How to Create a Winning Team

Assembling a winning team is every manager’s dream. But what do we know about what it takes to get there?

I’ve studied this question quite a bit in the context of sports, and in particular the world of soccer (or, as it is known outside the US, football). As a business school professor, I’m interested not just in what makes for winning teams on the field, but also which ones are most fortunate off the field. Both results are needed to ensure lasting success, which seems so elusive in a world in which one lucky goal (or worse, one bad call by a referee) can make all the difference.

Acquiring stars
One approach is to focus on attracting superstars in their prime, and build a team around those accomplished professionals. In soccer, clubs like Real Madrid and, more recently, Manchester City live and die by what I call a “superstar-acquisition” model. Having stars on your team improves the odds of winning matches, of course, but it also can be tough to manage team dynamics, and it certainly does not guarantee championships. Tellingly, both Real Madrid and Manchester City lost out on their domestic league titles this year.

But what betting on stars does seem to ensure, my research shows, is an increase in revenues. Having one or more of the very top players on board strengthens the club’s brand as a top-notch soccer club, which fuels a variety of revenue streams, from ticket sales to television rights, sponsorship, and merchandising. That capital, in turn, puts the club in a better position to compete for the next big player. Real Madrid is a case in point: it currently is the world’s most valuable sports franchise, and it got there largely because of investments in superstars that appealed to fans across the globe.

Developing talent
Many teams don’t have the means to participate in the arm’s race for talent, especially those in smaller markets. Smart clubs that find themselves in that predicament take the opposite approach: they develop talented players, teach them the skills they value, integrate them into their team over time, and maybe even embrace the fact that they will some day leave for greener pastures. In soccer, teams like Boca Juniors in Argentina and Ajax in the Netherlands are known for having such a “talent-development” model.

They recruit promising youth players, often before they are teenagers, and have much-touted systems in place to develop those players into superstars. Some stay at the club and make it into the first team. Ultimately, though, a select few top players will be sold to wealthier clubs. The resulting transfer money – sometimes tens of millions of dollars -- is fed back into the club to fund the talent factory. The club’s cachet of having its players reach the top of their profession helps build its brand as a developer, allowing it to again recruit the most talented youngsters, and so the process repeats itself.

A talent-development strategy can pay off, too – on and off the field. Ajax won its third Dutch league title in a row last week, and it has seen its financial performance improve accordingly. The club knows it could see its best players leave this summer, as happened last year, but new talent is already waiting in the wings, and the turnover is actually helpful for them. Yet it is hard to imagine that even the best talent developers from smaller countries can consistently beat their wealthier rivals on the field in (more lucrative) international competitions. The gap between the elite soccer clubs and the rest of the field seems to be widening.

Caught in the middle
Many clubs fall somewhere in the middle of the spectrum between the two models, of course, and they can do extremely well, too – for instance, FC Barcelona and Manchester United have combined developing young players and betting on established stars to great effect over the years. Both teams secured domestic trophies this season, and both are strong global brands in the business of sports. (I'll dive into this model in an upcoming post, I promise.)

Three rules
In the end, it’s not the type of model that necessarily dictates success on all fronts. Instead, it's the execution of each model that matters most. Three simple rules about managing talent go a long way -- in soccer and beyond:

1. Pick a talent strategy. It is vital to make a clear decision about how you intent to compete. In other words, make a call about which talent model will be yours.

2. Be consistent. As with any strategy, frequently changing course can be problematic. Successful teams stick with one approach over an extended period, and grow stronger over time.

3. Make sure that your talent strategy fits your overall business model. If you are relying on talent development, structure your business in such a way that you benefit when the talent you have nurtured leaves, for example by having the right contracts in place. Similarly, if you concentrate on acquiring superstars, ensure that you are set up to collect the associated rewards, too, for instance by building a strong merchandising arm.

Anita Elberse is the Lincoln Filene Professor of Business Administration at the Harvard Business School. Last year, she wrote an acclaimed case study on Sir Alex Ferguson, British soccer’s most successful manager ever, who traveled to Boston to speak in her class. In October, she will release her first book, “Blockbusters: Hit-making, Risk-taking, and the Big Business of Entertainment.”