To Win, a Boss Must Know How to Let Go of Power
5 January 2009
Read by 1825 persons
Jean-Michel Aulas: Success in Business and Sports
Jean-Michel Aulas, a top entrepreneur, transformed his IT services company, Cegid, into an industry leader in two decades. His love of challenges put this Lyon native, known for his sweet nature and athletic spirit, in the spotlight. He embodies the flamboyant success of Olympique Lyonnais, which has dominated French football for five years. Juggling effortlessly between a business meeting with a major client and tough negotiations for a big transfer for OL, he shares the keys to his dual economic and sporting success.
You created Cegid in 1983. Twenty-three years later, this small company has become large and is thriving. What are your recipes for longevity?
Jean-Michel Aulas: There are no recipes. If I thought there were, I believe the company would be in danger. Applying a recipe means implementing a programmed, reproducible solution. However, in terms of business development, "imagination is more important than knowledge," to borrow a quote from Jean Cocteau. To last, you must imagine that the future will be different from the past. This requires having an open mind and outlook, knowing how to question yourself, trusting others, and delegating a lot…
How did you manage to get Olympique Lyonnais off the ground, which you took over in 1987 when it was in the second division?
J.-M.A.: I had to start by convincing everyone involved (successive mayors of Lyon, bankers, players, OL employees, etc.) that football wasn't just a sport played for an hour and a half on a field, but an activity integrated into a business plan. What is the difference between these two conceptions? In one case, you bet on random future successes, which are generally synonymous with economic losses. In the other, you bet on an economic project, and the sporting project is underpinned by this economic project.
How did this approach translate concretely for OL?
J.-M.A.: We didn't say to ourselves: "We want to move up to the first division, be French champions, European champions, and then we'll build an economic model." But, conversely: "Let's build an economic model, and, since we're in professional sports, if our economic power is strong enough and recurring, then we'll build a sporting model that will be overpowering compared to others, and we'll make sporting victory "ineluctable." Since what allows you to win on the field is having the best players, the club that, with equal skills to its competitors, has the best economic model wins on the field. That's what's happening in Lyon today. We have greater economic power to acquire important players than our competitors.
By what miracle did you manage to introduce rationality into an activity like football, known for its approximate management?
J.-M.A.: I did nothing more than establish rules and procedures identical to those that exist in traditional companies. To give you an idea of the change that had to be made, when I took over OL, the day after a victory, everyone started at 11 a.m. Before, there was no one in the office: we had won and, since the only goal was to win, we could rest… I took things in hand and, with the other members of the board of directors, we professionalized all the practices.
How do you turn a football club into a cash-generating company?
J.-M.A.: For me, a football club is a company that has an industrial part: the structure that manages the footballers; with, on the one hand, the training center, where footballers are "manufactured," and, on the other hand, the professional team, which "manufactures" results. At the head of this production center, you need an engineer, a technical director: that's the coach. This industrial tool will allow us to build an economic model, based on the ability to exploit a brand, to negotiate television rights, to generate derivative products… That's already a lot, but it's not everything. In my eyes, the economic model that goes all the way is the one in which the club creates its own stadium, and doesn't just organize matches thirty times a year (which is the case for all football stadiums), but exploits it throughout the year, as a performance venue. This is the goal we are pursuing with the construction of a multi-purpose stadium, where concerts and other events will be organized, which will house a museum, a fitness center, meeting rooms for companies, etc.
This stadium will generate its own revenue and be profitable independently of football activity?
J.-M.A.: Exactly. Our goal is for the profits generated respectively by the business models of the football club, the brand and the stadium to combine in order to further boost the profitability of Olympique Lyonnais, which is already very significant. Our annual accounts at June 30, 2006, will show more than €160 million in consolidated turnover, and €10 to €15 million in net income after €25 million in depreciation, representing a cash flow of around €40 million…
How do you manage to juggle your two jobs as bosses, in activities as different as IT and football?
