Sir Alex Ferguson, Fergienism and Nigeria’s Power Sector Privatisation Success
PROEM:
Prior to the retirement of Sir Alex Ferguson, in May 2013, he had spent 26 football seasons as the manager of Manchester United, England’s most successful club. Even before Sir Alex’s retirement, he was also already regarded as one of the greatest football coaches in the world. During his 26 years at the helm of affairs at Manchester United, the club had won 13 English league titles along with 25 other domestic and international trophies. According to Anita Elberse (the Harvard Professor, who wrote in the Harvard Business Review of October 2013), Alex Ferguson during his tenure as manager at Manchester United won almost double the number of honours the next highest winning coach, on English soil, had amassed.
According to Anita Elberse, Ferguson played a central role in Manchester United beyond just being the coach of the first team. Giving fillip to the foregoing assertion by Anita, David Gill, the erstwhile Chief Executive Officer of Manchester United had once stated that ‘Steve Jobs was Apple; Sir Alex Ferguson is Manchester United’.
In this piece we look at Sir Alex’s unique management approach upon which Anita Elberse of the Harvard Business School developed an HBS case study. Specifically, in this piece we do a juxtaposition of Alex Ferguson’s success formula with the approach utilized in achieving the success achieved so far in Nigeria’s electric power sector privatisation. In this piece, we have adapted and used to a great extent, research already conducted by Anita Elberse. Sir Alex Ferguson and Anita discussed 8 leadership lessons which capture the elements of his approach which I term ‘Fergienism’.
FERGIENISM:
Start from the Foundation:
When Sir Alex Ferguson arrived at the club in the year 1986, he set about creating a structure for the long term by modernizing United’s youth programme. He established two ‘centres of excellence’ for promising players as young as nine and recruited a number of scouts, compelling them to bring him the top young talents. Amongst these promising young talents were David Beckham and Ryan Giggs. A look at the history of Nigeria’s power sector, reforms generally and the successful privatization in particular, it is clear that the Obasanjo administration which began the reforms and privatisation of PHCN went back to the basics and foundational issues.
Under the Obasanjo administration, the National Council on Privatisation (“NCP”) set up the Electric Power Sector Implementation Committee (EPIC) to undertake a comprehensive study of the electric power industry. Membership of the committee was drawn from the then Federal Ministry of Power and Steel, National Electric Power Authority (NEPA), Bureau of Public Enterprises, Ministry of Petroleum Resources, Ministry of Finance, the Energy Commission of Nigeria, the organised private sector and other relevant professional bodies. EPIC’s key objective was to prepare a power policy blueprint that would define government’s new direction for the electric power sector.
Dare to Rebuild your Team:
Even during periods of great success, Sir Alex worked hard to rebuild his team to assure continuous success. He is credited with building five distinct league winning teams which continued to win trophies and other accolades. His decisions, according to Anita Elberse, were driven by where the team stood in the cycle of rebuilding and by a similarly keen sense of players’ life cycle. Alex Ferguson said, ‘the hardest thing is to let go of a player who has been a great guy’.
Throughout the electric power reforms generally and the privatisation specifically, a few people had come and gone. To show serious intent, the federal government of Nigeria had at some point, hired a South African consulting firm, NERA together with Anil Kapoor and Trevor Byer of the World Bank, to work with the Bureau of Public Enterprises (BPE). The first set of members of the EPIC and technocrats like Malam El Rufai had come and gone.
We had even had one of the best minds and most successful power Minister Professor Barth Nnaji come and go just to give the privatisation some credibility. Even Ms. Onagoruwa would had done so much under the auspices of the BPE had to leave at some point. There were, however, almost always square pegs in square holes but the several teams working on the power sector reforms and privatisation in particular kept changing.
Set High Standards and Hold Everyone to Them:
Sir Alex said that everything he did was about maintaining the standards that had been set and that applied to all his team building and all his team preparation, motivational talks, and tactical talks. He generally spoke about wanting to instill values in his players.
In Nigeria’s power sector, there was a lot of discipline (although, there were a few lapses). People were relieved of their jobs where there was any doubt. Discipline ran through the system such that it was business unusual and no favoritism could be sustained. During the submission of bids, for example, top companies who clearly had the financial and technical know-how, but who were late, were not allowed to submit their bids. A key bid criterion was also a 75% score in the technical bid and a successor generation company like Kaduna was open to a rebid because no one met the 75% mark. The Afam power plc. too was a subject of a re-bid because the government wanted to maintain the transparency standards.
