From Paolo Maldini to Sir Alex Ferguson, risk managers can learn from the strategies deployed on the football pitch. And the greatest lessons come from the invisible defender: the goalkeeper or, in other words, the risk manager, writes Adriano Lanzilotto, vice-president, client service manager, (London operations) at FM Global

Sir Alex Ferguson, the most successful manager in British history, was occasionally susceptible to cognitive illusions. In August 2001 the Scot decided to sell the Dutch international defender Jaap Stam to Lazio. The move surprised everyone. Some thought Ferguson was punishing the Dutchman for a silly autobiography he had just published. In truth, although Ferguson didn’t say this publicly, the sale was prompted partly by match data. Studying the numbers, Ferguson had spotted that Stam was tackling less often than before. He presumed the defender, then twenty-nine, was declining. So, he sold him.

Later on, Ferguson would call the decision the biggest mistake of his career.

The ”Maldini Principle

No doubt to some the story would serve as a warning as to the dangers of reducing football to a stream of numbers; to us, though, it simply proves that defence is not just undervalued in football, but valued entirely incorrectly. This is because of a psychological phenomenon that gets in the way of understanding defence: we remember, and place undue significance on, things that do happen while ignoring those that do not. As the psychologist Eliot Hearst explains: ‘In many situations animals and human beings have surprising difficulty noticing and using information provided by the absence or non-occurrence of something … Non-occurrences of events appear generally less salient, memorable or informative than occurrences.

As a result, people discount causes that are absent (things that didn’t happen) and augment the importance of causes that are present (things that did happen). This influences how we think about football: not only do we consider the goals that our team score more important than the goals they do not concede (but crude numbers prove otherwise), but we value the tackles they make more highly than those challenges that their preternatural sense of positioning, their game intelligence, mean they do not need to make. That is where Ferguson went wrong. He needed to engage in counterfactual thinking: Stam was not doing as much, but that was not a sign of weakness, it was a sign of his quality. But because Ferguson could not see those unmade tackles, he did not value them.

There was no greater exponent of this than Paolo Maldini, the legendary former captain of AC Milan and Italy. Maldini, famously, rarely made a tackle. Mike Forde, Chelsea’s director of football operations, reckons Maldini made ‘one every two games’. Maldini never had to get his legs dirty because he was always in the right place to cut off the danger. The best defenders are those who never tackle.

This is difficult to accept – even for Ferguson – because it requires us to engage in counterfactual thinking – that is, we need to imagine a world that is counter to the facts, a world that does not exist.

Tom Gilovich, the myth-busting basketball psychologist, suggests that counterfactual thinking is hard because of the way people form causal explanations for events. As a general rule, when trying to explain an outcome we see in the world, people tend to think harder about things that happen than things that don’t.

This bias towards seeing what is there and ignoring what is not makes valuing defence difficult. Attacking has one simple best outcome: a goal. But defending is quite the opposite: there, the best outcome is a goal that is not conceded, an event that does not actually happen. That may be because of a shot that did not come or a cross that was not made or a through ball that could not be weighted properly. No wonder defenders don’t win the Ballon d’Or: those who did can be counted on the fingers of one hand (Cannavaro, Beckenbauer), while only one goalkeeper, the legendary “Black Spider”” Lev Yashin, managed to grab it almost 60 years ago.

The invisible defender

I have all but cut & pasted the narrative above from a very interesting book I’ve just read, called The numbers game by Chris Anderson and David Sally. It’s a deep-dive into the data and analytics surrounding football, busting myths and revealing surprising and counter-intuitive truths about the game. Call it professional deformation, but while reading it I was fascinated by some of the parallelisms and analogies that can be construed between what happens on the pitch and the rolse of risk management in a modern multinational company.

Let’s think about the role of a risk manager for a moment and its evolution in the last 10-15 years. In their most basic manifestation, risk managers are there to make sure things do not happen. The innovation team winning awards and press recognition, the sales department conquering new markets, the marketing people crafting daring campaigns, the research & development diving into the future, all these will be high up in the visibility scale, but not the risk manager.

The Risk Manager is there to ensure resilience and compliance. Ideally, they should never find themselves in the need to tackle. They need to anticipate, be in the right place and the right time, be there when things can turn sour (but make sure they don’t), read the game ahead of everybody else. But at the end of the day, risk managers will only be visible when things turn bad…I’ll come back to this concept.

Risk taker vs risk averse

A key element to consider is the different approach to risk taking between forward, attacking players and defenders, in particular goalkeepers. Attacking players and midfielders tend to take a lot of risks, relying on the large amount of the opportunities that present to them during the course of a match.

