Many executives are confident they can retain their skills over time. Experience shows they are wrong
Six National Football League head coaches were fired on December 31, or “Black Monday,” as it’s known in the sport. The infamous tradition begins immediately after the conclusion of each NFL regular season and represents efforts by underperforming teams to make leadership changes.
This story is not unique to sports, of course. Based on our surveys with executives from a wide range of fields, the rate at which managers lose relevance has increased dramatically, even over just the last decade. The world is changing faster than ever before; technological advances are occurring at a lightning pace due to the increased rate at which we now exchange information.
That’s why it is more important than ever for managers to make increased efforts to stay relevant and protect against skill obsolescence. Might they learn something about the trajectories of their own careers by exploring the details of the NFL coaching carousel over the last few decades? Why did coaches succeed or fail in a league that some scholars have referred to as a natural laboratory for studying performance? When and why did previously successful coaches lose their powers?
One of the authors of this paper shared this idea with Harvard Business School Dean Nitin Nohria. Nohria remembered that he and his HBS colleague, Rakesh Khurana, had noticed a similar effect in CEO data—that some chief executives had two distinct halves to their careers, a non-linear link existing between tenure and performance. Our findings among NFL coaches now support this idea.
We examined this link between tenure and job performance among business managers, finding that some are able to maintain job performance by adapting and staying relevant, while others do not; they see their job performance decline over time, ultimately leading to their dismissal.
A link between tenure and effectiveness
We developed a simple model to analyze the relationship between coach tenure and effectiveness using NFL data from 2000 to 2015. The model used winning percentage as the outcome variable, and coach tenure and the square of coach tenure as explanatory variables, controlling for player quality, total team salary, total number of players used by the team during the season (a proxy for team injuries over the course of a season), and team control variables, which accounted for team-specific effects.
Results confirmed our hypothesis that the relationship between coach tenure and coach effectiveness is indeed quadratic in nature; that is, as coach tenure increases, team performance improves up until a certain threshold, beyond which, on average, any increase in coach tenure results in a decrease in team performance.
Based on this model, we estimate that the peak for coaches on a given team would occur around year six. The winning percentages of all coaches during the first halves of their tenures were about 15 percent better, on average, than winning percentages in the second halves. This result was significant, indicating that coaches’ teams tend to tail off after peaking. We have dubbed this 15 percent drop-off “the second-half tenure penalty.”
As expected, we observed that the longest-tenured coaches (the top quartile) had the best winning percentages overall, while the shortest-tenured coaches (the bottom quartile) had the worst. We also found that the winning percentages for coaches in the bottom quartile were nearly 24 percent worse in the second halves of their tenures than in the first halves. Coaches in the middle two quartiles also had winning percentages significantly worse in the second halves of their tenures–about 17 percent worse, on average. Finally, coaches in the upper quartile had winning percentages roughly 8 percent greater in the first halves of their tenures. All results were statistically significant.
Wanting to see if we could separate some coaches from others within the top quartile, we found that some groups of coaches were affected by a second-half tenure penalty, while others were not. Coaches that were Super Bowl winners, had especially long tenures (more than 10 seasons), or had previous experience as a head coach did not suffer significant second-half tenure penalties. On the other hand, Super Bowl non-winners, shorter-tenured coaches, and first-time coaches all fell prey to the second-half tenure penalty. Meanwhile, the age of coaches at the time of separation with their teams did not seem to be a relevant factor, nor did team history (whether or not the franchise had won a Super Bowl in the past before hiring the respective coach).
These upper quartile findings suggest that the very best coaches—those that win Super Bowls and survive for more than 10 seasons with the same team—stay consistent and win over long periods of time due to exceptional management skills. Similarly, it is plausible that some coaches with previous experience learn from past mistakes and are able to improve their skills, learning how to avoid the second-half tenure penalty in their future opportunities.
Skills that lead to long tenure and success
As we took an in-depth look at the most successful coaches, several skills stood out: Effective managers make efforts to adapt based on industry changes, as well as on team strengths and weaknesses; they get the most by leveraging competitive resources, while communicating and collaborating effectively with key organizational stakeholders; they outsource a variety of tasks where it’s wise; and they stay curious, continuously learning from others and reinventing themselves.
