Terrace Thoughts 16, 01/02/19

During the last couple of weeks I’ve been ’banging on’ about the Fans Forum – or, to be more precise, the absence of any Fans Forums. Well, not this week – I hear that the club organised a Fans Forum earlier this week and I’m sure that everyone is now looking forward to the minutes or something similar being published – and won’t it be interesting, in nine months’ time, to look back at those minutes and see just what has been done and what hasn’t? And right now I wonder how much financial information has been provided with regard to what has happened since the club all but failed last year; I expect greater transparency (and accuracy!) than we enjoyed from other recent regimes and let’s hope that there is sufficient progress being achieved to ensure that Raj remains interested. Anyway, let’s not pre-judge and let’s keep an open-mind – but I’m sure that all true Poolies are waiting with some trepidation to learn how the club is really doing.

Last week I mentioned that I was going to look at ‘The 3P’s: People, Product, Price’ this week, and that I had decided upon this in advance of the Chairman’s comment, “My investment in the Club has been significant and I will continue to support the club financially, but we must see progress. My experience in business is that it is vital that you have the right people in the right jobs if you want to make the necessary progress”.

The comment about ‘right people’ was and remains ‘interesting’, given recent events.

The 3P’s that I’m referring to should not be confused or compared with:

  • Purpose, People and Process: The 3P’s of Effective Performance Management; or
  • The Marketing Mix 4P’s: Product, Price, Place and Promotion; or
  • The Marketing Mix 7P’s where you add People, Process and Physical Evidence; or
  • The 4C’s of Marketing: Cost, Consumer Wants and Needs, Communication and Convenience.

But all of the above probably need some consideration by the ‘off pitch’ management team at Pools.

The 3P’s that I’m referring to are People, Product and Price and, when I worked in the field of business turnarounds, we used these to assess whether a business should/ could be saved and then, if so, how to do it. Sure we had to look at the balance sheet (the assets and liabilities) but, if the 3P’s worked, then you’d look to remove the unsustainable liabilities by financial engineering such as the much maligned ‘pre-packaged receivership’.

The beauty of these 3P’s is that they could be widely interpreted, be changed to match the specific circumstances of the business, and could also be used to look at businesses as a potential acquirer. And they were simple.

Product – is what the business makes or provides as a service still relevant – does ‘it’ have a use or a market? That then moves on to can it be made or delivered (and then sold) at a competitive Price – simply, can it generate sufficient profit. Unfortunately if problems were identified with Product, then they would usually be terminal – and, in all probability, directly attributable to People failings.

Price? A key element of Price was the amount that would be needed to turn the failing business around – how much would the new owners or financiers need to risk to subsequently achieve an appropriate return. This would also be measured as an opportunity cost – could that new owner get a greater or safer return by putting his, her or their money elsewhere. And, again, any negative answers would generally lead to a question over the People running/ owning the business.

And if the Product and the Price were looking positive, could the current management team move the business forward? Were the People right? And often the answer would be no – as if it was ‘yes’ then turnaround folk like me wouldn’t be making a nuisance of themselves. So, if Product and Price were sustainable but the wrong People were in place the answer would be simple – clean the balance sheet as far as possible and change the People.

In a thirty year career my experience was that the P which was generally the weak point, or the primary cause of failure, was the People P. So, businesses could often be saved if (as well as removing unserviceable debt) the management team was changed.

Now taking the above, would you invest in a lower league football club? Sure you might if you’d had a big win on the National Lottery – but would you use your own hard-earned cash? Imagine the conversation over the dinner table, “Are you crazy Raj? We could build a few more care homes and I need a new car!” And then, if you decided to buy your local club, what would you do and how much of ‘the dirty washing’ would you ‘air in public’?

Sure folk will see these 3P’s as a capitalist means to generate money at the expense of people. For some operators this may be true; for me, if I could save a significant proportion of a workforce by restructuring a management team then what I was doing for ‘the business’ was the right thing to do. I recall reading a morning newspaper some twenty years back and seeing the headline ‘100 jobs axed at XXX’: once I’d calmed down I rang the journalist and the following morning’s newspaper carried the headline ‘150 jobs safeguarded at XXX as new investment announced’. Same company; same story; different interpretation of the same facts. Sure, 100 jobs had gone but the 150 families had been safeguarded – and that mattered to me.

