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An online monthly research publication by the Ivey Business School
Volume 14, Number 5: Faculty Focus
May 2008
Leadership in the NHL
Click here to download audio/visual
presentation.
Click here
to listen to the Q&A.
The business of
sports is big business. Sports and business are
meritocracies where good performance is rewarded
and poor performance is punished.
Underperforming coaches and general managers are
shuffled and fired if they’re not producing a
winning team. So how is it possible for the
Toronto Maple Leafs to do well as a business and
have poor on-ice performance?
Glenn Rowe, Professor of Strategic Management at
the Richard Ivey School of Business has been
studying leadership in sports, with a particular
interest in the NHL, its coaches and general
managers, and the impact that leadership
turnover has on teams and their performance.
Ashleigh Murphy started by asking him about some
of the parallels between business and sports?
A. I think there are several and I am
delighted when I come across quotes that
illustrate those.
Sam Pollock, the legendary General Manager for
the Montreal Canadians, said that when he became
a General Manager in 1964 it was about 50-50
[meaning] 50% business, 50% hockey. He went on
to say when he stepped down 14 years later in
1978 that it was 85% business and 15% hockey.
The CEO of Ameritrade, about four or five years
ago, said that he felt there was a lot that
could be learned by business leaders from sports
leaders. Conversely, there is a lot that sports
leaders could learn from business leaders. So I
think there are a lot of parallels.
One of the big parallels is the idea that in
both cases, CEOs of firms and General Managers
of Hockey teams, it’s all about performance.
It’s all about different measures of
performance, on ice performance in the case of a
General Manager, in the case of a CEO its stock
market performance or accounting performance.
But it’s about being the best you can be. You’ve
got to come up with strategies for achieving
that performance. You’ve got to lead people
–whether they’re players on the ice or people in
your front office, it’s about leadership.
Q. Is it possible for a team to do well
as a business and have poor on-ice performance?
A. Yes, [look at] the Toronto Maples and
the New York Rangers. Those are two examples
that immediately come to mind from the NHL.
These teams have done very well business wise
while Toronto has not made the playoff in three
years –well, two years and it looks like they’re
not going to make it again this year. And the
New York Rangers have [also] had trouble making
the playoffs. They did have one Stanley Cup win
back in the early 90s, but they still have not
done well in terms of getting into the playoffs
consistently. So it is quite possible to do well
business-wise, in terms of making money, but not
do well on the ice.
Q. Can good leadership really make a poor
team great or vice versa can poor leadership
break a good team?
A. I think it’s harder for great
leadership to turn a poor team into a great
team, but I think it is possible. It’s very easy
for poor leadership to cause a really good team
or a great team to do poorly.
Let me give you an example that I am watching
closely right now. I have a lot of respect for
Bryan Murray as a General Manager and a lot of
respect for him as a coach but I think he made a
big mistake when he didn’t get rid of Ray Emery
several months ago. Ray Emery has not been a
good asset for the Ottawa Senators for quite
awhile now. The Ottawa Senators have imploded on
themselves over the last several months and I
think it’s a result of bad leadership on the
part of Bryan Murray because he did not handle
the Ray Emery situation very well.
One of the things that I try to do with my
hockey research is to sort out General Managers
in particular [and] I am doing it over a long
span of time, over about 60 years. I try to sort
out which General Managers were a source of
competitive disadvantage. And what we’re doing
there is we’re actually using a lot of variables
to predict what their performance should have
been, and then assessing it against what their
actual performance was. What we’re finding is
that a few General Managers have led their teams
to performance that was much less than
predicted.
When we look at what performance should be from
a predictive perspective, we’re looking at the
capability of the coach, on ice talent, the
division they play in, what they were like the
previous year as a team…so controlling for all
those variables we’re finding that several GMs
are leading their teams to actual performance
that’s worse than what would be predicted.
At the other end we’re also finding General
Managers who have led their teams to performance
better than one would predict given their
coaching ability and on-ice talent. Lou
Lamoriello is one of those General Managers who
has led his team to on-ice performance during
his tenure as a General Manager that is better
than what one would predict given his coaching
talent and his player talent.
Q. Why do coaches get fired?
A. One piece of research I did with a
couple economists suggests a couple of reasons.
One, it is performance over the previous ten
games. You can do really well for several
months, but if you go into a tailspin for about
a period of ten games, our research suggests
that leads to a much greater likelihood of
getting fired. Secondly, and this may be
surprising, it appears that coaches who played
for the same team that they’re now coaching
[have] a greater likelihood of being fired as
well.
On the other hand, if your performance
currently, relative to preseason prediction of
your performance is comparable, you’re less
likely to get fired. And if you’ve done well in
the previous season’s Stanley Cup, if you took
your team deeper into the Stanley Cup, you’re
less likely to get fired even though your
performance may be bad in the subsequent year.
