S9 Ep54: Does sacking the manager work?

Episode Summary

Executive Summary: The episode examines Jan van Ours’s research on football manager sackings in Dutch and European leagues. Using bookmaker odds and expected-goals-based performance measures, he finds managers are often fired after poor results, but replacing them does not reliably improve outcomes—performance may rebound even without a firing. The discussion highlights scapegoating, action bias, and the limits of applying football-style firings to business management.

Main Topics: Why football managers get fired (Priority: 5/5): Managers are highly visible, blamed for poor results, and operate under constant public scrutiny, making dismissal a common response to disappointing performance. Dutch Eredivisie evidence on sackings (Priority: 4/5): Van Ours studies seven seasons of the Dutch top flight and observes a meaningful but limited sample of managerial replacements, enough to analyze patterns of firing and performance. Measuring underperformance with bookmaker odds and expected points (Priority: 5/5): The research uses betting odds as a market-based benchmark for expected performance, and expected goals/expected points to separate bad play from bad luck. What happens after a manager is replaced (Priority: 5/5): Results often improve after a firing, but the improvement is not necessarily caused by the replacement; similar improvements can occur without firing when controlling for prior bad results. Football vs business management (Priority: 4/5): The guest compares football managers with CEOs, noting similarities in stress and public relations, but emphasizing football’s transparency and temporary-manager structure. Scapegoating and action bias (Priority: 4/5): Sacking can satisfy fans and investors by signaling action, even when it may not change true underlying performance, making dismissal partly psychological and reputational. Advice to boards (Priority: 4/5): Van Ours argues boards should not expect firings to reliably fix problems, though if doing nothing also seems hopeless, trying a replacement may be a rational gamble.

Key Arguments: Football managers are insecure by design, and that insecurity is part of the job; they are paid for the risk of being sacked. In Dutch football, managers control tactics, substitutions, and motivation, but not squad composition, which limits their responsibility and influence. Bookmaker odds are a useful benchmark because they aggregate available information about likely team performance. Expected goals and expected points help distinguish poor performance from bad luck, and both predict sackings. A post-firing performance bump does not prove the firing caused improvement, because teams often rebound naturally after a bad spell. When comparing similar situations at the same club in different seasons, teams can improve even without replacing the manager. Football managers resemble CEOs in stress, scrutiny, and PR demands, but differ because football outcomes are more transparent and manager tenure is usually temporary. Research in regular business rarely finds clear evidence that replacing a manager improves performance, and fired CEOs may struggle to find new jobs for years. Firings can still be useful psychologically because they signal action and may make fans or investors happier, even if performance does not truly improve. For boards, the evidence suggests caution: firing is a coin flip, not a dependable fix.

Data Points: Seasons studied: 7 - Dutch Eredivisie data used in the research Manager firings observed: 31 - Number of managerial replacements in the seven-season Dutch sample Approximate replacement rate: About 1 in 4 managers - Derived from the 31 firings across the sample Earlier Europe-wide sample size: 264 managers replaced - Prior research across England, France, Germany, Spain, and Italy Top five European leagues: England, France, Germany, Spain, Italy - Earlier comparative study referenced by the guest Manager job security: Not very secure - Guest’s general characterization of top-flight football management CEO job search penalty: Up to 3 years - Referenced prior business literature suggesting fired CEOs can struggle to find jobs for years

Pivotal Quotes: "A manager knows that his employment is insecure. He's well paid for that." — Jan van Ours: Explaining why managerial sackings are normal in top football leagues "Results improve. So a new manager, on average, does better as the manager that was replaced. Well, this is good news. This implies the right thing happened... Am I drawing the right conclusion here? Uh uh no, you're not." — Jan van Ours: Clarifying that post-firing improvement does not necessarily mean the firing caused it "My statement would be don't get your hopes up too high because it's very unlikely that you'll be successful. But on the other hand, if you think that doing nothing will also not lead to success, you can give it a try." — Jan van Ours: Advising boards on whether to sack a struggling manager

Implications: Manager sackings often serve symbolic and psychological purposes more than performance guarantees. Boards should treat firings as uncertain interventions, not reliable cures, and weigh data on true underlying performance before acting.