J.-M.A.: My first imperative is to manage my time well. I work fewer hours today than ten years ago, but I work better. I organize myself to do as much as possible in a minimum of time, but also, and above all, I "prioritize" things. This means that I don't waste my time dealing with tasks of secondary importance, or doing what can be done by someone else in the company. The most difficult thing for me was accepting to let go of power in areas that, historically, had been my responsibility. It hurt me, but it was a necessary step from the moment both Cegid and OL were developing.
In what circumstances did you feel obliged to abandon areas of power?
J.-M.A.: To be frank, I thought I was really delegating, but a number of my colleagues made me understand that I wasn't… This realization was painful, because I thought I was doing well when I wasn't going far enough. And when I had passed on some of my powers, I again experienced difficult times: when someone else was handling an approach that I had been in charge of until then and everything went well, it wasn't easy for me to live with; but when things went wrong, it was hard too, because I wondered: "Wouldn't I have been better off taking care of it myself?" You have to force yourself to take the plunge…
So you concentrate your energy on the essential missions that you cannot delegate… What are they?
J.-M.A.: I have three priorities, which are the same for Cegid and for OL: determining the strategy, explaining it - internally and externally -, but also remaining the company's top salesperson. I have set myself the goal of playing a decisive role in sales once or twice a week. At Cegid, I sign an average of one hundred deals a year, with the sales representatives. For OL, I regularly host conferences for our sponsors, meetings with our partners, etc. A leader must invest his time in the areas where he considers he is most useful to his company; for me, these are the roles of chief communicator on strategy, and chief salesperson.
Some see you as a super-manager, aren't you above all a super-enthusiast?
J.-M.A.: Can you be both? That's what I hope. To create your own company, you have to be passionate. To manage well, it's not necessary. But to be a good manager for the long term, I think you have to be passionate. And this, for two reasons. First, passion is the source of imagination. I said at the beginning of the interview that imagination is more important than knowledge. Now, there are no more pioneers in companies; however, there are laggards. The one who hasn't prepared for the future, who hasn't made the right decisions in time in terms of marketing, production, distribution, etc., will allow others to surpass him. Secondly, passion erases the risk factor. And to practice the profession of business leader for years, you have to forget that you are taking risks all the time.
Posted online January 5, 2009
lentreprise.com
Jean-Michel Aulas, a top entrepreneur, transformed his IT services company, Cegid, into an industry leader in two decades. His love of challenges put this Lyon native, known for his sweet nature and athletic spirit, in the spotlight. He embodies the flamboyant success of Olympique Lyonnais, which has dominated French football for five years. Juggling effortlessly between a business meeting with a major client and tough negotiations for a big transfer for OL, he shares the keys to his dual economic and sporting success.
You created Cegid in 1983. Twenty-three years later, this small company has become large and is thriving. What are your recipes for longevity?
Jean-Michel Aulas: There are no recipes. If I thought there were, I believe the company would be in danger. Applying a recipe means implementing a programmed, reproducible solution. However, in terms of business development, "imagination is more important than knowledge," to borrow a quote from Jean Cocteau. To last, you must imagine that the future will be different from the past. This requires having an open mind and outlook, knowing how to question yourself, trusting others, and delegating a lot…
How did you manage to get Olympique Lyonnais off the ground, which you took over in 1987 when it was in the second division?
J.-M.A.: I had to start by convincing everyone involved (successive mayors of Lyon, bankers, players, OL employees, etc.) that football wasn't just a sport played for an hour and a half on a field, but an activity integrated into a business plan. What is the difference between these two conceptions? In one case, you bet on random future successes, which are generally synonymous with economic losses. In the other, you bet on an economic project, and the sporting project is underpinned by this economic project.
How did this approach translate concretely for OL?
J.-M.A.: We didn't say to ourselves: "We want to move up to the first division, be French champions, European champions, and then we'll build an economic model." But, conversely: "Let's build an economic model, and, since we're in professional sports, if our economic power is strong enough and recurring, then we'll build a sporting model that will be overpowering compared to others, and we'll make sporting victory "ineluctable." Since what allows you to win on the field is having the best players, the club that, with equal skills to its competitors, has the best economic model wins on the field. That's what's happening in Lyon today. We have greater economic power to acquire important players than our competitors.
