2 FA Cup (domestic knockout tournament) after the “Top Four is like a trophy” comment from their manager – during the 2013 – 2014 and 2014 – 2015 seasons but has not won a league championship since. The teams’ performance gradually declined to the point that they eventually dropped out of the “top four” during the 2016-2017 season. Failure to make the top four during the 2017 – 2018 season led to loss of income that comes participation in the European Champions League and is believed to have been the catalyst for Wenger’s eventual departure a year later – amid a toxic relationship with club supporters. During the period when Arsenal were synonymous with “Top Four” finishes, there were rumors to the effect that players enjoyed bonuses for finishing in the “Top Four,” an issue ridiculed by rivals as rewarding mediocrity.
During the decline phase, many explanations were advanced including lack of funds to rebuild the team as a result of borrowing to develop a new stadium, overspending by rivals to “buy success” and rivals’ discovery of talent markets that were previously known only to Arsene and his talent scouts. Few, if any, however advanced an important and most probably the main reason namely “performance management.” They set low targets, achieved the same in the short-term, got comfortable but eventually found it difficult to achieve the same targets.
The Arsene Wenger scenario reminds me of the Chief Executive of a company I helped review their performance management tools. To him, performance management was never a priority. He always had words to justify poor performance and was ever reluctant to take action against poor performers. He also used to caution managers against setting high targets by pointing out the dangers of rapid growth such as overextension of resources, financial instability and loss of focus. He also often pointed out that pressure from excessively high performance targets could lead to staff burnout, high turnover and even fraud. He vehemently defended his annual growth target of 15% despite an industry average of 30%. Though he met the target during the first two years, the company’s financial performance declined by over 50% during the subsequent two years, an issue that led to his eventual exit. Like Arsene he had set low targets, achieved the same in the short-term, got comfortable but eventually found it difficult to achieve the same low targets
During my working days, I have come across many other situations where managers and CEOs fail to achieve their own low targets. They fail to raise the bar due to fear of failure of stretching themselves or their team members. Others prefer low targets in the name of “modesty” or calculated risk taking. I have also met those who set lofty targets and surpass them as well as those who set the high targets and fail to achieve them. One CEO in the latter category had set a 40% growth rate against an industry average of 25%. Though the company achieved 28%, he still performed better than a majority in the industry, ranking 3rd amongst 20 peers. In my opinion, he was better off than the one who set 15% against an industry average of 30% but ended up in a decline. This therefore proves that setting low targets and achieving them is more dangerous than setting high targets and failing to achieve them.
Dr. Weru Mwangi is the CEO & Lead Consultant at Ultimate Management Solutions, a firm specializing in training & consultancy in Finance, Governance, Strategy, Risk Management and Leadership Development. He can be contacted on weru@umslgroup.com