Strikers have to try to overcome the opposition through footwork mastery and innovative trickery, they are the “R&D” of football. A number 9 can shot in the goal 10 times and miss every single time - and still be praised for “trying”.

A number 10 could try step-overs, dribbles and long passes and fail them all – yet they will be idolized if they get the decisive one right at the last minute of the game. All this excites the supporters and make the news.

A defender, on the other hand, must take no risks. One mistake and you are out, forever remembered for the blunder. Countless young goalkeepers and defenders have marked their career forever with just one mistake, no matter how good they had been until that moment and no matter how unlucky they were – a bump on the pitch, sunlight in their eyes, obstructed view, a wind gust etc.

Similarly, the success of a company comes down to their innovation drive, to the charming skills of their salespeople, the slickness of their supply chain or to the excellence of their finished product design, but never to the ability to be resilient in the face of adversities.

But if something bad happens, all the fingers and the eyes will be pointed at the risk manager: why has this happened? Where is our business continuity plan? Are we insured? Who is our risk manager, by the way?

Isolation vs. team-working

How many times have you encountered risk managers self-imposing the now politically incorrect title of ”one-man band”? Risk managers have too often worked in isolation, like goalkeepers. Sure, they are part of a team, yet alone in their role and protecting a goal that looks huge.

However, goalkeepers have a unique vantage point as they can see the whole game strategies developing in front of their eyes, they can evaluate the competition’s state of mind, they have time to think, study. analyse, predict, anticipate, sometimes even more than their own managers who are busy protesting against the referees’ decisions. During the half-time break, it’s the goalkeeper who provides the more insightful feedback to the team, suggests changes in strategy and tactic to improve their performance.

In the same way, risk managers have more than anyone else in the company the opportunity to build bridges and break silos between different departments and operations, becoming a gel that is able to keep everybody together: horizontally by connecting geographies and operations, vertically through interactions across the many levels of the organisations, from shop floors to the board.

Turning risk into opportunity

Another element is linked to the evolution of the role and importance of risk management within the governance framework of a company.

In most of the good teams of modern football every attacking move starts from the defence. Even in the old, out-of-fashion, ultra-defensive football of which Italians are considered still the undisputed masters (catenaccio and contropiede), the strategy called for the defenders or the goalkeeper to immediately overturn an attacking play by the opposition into a lightening counter-attack, often with a precise long ball thrown from their own penalty area towards the striker at the other end of the pitch.

Nowadays, the importance of defenders, including goalkeepers, in the genesis and unfolding of any attacking scheme is definitely recognised. Defenders and goalkeepers are generally older and more experienced than the rest of the team; their sense of position on the pitch help them foresee where the game will go and therefore capitalise on opportunities once a risk is avoided.

This is indeed about transforming a risk into an opportunity, on a pitch like in business; the advent of enterprise risk management has come with an understanding that risk managers can act as business enablers by exploiting positive risks through sound, informed, data-driven decisions.

The role of risk management turns from a pure barrier to stop, deflect or intercept external risks as they manifest themselves to a spring-like strategic tool, proactively anticipating future trends and patterns and seeking opportunities for business growth.

Resilience is a choice

Final of the FIFA Women’s World Cup 2019: the two teams are exhausted after 90 minutes (plus extra time) of outstanding football in a sweltering Paris evening. The result is 2-1 to us, we are bringing this home. At the 94th minute, just a few seconds away from the final whistle, disaster strikes: a penalty kick is awarded to the opposition: nobody’s sure what happened, everybody’s hoping for the VAR to clarify the situation. Endless seconds, the VAR results are in: It’s a handball, it’s a hurricane! what a chance for the competition, what a catastrophe for our hopes!

This is the last thing we need at this moment in time. Not at the end of a crucial game, not at this point in the year where our sales reach the peak. The eyes of the entire world are on the goalkeeper: supporters at the stadium and at home, journalists, radio and TV stations, investors, the board, the competitors, the damaged plant’s employees. Suddenly the risk manager can become the pivot of the game.

The goalkeeper is ready, she has a plan. She has studied all the penalties taken by the opposition’s player. She knows exactly where the ball will go, and how fast. She has bought the right insurance coverage, facilitated the creation of a reliable business continuity plan and sold to the board the importance of securing the plant’s roof. She has chosen to be resilient.

The striker kicks…and IT’S A FORMIDABLE SAVE! The team gathers around the risk manager, the roof remained intact, normal operations resumed in 2 days while havoc is all around. The competitors are in shock, the newspaper titles are quickly changed, a counter-attack immediately start.

Resilience has won, thanks to the invisible defender.