Let’s explore those in turn:
Adaptability. Like many industries, the NFL has seen rapid growth and evolution over the past 25 years. Multiple rounds of rule changes have occurred in efforts to gin up scoring and make it easier for offenses to pass the ball. Coupled with a growth in analytics and innovative offensive schemes, the NFL has seen an explosion in passing offense over the past two decades.
The New England Patriots and head coach Bill Belichick have been at the forefront in understanding and embracing these industry changes. The team was initially very focused on defense and a running-dominated offensive scheme, which they used to win Super Bowls in 2002, 2004, and 2005.
Partially in response to New England’s dominant defense, the NFL introduced a new set of rule changes, which helped passing offenses. Belichick understood the implications of the change. After being 22nd in the league in passing attempts in 2004, the team jumped to fifth the following season. Over the following years, the Patriots would win two more Super Bowls and advance to three others, leading the way with their passing attack under quarterback Tom Brady.
On the other hand, Washington Redskins coach Joe Gibbs was unable to keep up with changes to the industry when he returned for his second stint as head coach in 2004. Gibbs had won three Super Bowl titles in his 12-year stint from 1981 to 1992, but stepped away from the game for 12 years to focus on his other passion, NASCAR racing. The team struggled in his second stint, and many believed the game had passed Gibbs by. Illustrating this, Gibbs appeared to suffer from a second-half tenure penalty over the course of his four-year stint from 2004 to 2007, while Belichick’s teams stayed successful for an unprecedented period of time.
Green Bay coach Mike McCarthy was fired in 2018 even after leading the Packers and their star quarterback, Aaron Rodgers, to eight straight playoff appearances and a Super Bowl victory. It was believed that part of the reason for his dismissal, and the team’s poor play, was that McCarthy had not followed the rest of the league in using modern, imaginative offensive plays to sow confusion and gain advantages over opposing defenses.
Highly effective managers also have the ability to adjust strategy based on team personnel. One potential negative of success is that a manager may not realize the need to constantly adapt strategy—the old adage “when you have a hammer, everything looks like a nail” may apply.
The careers of several long-time successful NFL coaches help shed light on this concept. New Orleans coach Sean Payton has been credited for his ability to redesign the Saints offense based on the strengths of individual players that join the team. When talented rookie Alvin Kamara joined the team in 2017, the team “altered its DNA” by putting Kamara in positions to take advantage of his incredible speed and elusiveness. Kamara was a key contributor to the team’s combined record of 24-8 after his arrival.
While 39-year-old quarterback Drew Brees is playing some of the best football of his career, coach Payton is already thinking about how the offense will be different under the team’s next quarterback.
Get the most by leveraging equal resources. In hyper-competitive industries, another way that managers can stay relevant and maintain success is by finding ways to get small advantages over their competitors. The NFL stands as a great example of a market wherein organizations compete with more or less equal resources; the league’s salary cap is meant to create an equal playing field. Some teams, including the Patriots, have been able to use the salary cap’s restrictive nature as a source of competitive advantage. According to SB Nation, the Patriots “kept right on diving into dumpsters and finding prime role players” to help them maintain success for years on end.
The best managers and coaches also find innovative ways to get ahead. Belichick and the Patriots were the first NFL organization to have a full-time dietary expert on staff, added in 2007. New England was also at the forefront of the NFL’s data analytics revolution when they hired former Wall Street trader Ernie Adams in 2000. Yet another example can be seen in New England’s propensity to exploit league rules to gain a marginal advantage. For example, in a 2015 playoff game versus Baltimore, the Patriots used a loophole regarding players’ eligibility to catch passes to completely bamboozle the Baltimore defense, helping them win the game. (The NFL passed a rule change after the season that addressed the loophole.)
Great modern managers in all industries have to find ways to gain competitive advantages on the margins.
Collaborate effectively with stakeholders. The most successful managers strive to be strong communicators and work effectively with key stakeholders. Even some of the successful, long-tenured coaches in our upper quartile eventually lost their relevance due to struggles in this area.
For instance, Andy Reid was fired by the Philadelphia Eagles in 2012 after 14 seasons. Establishing stability and a winning culture for a franchise that had perpetually underperformed, he won the most games in franchise history, captured their division six times, reached the playoffs nine times, advanced to the NFC championship game (the NFL semi-final) five times, and competed in the Super Bowl once. Despite Reid’s previous success, the Eagles organization decided to let him go after the team went 12-20 in his last two seasons, and 4-12 in his final season. There were reports that the team’s players were divided internally, with different groups of players more loyal to various assistant coaches than to the head coach, and some had questioned some of Reid’s decisions.
