Martin's blog

Managing a mutual

Posted on May 31, 2012

Pep Guardiola managed his final game for Barcelona FC at the weekend, with his team winning 3-0 in the Spanish Cup final.  After 4 years in the job and collecting 14 trophies, Pep has been credited with doing an outstanding job, but is standing down as manager to take a break from the intensity of the role.

Barcelona FC- widely recognised as the best football club in the world- is a mutual.   It is a lesson to all Mutuals, that being owned by your customers (fans), does not prevent you from achieving best in class status.  Indeed the mutual ethos of Barcelona has done much to contribute to that success: whilst the club attracts top class internationally players, it also nurtures its own talent.  Their best player, Lionel Messi joined the club as a young and sickly teen, and the club invested many years to develop his skills.   And just as important, the club has created the environment in which Messi and Guardiola have grown- the absence of maverick owners has provided continuity and a shared interest in success- in the Boardroom and in the stands.

But managing a mutual is not an easy option- hence Guardiola's decision to take a break.  It is true though that the challenges of managing performance are not clouded by excessive or contradictory demands from shareholders.

In football, so too financial services.  In the last few days I've attended the Annual General Meetings of three Mutuals.  It was revealing to observe that each of the three Chairman's opening remarks commented on the external business climate: that financial services is going through tough times, and that being a mutual contributed to a creditable performance.

Each AGM was typified by courteous exchanges between members and the Board.  Clear explanations of business progress and investment strategy were presented.  Members were ready to give credit to managers doing a good job.  Each was rounded off with lunch and a chance to meet the staff and Directors.

Just as importantly, each event witnessed very strong votes in support of the organisation (from proxy voters as well as those in attendance), and there was no sign of the strife over remuneration that has been a symbol of the shareholder spring.

If I could wish for one thing, it would be that more members were involved in the AGM.  Naturally not everyone can travel to the meeting- and indeed the thousands of postal and electronic votes received always outweighs enormously the more modest numbers attending in person- but it would be a welcome move to see concerted efforts from Mutuals to highlights the rights of members as well as the benefits of taking part in the AGM, so that in turn more members make the most of their opportunity to register their views. 

Barcelona play to 100,000 fans a week- most of them part-owners, and you can guarantee that they very readily appraise the manager and team on their performance.  Given the highly agitated nature of financial markets, feedback that is so immediate may not be productive; but an annual opportunity for members to voice their support for their mutual should be.

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