Tony McKelvie · @TonyMcKelvie
6th Sep 2015 from TwitLonger
Celtic CEOs and Ducks' Backs
The failure to progress to the group stages of the Champions League, with the corollary impact on Celtic’s finances and status in the Game, has led some to question whether the club wouldn’t benefit from a change of Leadership, with much attention in cyberspace focussed on the approach and performance of the CEO.
While a good many suggest that the CEO should be replaced, few offer an alternative candidate for the role, and in this light, it seems a worthwhile endeavour on an idle September Sunday morning to give the matter some thought.
The time will come inevitably when Peter Lawwell will leave his post at Celtic and the club will need to replace him. It's worth noting that Celtic plc has only 2 Executive Directors, one of whom - Eric Riley - has resigned recently, the other being Lawwell. While Celtic has a veritable boutique of Non-Executive Directors, the Executive team comprising just a CEO and a (retiring) FD, is rather small.
While we might consider Celtic’s profile to be "big", Celtic as a business enterprise is at the small end of "large", turnover bobbing between £50M and £75M, 500 employees, total shareholders' funds of £65M.
To set this in context, there are around 2300 businesses in Scotland employing more than 250 people, cumulatively turning over around £170 Billion per annum and employing 885,000 people, benchmarking the average 'large' enterprise in Scotland at £73M turnover and 385 employees.
Set in this context, Celtic plc is a pretty average large enterprise in Scottish terms, and is ranked at number 496 on the Scottish Business Insider Index accounting for size and profitability.
In simplistic terms, there are around 500 Chief Execs leading Scottish businesses that are larger than Celtic plc and who might be considered to have the requisite knowledge, experience and leadership to successfully undertake the role of CEO at a company the size of Celtic. I’m led to believe a number of them even find the time to post on CQN.
And that's just the Scottish scene. Looking wider at the UK scene, Celtic's scale disappears from view in the grander scheme. Celtic plc, in business enterprise terms, is a pretty typical size of fish.
Given that, it would be easy to conclude that replacing the CEO would be a pretty ordinary course matter: There are after all thousands of men and women throughout the UK running businesses many times the size of Celtic plc.
That however, would ignore the reality that Celtic plc is not an ordinary business, and the role of CEO is consequently multifaceted.
A Celtic CEO must of course be capable of controlling the levers of a large business, but the job requires a detailed understanding of not only a Retail business from which Celtic derives the majority of its revenue, but myriad others, including:
A Commercial business where sponsorships and partnerships are a significant slice of the revenue make up;
A Media business in which technology and markets are emerging and dissolving at breath-taking speed;
A Football business where regulation is prerequisite to participation, where results on the pitch impact directly on business performance, and in which structural disadvantages impact profoundly on the main sources of revenue;
And a Charitable enterprise which seeks to leverage the reach of the Retail business to help those in need.
An identikit CEO of such a business might comprise a composite of Tom Hunter, Adam Crozier and Magnus MacFarlane-Barrow. Not such an easy post to fill after all.
Moreover, the role comes with a large public profile. The successful candidate requires to be able to engage with a wide range of stakeholders of myriad interests and views, while possessing the personality to carry the weight of public scrutiny.
I don't think, despite the very many businesses in the UK of greater scale than Celtic, that there are terribly many folk who could walk into the job as Celtic CEO and start work from day one.
The current CEO, Peter Lawwell, was appointed following the underwhelming tenures of Allan MacDonald and Ian McLeod, and only after a 2 year period as an Executive under Brian Quinn's Chairmanship was he given the role of Chief Executive.
He is considered to be a successful Football CEO by those in the Football business, notably Arsenal, who approached him to replace David Dein. Lawwell's current remuneration package was negotiated at that time, and reflects both his currency in the Game, and his value to the Celtic board. Liverpool have made approaches in recent years too, but Lawwell remains at Celtic.
However you might mark his scorecard as CEO of Celtic, and I have deliberately avoided doing so here, replacing Lawwell will be both challenging and risky for Celtic, and I expect that there is a succession plan in place in this respect. The most likely route, given the complexity of the job, is a 'grow your own' solution, and in due course, should a senior employee of Celtic be promoted to an Executive position and adopt an increasingly high public profile, there's your man/woman.
In the meantime, and I expect, for some considerable time to come, Peter Lawwell will remain in post, taking the periodic plaudits and the inevitable brickbats in customary, duck’s back style.