Similarly, after the Green Bay Packers fired coach McCarthy this year, it was reported that quarterback Aaron Rodgers and McCarthy had a “fractured relationship” by the end of his tenure, and the team decided it was time to move on. McCarthy was also criticized for a lack of offensive innovation.
Both Reid and McCarthy were highly successful coaches. However, they fell into a major pitfall later in their tenures: failing to maintain strong relationships with other major stakeholders, resulting in a second-half tenure penalty. Notably, Reid is winning again in Kansas City and many believe that McCarthy will coach again; it remains to be seen whether they will avoid second-half tenure penalties in the future.
Furthermore, in an age of high turnover, leaders constantly have new “teams” to manage. Nowhere is this more relevant than in the NFL, where an average player’s career lasts just over three years. For that reason, the generation gap between coach and players grows over time, making it more critical for managers to stay relevant and connected with their communication skills.
This concept can be seen in Belichick of the Patriots. He has consistently surrounded himself with young assistants and maintained solid working relationships with leaders in the locker room. Seattle Seahawks head man Pete Carroll, in his third opportunity as an NFL head coach, was able to establish long-term success. According to The Seattle Times, one of the key reasons for Carroll’s excellent run is his ability to collaborate effectively with the team’s quarterback, Russell Wilson, and its general manager, John Schneider. It appears that Carroll improved his managerial skills over time, working more effectively with key stakeholders than during his time in New England.
Outsource less-critical tasks or tasks in areas of non-expertise. As advances in technology, analytics, and sports science have transformed professional football, the industry has become increasingly complicated. More than ever before, organizational leaders must outsource less-critical tasks, and tasks that are not in the leaders’ best areas of expertise.
For example, the Los Angeles Rams’ Sean McVay, who became the youngest head coach in the modern era of NFL history in 2017, hired an assistant specifically to be a “clock management expert” prior to his second year in 2018. Similarly, the Oakland Raiders hired a former referee to help advise coach Jon Gruden “on officiating matters, including replay challenges.” This can be interpreted as both a response to another change in the game—the increasing complexity of NFL rules, and the growing importance of the role of referees and the number of penalties—and an effort by Gruden to delegate a task that someone else could easily do for him, and perhaps do it better.
As industries become so complicated, interdependent, and competitive, managers cannot do everything by themselves. In other words, staying relevant is a team sport, and managers can only be as relevant as the people around them help them to be.
Staying curious and continuous learning. Another trait of successful managers in 2019 is staying curious and being willing to learn from different people, sometimes outside of the manager’s field. Again, we turn to Belichick, who has been known to consult with other football coaches, including the legendary Jimmy Johnson and decorated college coach Urban Meyer. Belichick has also learned from baseball manager Tony LaRussa and 42-year-old Boston Celtics coach Brad Stevens, 24 years Belichick’s junior, and about whom Belichick has raved.
Successful managers stay curious and learn from others—young and old, industry insiders and outsiders alike—to stay relevant and constantly reinvent themselves.
What we learn from the worst performers
The lower quartile, by tenure, of our sample ranged from less than one full season to exactly two full seasons. This group included some coach-team pairings that may have simply been terrible situations in which the coach had very little chance of success. For example, in his first opportunity as an NFL head coach, Carroll lasted just one season as coach of the New York Jets, during which the team went 6-10. After a 6-5 start, the team lost five straight games to end the season, and impatient owner Leon Hess fired Carroll somewhat impulsively a week later. ESPN’s Rich Cimini would later call this “one of the worst decisions in football history,” and even at the time, the hasty move was criticized by the media. While it is possible that Carroll may not have been completely ready in 1994 to be a highly effective NFL head coach (he did appear to suffer from a second-half tenure penalty), he may have also been in a near-impossible position.
But this group also included poor performers, some of whom failed to communicate and work effectively with team player-leaders, leading to situations that required rapid change. For example, Ben McAdoo was fired by the New York Giants in 2017 after less than two years on the job. According to some reports, McAdoo’s “strained relationships” with team leaders, and his “suspicions about … whether he could still command the respect of his players” played a significant role in the team’s decision to move on from McAdoo.
Cam Cameron of the Miami Dolphins was similarly let go after just one season at the helm, in which Miami had a very poor record of 1-15. It was known that Cameron had upset important players on the team for his poor treatment of Hall of Fame defensive end Jason Taylor.