Never, Ever Cede Control:
Sir Alex Ferguson recently stated that he never lost control and if any players wanted to take him on or challenge his authority or control, he would deal with such a player. Same was the case in the power sector reforms that the NCP never really ceded control and took its decision no matter whose ox was gored. A key decision was for example, having Vigeo declared preferred bidder for the Benin Electricity Distribution Plc despite political pressure from the governors of Delta, Edo and Ondo who had a company they had floated and were promoting.
Match the Message to the Moment:
When it came to taking decisions, Sir Alex stated that he worked hard to tailor his words to the situation. He said when he had to tell a player who may have been expecting to start, that he would not, he treated that as a delicate manner. The same, can be said about the BPE and NCP’s approaches especially in the matters of the Enugu Electricity Distribution Plc and the Sapele Power Plc. The preferred bidders were given the chance to complete payment and despite criticism the circumstances dictated the manner both the BPE and NCP approached the matter of non-completion of payment.
Sir Alex was quoted as saying ‘you can’t always come in shouting and screaming’. That speaks for the way the BPE. Presidency and the NCP dealt with issues.
Prepare to Win:
Alex Ferguson’s team had a knack for forcing victories in the late stages of games. An analysis of Manchester United’s games in the last 10 seasons reveals that the team had a better record, when tied at halftime and when the team was tied 15 minutes to the end of football matches. Sir Alex Ferguson had his players regularly practice how they should play if a goal was needed with 10, 5 or 3 minutes to go.
His teams practiced for situations where the going got tough. He would put in an extra attacker and worry less about defense. In his words, I was perfectly happy to lose 1-3 if it meant we’d given ourselves a good chance to draw or win’- those last few minutes were regarded as “Fergie Time”. In the 1999 Champions’ League final which Manchester United won in the last few minutes, the team’s top scoring pair was substituted- a risk which gave the team the trophy, as two of the substitutes scored the goals which gave the team the trophy.
In Nigeria’s power sector, the BPE and presidency was determined to achieve success and pulled things through despite criticisms about a number of the issues. They modified their approaches when necessary to achieve the goal of success of the power sector reforms and privatisation. Risks were taken in terms of even privatising several companies at the same time when certain international experts and organizations said it could not be done that way. To prepare to win, international experts and consultants were hired from time to time to help achieve.
Rely on the Power of Observation:
Sir Alex Ferguson revealed that observation was key to achieving success. He stated that as a coach on the field, you don’t see everything. A regular observer, however, can spot changes in training patterns, energy levels and work rates. Said Sir Alex, the key is to delegate the direct supervision to others and trust them to do their jobs, allowing the manager to truly observe.
President Jonathan appeared to always be observing and making important calls as to who should be where and also had both Nigerian and international experts playing different roles in the privatization process. Delegation was a key part of the reform and privatization process. He had the Presidential Task Force on Power as a think tank.
Never Stop Adapting:
During Sir Alex Ferguson’s period at Manchester United, there were a lot of changes. David Gill stated that Sir Alex had demonstrated capacity to adapt as the game changed.
In the reforms and privatization, there were changes since 1999 with the change in personnel, the strategy, the introduction of new ideas and better ways to achieve the goal of succeeding with the power sector privatization. When on Monday, September 30, 2013, the share certificates and licences were handed over to the new owners of 14 of the formerly PHCN owned electricity generation and distribution companies it was expected that they would take over the running and operation of the companies.
This was, however, not the case, because in the words of Prof. Nebo (the Minister of Power) at that time, the new owners would only have access to the utilities when the remaining PHCN workers would have been paid their entitlements and which was expected to happen in October 2013; in order to have a smooth and peaceful transition.
CONCLUSION
Sir Alex Ferguson, a truly great coach, retired in May, 2013. During his last season, the club won its 20th English league title giving it the most of any team. Revenues have increased more than 13-fold from when he joined the club. In Nigeria, a new vista has opened in the electric power sector. The principles of Fergienism have been adopted in Nigeria’s electric power privatization and we are already recorded huge success. For more information on this topic and the electric power sector, read the text ‘The Nigerian Electric Power Sector: Policy. Law. Negotiation Strategy. Business’
By: Ayodele Oni
Ayodele Oni (ayodeleoni@outlook.com) specializes in international energy (oil, gas, power & renewables) investment law and wrote Nigeria’s leading text on energy security and the Nigerian electric power sector.