By what miracle did you manage to introduce rationality into an activity like football, known for its approximate management?
J.-M.A.: I did nothing more than establish rules and procedures identical to those that exist in traditional companies. To give you an idea of the change that had to be made, when I took over OL, the day after a victory, everyone started at 11 a.m. Before, there was no one in the office: we had won and, since the only goal was to win, we could rest… I took things in hand and, with the other members of the board of directors, we professionalized all the practices.
How do you turn a football club into a cash-generating company?
J.-M.A.: For me, a football club is a company that has an industrial part: the structure that manages the footballers; with, on the one hand, the training center, where footballers are "manufactured," and, on the other hand, the professional team, which "manufactures" results. At the head of this production center, you need an engineer, a technical director: that's the coach. This industrial tool will allow us to build an economic model, based on the ability to exploit a brand, to negotiate television rights, to generate derivative products… That's already a lot, but it's not everything. In my eyes, the economic model that goes all the way is the one in which the club creates its own stadium, and doesn't just organize matches thirty times a year (which is the case for all football stadiums), but exploits it throughout the year, as a performance venue. This is the goal we are pursuing with the construction of a multi-purpose stadium, where concerts and other events will be organized, which will house a museum, a fitness center, meeting rooms for companies, etc.
This stadium will generate its own revenue and be profitable independently of football activity?
J.-M.A.: Exactly. Our goal is for the profits generated respectively by the business models of the football club, the brand and the stadium to combine in order to further boost the profitability of Olympique Lyonnais, which is already very significant. Our annual accounts at June 30, 2006, will show more than €160 million in consolidated turnover, and €10 to €15 million in net income after €25 million in depreciation, representing a cash flow of around €40 million…
How do you manage to juggle your two jobs as bosses, in activities as different as IT and football?
J.-M.A.: My first imperative is to manage my time well. I work fewer hours today than ten years ago, but I work better. I organize myself to do as much as possible in a minimum of time, but also, and above all, I "prioritize" things. This means that I don't waste my time dealing with tasks of secondary importance, or doing what can be done by someone else in the company. The most difficult thing for me was accepting to let go of power in areas that, historically, had been my responsibility. It hurt me, but it was a necessary step from the moment both Cegid and OL were developing.
In what circumstances did you feel obliged to abandon areas of power?
J.-M.A.: To be frank, I thought I was really delegating, but a number of my colleagues made me understand that I wasn't… This realization was painful, because I thought I was doing well when I wasn't going far enough. And when I had passed on some of my powers, I again experienced difficult times: when someone else was handling an approach that I had been in charge of until then and everything went well, it wasn't easy for me to live with; but when things went wrong, it was hard too, because I wondered: "Wouldn't I have been better off taking care of it myself?" You have to force yourself to take the plunge…
So you concentrate your energy on the essential missions that you cannot delegate… What are they?
J.-M.A.: I have three priorities, which are the same for Cegid and for OL: determining the strategy, explaining it - internally and externally -, but also remaining the company's top salesperson. I have set myself the goal of playing a decisive role in sales once or twice a week. At Cegid, I sign an average of one hundred deals a year, with the sales representatives. For OL, I regularly host conferences for our sponsors, meetings with our partners, etc. A leader must invest his time in the areas where he considers he is most useful to his company; for me, these are the roles of chief communicator on strategy, and chief salesperson.
Some see you as a super-manager, aren't you above all a super-enthusiast?
J.-M.A.: Can you be both? That's what I hope. To create your own company, you have to be passionate. To manage well, it's not necessary. But to be a good manager for the long term, I think you have to be passionate. And this, for two reasons. First, passion is the source of imagination. I said at the beginning of the interview that imagination is more important than knowledge. Now, there are no more pioneers in companies; however, there are laggards. The one who hasn't prepared for the future, who hasn't made the right decisions in time in terms of marketing, production, distribution, etc., will allow others to surpass him. Secondly, passion erases the risk factor. And to practice the profession of business leader for years, you have to forget that you are taking risks all the time.
Posted online January 5, 2009
lentreprise.com