The vast majority of NFL head coaches are talented and successful former NFL assistant coaches or college coaches, and it may be the case that there are certain requirements of an NFL head coaching job that are beyond the skill sets of some new coaches. For many coaches in our lower quartile, the challenge of working effectively with important team leaders was too great.
Surviving in the middle
The middle 50 percent of our sample included coach-team pairings ranging from greater than two seasons to just under five-and-a-half seasons. Many of the coaches in this group achieved some success and remained in their positions for multiple seasons. However, on average, they experienced declines in performance in the second halves of their tenures, and none lasted for six full seasons.
Unlike some of their peers in the upper quartile, it seems that they were unable to maintain relevance by simultaneously keeping abreast of changes in the game, communicating effectively with influential stakeholders, and making efforts to surround themselves with talented advisors to help them make decisions. However, they were successful enough in some facets of the job to last longer and win more often than coaches in the lower quartile. This middle 50 percent includes half of NFL coaches, and can be seen as representative for the average NFL coach; it excludes coaches with the longest and the shortest tenures.
As an example, Chip Kelly, according to The Washington Post, “arrived in the NFL in 2013 amid great curiosity and fanfare after his run of on-field prosperity at Oregon.” In his first two seasons as head coach of the Philadelphia Eagles, the team had modest success, achieving 10-6 records both years. Before his third year, however, Kelly convinced Eagles owner Jeffrey Lurie to give Kelly full control of personnel decisions. It turned into a disaster. Kelly executed a series of poor trades and the team fell apart, going 6-9 before Kelly’s firing.
In this case, despite being a strong performer in many aspects, it seems that Kelly may have failed in an area that is critical for success nowadays. As myriad industries become more complicated and unpredictable, finding the right people to help make important decisions is of the utmost importance for coaches and managers. As The Washington Post summarized, “If he’d stuck to coaching and coaching alone during his time in Philadelphia, things just might have been different for Kelly in the NFL.”
We revisit Carroll as another example of what can befall leaders. In his second opportunity as an NFL head coach, he led the New England Patriots from 1997 to 1999. The team made the playoffs the first two seasons before falling off in the third, and the team’s win total dropped by one each year before Patriots owner Robert Kraft decided to move on. Carroll believed one of his failings during his New England tenure was an inability to dispel an image of himself as too laid-back and relaxed to be a strong leader, especially since he followed the notoriously intimidating Bill Parcells. It may be argued that Carroll was still unprepared to be a good coach, as he failed to adapt his style to create a perception of strong leadership among the media and fans, and to work effectively with all members of the team.
Both of these coaches appeared to fall victim to the second-half tenure penalty, as each had a significantly worse record in the second half of his respective three-year run.
Find strong managers
Finding effective managers now is a big challenge for leaders in many industries. NFL teams are learning that it is increasingly difficult to find exceptional coaches; Sports Illustrated reports there have been 57 head-coaching changes, not including interim coaches, over the last eight years. More and more teams are taking chances on young coaches, hoping to find the next “diamond in the rough.”
Leaders in all industries are learning that only exceptional managers can be successful for long periods of time, and if the NFL is any indication, they are choosing not to commit to anyone for too long so that they can move on quickly if necessary. Managers should note these trends and make efforts to stay relevant.
The Oakland Raiders’ hiring of Gruden stands as an interesting test case. Much like Gibbs, Gruden took a 12-year hiatus from coaching before signing a 10-year, reported $100 million contract in 2018, the longest coaching contract in NFL history. While Oakland took a risk by hiring a coach that had been away from coaching for so long, Gruden differed from Gibbs in that he had remained close to the game in his capacity as a television announcer. Only time will tell whether Gruden will fare better than his predecessors who returned to the sidelines after long absences.
With many industries changing so fast and experiencing such intense competition, managers would do well to make strong efforts to stay ahead of the curve. Building on our previous study, which identified self-reflection and feedback, networking, seeing the big picture, reading widely, and working with outsiders as skills to help managers stay relevant, we can also learn from NFL head coaches by embracing adaptation, innovation, collaboration, delegation, and continuous learning. Finding, attracting, and hiring stars is difficult. Keeping hired stars relevant is an even bigger challenge.
[This article was provided with permission from Harvard Business School Working Knowledge.]