Q. What kind of impact does firing a
coach have on the team’s performance?
A. In the short term, on average the team
performance is worse for about four games. If
you look at it as two group, teams that fire
their coach and teams that do not, and if they
have a similar record leading up to that firing,
teams that fire their coach, compared to teams
that don’t, will do worse for about four games
out and then performance will return to be equal
to those teams that did not fire their coach.
That leads to the idea that in a current season
firing a coach, because you’ve had poor
performance leading up to the firing, and you’ll
have some poor performance for a shorter period
of time –only 4 games out –because of that 15 to
20 game period where you’ve had poor performance
you will on average underperform those teams
that did not have to fire their coach throughout
that particular year.
In the longer term, if you fire your coach this
season, what our research also suggests is that
the following season, on average, your
performance will be better. So if you compare
teams that fire their coach this year to teams
that do not, on average, the performance of the
teams that fire their coach this year will be
better next year than those teams that do not.
But you’ve got to be careful. My data set shows
that it’s possible to have a coach fired within
season, between seasons, and the subsequent
season. So that’s three periods where you could
have a coach fired; or you could have just any
two of those; or any one of those; or none of
those. Teams have to understand that it doesn’t
matter if they fire between or previous. What
really matters is if you fire your coach this
year, your performance is going to be worse
relative to teams that don’t. But if you’re
firing came this year with the idea of improving
your performance next year, that’s what you want
because that’s will happen.
Q. Do GMs and coaches have the ability to
transfer high impact on performance from team to
team?
A. Good question. My research says no.
When we’ve looked at actual performance relative
to predictive performance and when that actual
performance is much greater than predicted,
throughout the tenure of the General Manager [we
categorize that as high impact performance].
When we look at the General Managers who have
had that high impact, who have transferred to
other teams, they have not had the same high
impact on other teams. So that’s based on
hardcore research.
With respect to just looking at it from an
anecdotal perspective, only one General Manager
in the history of the NHL has won Stanley Cups
with more than one team –and you’ve got to go to
’30s, ‘40s to find that General Manager. And if
you look at the 30 teams that are currently in
the NHL and the General Managers who manage
those teams, no one General Manager has won a
Stanley Cup with more than one team.
Coaches are a little bit better –throughout the
history of the NHL –we’ve had three coaches who
have won multiple Stanley Cups. We had two in
the 30s and 40s with Stanley Cups with two
teams. And of course more recently Scotty Bowman
won Stanley Cups with three teams.
Team Captains –of the thirty teams that are
currently in the NHL, only one team Captain has
won Stanley Cups with multiple teams.
So both from a hardcore research perspective but
also from an anecdotal perspective, it appears
very difficult for General Managers and Coaches
who have led their teams to high performance
relative to what we would predict anyway, to
transfer [their success] to another team.
Although Richard Petty, the President of the
Toronto Maple Leafs, hopes to break the mold so
he said.
Q. Okay, this leads into my last
question, it’s kind of a fun one, how would you
rate the Leaf’s leadership?
A. Well I think Mats Sundin is a great
leader, a great on-ice leader. And I really
respect the decision he made recently not to
become a rental-player. I think Paul Maurice is
a reasonably good coach. Probably in the longer
term when I get a chance to asses him after he
is no longer the coach he’ll probably end up
being a source of competitive parity, which is
good. Fletcher as the GM will show up as a
source of competitive disadvantage in that I
think that Toronto underperformed under his
leadership. Cliff Fletcher is there as interim
GM, which I’ve stated before I think it’s a
mistake to bring in an interim GM. They should
have hired the GM that they wanted. They should
have gone for the best possible GM, hired him
now, so he could asses the team under the
competitive nature of this current season and
then improve the team over the summer so they
would do better next season.
This leads me now to the leadership higher up.
The obvious public disagreement between the
Chair of the Board and the President of the team
is bad. It’s bad for any organization. If you’re
going to have two senior leaders they’ve got to
be on the same page. They should not be making
their disagreements public. If they do have
disagreements they should be private; but in
public you support each other 100 per cent in
the decisions you’ve made. And that I think has
been really bad for the Toronto Maple Leafs.
Let me say something fun in return to your fun
question: as a Montreal Canadians fan I am quite
delighted with the leadership at the Toronto
Maple Leafs and I am quite delighted with what
Bryan Murray did with respect to Ray Emery and
John Paddock because I would love to see the
Montreal Canadians win another Stanley Cup and
not have Ottawa and Toronto in the way of doing
that.
That was Glenn Rowe, Professor of Strategic
Management at the Richard Ivey School of
Business.
Professor
Rowe's Homepage
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