And this all gets me to trying to interpret what appears to be going on at Pools from the perspective of the Chairman and his advisers; I use the word ‘appears’ as we don’t really know what is going on. The concern for us all must be that point where Raj decides that, whatever measures he uses, he is no longer willing to support Pools financially.

Love him or loathe him, Archie Norman (of Asda and M&S fame) has been successful at turning around failing businesses and as he says, “The starting point is to tell it how it is. The more negative the situation, the more important that is, because your people are on the front line. They know what is really happening and they are looking for the leadership to reflect what they feel, the unvarnished truth. At the same time, you need to point a way forward.

“People who think they can turn a company on its head in a year are kidding themselves because the root of most business difficulty is in the organisation and culture. So you need to buy the time and space with your shareholders and customers to deliver fundamental change. To set out the journey and recognise what to do when: a sense of time and place.”

‘Tell it how it is’; ‘the unvarnished truth’; the root of most business difficulty is in the organisation and the culture’. I mentioned the importance of communication last week and I wonder how many of these phrases could be applied (or should apply) to Pools?

“People who think they can turn a company on its head in a year are kidding themselves!” Not what any of us want to hear?

Should the Chairman communicate more? We all think so and the examples cited in recent Terrace Thoughts from the likes of Bury FC and AFC Rochdale would support that view. But it is his wallet – so he can talk about what he wants.

Archie Norman has also spoken at length about recruitment – how it is critical to get the right folk in the right place at the right time and how the recruitment process (however it is handled) is wrought with flaws – the wrong folk are usually recruited! And so it is important to identify the mistakes and remove those folk quickly! And so he boasts what appears to be an appalling recruitment record with a very high proportion of folk leaving within four weeks – but, conversely, a very high retention rate of those who survive those first four weeks.

And this, again, gets me looking at recent developments at Pools – developments which, for some, make the club look foolish – but, if we sit back and look at it again, from another perspective? Did they do the right thing? In the right way?

I am no apologist for the current regime – but I look at developments at the likes of Bolton, Oxford and Gateshead and do think that we should have patience and try to understand – and that is the end of my New Year Resolution of trying to be fair.

I’m going to close this week with a reference to a podcast – no, not one from Fortress Victoria. Back in 2002 Ivor Heller co-founded AFC Wimbledon following one of the most ridiculous stories in modern English football history. This week he spoke to Roker Rapport to discuss the tale of his club reborn, the importance of community, real football fans, and of course, their visit to Sunderland tomorrow!

Ivor takes us back to the day he and others decided the only way to win the battle they seemed to have lost, was to rebuild their club, and beat their pretenders on the pitch instead; he talks about how a club must be an integral part of the community, and the community must be an integral part of the club… Ivor shares his thoughts the over-commercialisation of a very simple and beautiful game; his thoughts on clubs like Manchester United, and his involvement with “protest club” FC United of Manchester. It is a fascinating chat with a true gent of the game. A fan first and foremost. Tune in – https://www.youtube.com/watch?v=LPYsVtD5WZI

And here’s a thought – AFC Wimbledon is one of the few teams against whom we have a good record – six played, four wins and two defeats. The first meeting was a 3-1 victory on 22 October 2013 with goals from Matty Dolan (who did the business for Newport at Borer last weekend), Fist Pump Walton and Luke James. Other Pools scorers during the years include Ryan Bird, Marlon Harewood and Adam Jackson – and Luke also scored in the 2-1 defeat down at their place on 28 January 2014 (Luke Williams also played that day!).

So that sets us up for a Luke hat-trick at Ebbsfleet………………..whenever the weather permits. And Ebbsfleet FC, whilst now Kuwaiti owned, was once saved by monies from the Fleet Trust – a supporter’s trust very similar to Hartlepool United Supporter’s Trust…..

Pip Pip

John

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