by Douglas Monaco*
The complexities of running a football enterprise – be it a club or a stock market listed team – are severe and require a permanent eye to innovation and a determined preservation of the knowledge base upon which the entity reaches its successes.
This article draws on lessons from the years 1992-1999 – known in Brazilian football circles as the Parmalat Era – to make the case for a knowledge management – KM – system to be implemented at São Paulo based, Brazilian side Sociedade Esportiva Palmeiras.
The only real source of sustainable competitive advantage is knowledge.
Management guru Peter Drucker
In our paper, we define KM as a collection of processes that includes knowledge generation, storage, transfer, and usage, and whose aim is to increase an organization’s value for its stakeholders. In essence, we can say that KM is a process of ensuring that the right knowledge is available to the right people at the right time.
Caveat: by making the case for the KM system, the article does not imply certainty that Palmeiras isn’t presently building one. Such certainty would require a level of access to internal processes that this author does not possess. The purpose here is to advocate for the importance of it not being overlooked. In case there is one already “in the oven”, all the better!
Palmeiras is repositioning itself to deal with football’s complexities
The complexity of running a football enterprise has always been there. Though in the beginning, this feature wasn’t as prominent as it is today, it’s known now that those that are slow in recognizing the trends tend to lag and the longer the delay, the costlier the catch-up.
Palmeiras is such a case as we the supporters know all too well: for one set of clear examples of the catch-up costs, simply look at the team’s performance between the years 2000 and 2014.
Its recently outgoing president said many times during his two two-year mandates “the champion of the XX century has not yet arrived to the XXI century”.
The current state of the club though is one of strong development and bodes well for the future performance. Here are some current conditions:
- Cash position is relatively strong and the predicted outgoing cash-flow composition is well balanced between debt repayment and operating expenditures.
- The sources of funding are varied and growing for the coming years: game-tickets (home stadium is frequently sold out), “supporters’ club membership” fee, sponsorship, broadcasting rights, licensed products etc.
- The team won two major national titles in 2015 and 2016 – the cup and the league respectively.
- The current team is strong and the capacity to sign well-rated players is there.
- The infrastructure processes have been constantly adopting state of the art practices in physiology, nutrition, orthopedics, performance management, people management, recruiting of players, administrative controls etc.
- The brand is probably at peak level, historically speaking, and supporters’ enthusiasm and adherence grows and strengthens by the day!
So, given this internal scenario, one can surely foresee a forever successful future for Palmeiras, right? Well, obviously not, primarily because risk is inherent to any human activity. And on top of this basic condition, the fact is that the prediction would still require important measures before it could be taken at face value.
Threats recognition and comparison with the Parmalat Era
What one can say is that the current situation resembles that of a good seed that was sowed in 2013 and begun germinating. Then, it almost died in 2014, but picked up again, bore some fruits in 2015 and many more in 2016!
Now, if the current transformation Palmeiras is undergoing is like a good plant, it must be guarded against weeds and ecosystem predators that might suffocate its development. To be sure, there are many potential problems – the political one being a well-known “batrachian-plague” that haunts “Palmeiras’ garden” since late seventies.
But, apart from politicking and its agro-zoo metaphors, most threats relate to potential scarcity of cash and of resources, i.e. if the funding sources begin to dry up, consequently the infrastructure risks deteriorating, as well as does the ability to sign high level players.
So, a massive amount of effort must be concentrated on securing the club’s purchase power by protecting the current funding sources and prospecting new ones. I am sure many within the club are busy doing it.
There is one step though that seems to be overlooked and would mean a great deal to safeguard the current developments; one that doesn’t necessarily require lots of funding, whose triggering should be relatively fast and whose existence would represent a permanent defense against occasional scarcities.
Before discussing the point, let’s briefly remember another “Palmeiras’ spring” that seemed then to foster a new age for the club, but whose promises faded with the end of the partnership that gave the period its name “the Parmalat Era”.
Then as now, we had flooding streams of cash coming in, we had star players – every year a package of new signings was a fixture in the supporters’ calendar – the team won numerous cups and championships, brand recognition and association were strong.
Then as now, hopes were high that Palmeiras would never again be “in the queue” for its turn to raise a trophy. Well, that “age” ended basically in 1999 right before the drought in titles mentioned a few paragraphs above (2000-2014) and was followed also by the humiliation of the club being relegated twice – 2002 and 2012.
The case for the knowledge management system
The point missing then, that we – “crossfingerly” – hope will not be missed this time was the skill to absorb the competencies brought in by Parmalat.
Production management, players’ selection, group management, brand exposure, budget management etc. were all processes in which Palmeiras had been behind for many years and that Parmalat exceled at.
We knew then that at some point, the partnership would be over and the money it brought with it would dry out. Therefore, we should have used that experience to LEARN from it and, on top of occasional financial surpluses the period could leave in its trail, the most important legacy would have been the know-how absorbed by the club, allowing it to replicate methods and not bury itself in failures for the following 15 years.
Okay sure, now Palmeiras is investing in the infrastructure piece and considerable amounts of cash flow are guaranteed for the coming 8 years – from Globo and Esporte Interativo.
But the pressing question is: are all new practices being properly learned and documented? Are we sure that the respective competencies are being absorbed? Just as an example, we know that one of the determinants of the 2015 and 2016 titles was Football Director Alexandre Mattos’ expertise on talent search and deal negotiation; another determinant is Cicero Souza’s skill on what people call “handling the dressing room”, i.e. the people management techniques aimed at keeping players protected from problems that can distract/disunite them.
So, given their importance, are we ready for the situation of them being snatched from our pay roll? We hear/read in the great grapevine of current day – the internet – that both have recently been approached by other clubs and preferred to remain with Palmeiras. How many more attempts will be needed to get them to change their minds?
And this goes to all great professionals currently employed by Palmeiras.
The proposition here is that we build a solid knowledge management system at Palmeiras that documents all this expertise and makes it available to the hired employee of the day.
Of course, there are personality traits that will never be transferable – mostly the players’ skills and the trainers’ game plan capacities. But, there certainly are ways to make much – if not most – of knowledge currently being applied learnable and replicable by new employees.
Doing this will greatly increase Palmeiras’ capacity to make the current situation perennial and satisfy the gigantic and growing legion of Palmeiras’ supporters, avoiding that the current windfall does not turn into another “flight of the chicken”, to use a Brazilian expression.
The benefits of such an implementation are abundantly documented in the respective literature. All that it takes is for Palmeiras to make the move and adopt one more innovation that will greatly enhance its capacity to make the current success perennial.
May the new president pay heed to the opportunity and lay the foundation that may make the difference for generations to come.
This is certainly my new year’s wish!
 “Knowledge Management Audit in a Higher Educational Institution: A Case Study”. By Robert Biloslavo and Anita Trnavcevic, published in Knowledge and Process Management Vol 14 issue 4, year 2007.
 Two examples of recently published practical literature on the theme: “The knowledge manager’s handbook: a step by step guide to embed effective knowledge management in your organization” published in 2016 by Kogan Page; and “Designing a successful KM strategy: a guide for the KM professional” published in 2014 by Information Today.
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*Douglas Monaco is 57 years old, Brazilian, and the biological child of an Italian man and a Brazilian women. Early in life, Erasmo was adopted by a family of Italian descent: becoming a passionate palmeirense was definitely his destiny. Holding two university degrees (Economics and Administration), he works as project auditor for a Dutch humanitarian entity.
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