The Beautiful Game: Surprising Insights from the World Cup about Strategy and Teamwork


June 18, 2018 [World Cup, TeamWork, Collaboration, explanatory power]
Christian Hoffmann, CFA

Team performance matters more than star players or a large resource base. And in a rapidly changing world, Totaalvoetbal can help teams adapt.

This year’s World Cup in Russia will likely be the most-watched sporting event in history, topping the estimated 3.2 billion viewers who caught it four years ago in Brazil. Thirty-two national teams earned a right to compete in this tournament following years of successful match play among two-hundred teams from six regions.

How did the qualifiers make it? Are there particular factors that determine success, and could they apply in other arenas, such as asset management?

In soccer, you might think that success would be all but guaranteed with a superstar player, a large population base and perhaps economic resources. Certainly, all of these factors help, but not one has explained a World Cup champion in the modern era. Arguably the greatest player of our generation, Lionel Messi, has been unable to deliver a World Cup trophy to his country, Argentina, despite phenomenal play on the pitch (field) and multiple appearances at the tournament.

The most populous countries—China, India, and the U.S.—didn’t even quality for the tournament this year and each holds a somewhat dismal standing within the current world ranking (75, 97, and 25, respectively). The correlation between wealth and performance is also weak at best, with many very wealthy countries not qualifying (e.g. Norway and the U.S.) or simply fielding a weak team (e.g. Saudi Arabia and Australia).

Among oddsmakers, historical powerhouses Brazil, France, and Germany are favored to win the tournament this year. Interestingly, since the inaugural tournament in 1930, only eight countries have won the competition at all, including: Brazil (five wins), Germany and Italy (four each), Argentina and Uruguay (two each), along with England, France, and Spain (one each). Brazil, of course, is a giant developing country of 207 million, while neighboring Argentina has barely one-fifth that number while Uruguay has just one-hundredth. The four European champions all sport large populations, developed economies and high income levels. What is this relatively disparate group doing that scores of other nations aren’t?

Goldman Sachs has created a statistical model to forecast World Cup outcomes. Among the predictive factors, number one was team performance, with 40% explanatory power. That was followed by player-level characteristics, with 25% explanatory power. Is this any surprise? At Thornburg, we have long espoused the virtues of collaboration among versatile members of a highly flexible but structured team.

How does flexibility work in practice? In soccer, it might be totaalvoetbal, a Dutch strategy that translates to ‘Total Football.’ The tactical idea is that any player stands ready and able to play any position on the field at any point in time. During the course of the game, players will change positions frequently and fluidly, adapting to any variety of situations. Many teams have found success with this dynamic framework, including Spain in 2010, which won the championship and continues to field a top-ranked team.

As investors at Thornburg, we also play both defense and offense, simultaneously analyzing current and potential investment opportunities across investible asset classes, industries, and geographies. Our entire investment team plays on one pitch (the trading floor). We are not looking at opportunities from one spot on the field, but from the entire field, attempting to capitalize on undervalued, misunderstood, and mispriced assets.

A team is the sum of its parts, but it can also be something more. When players are encouraged to be proactive and fluid and the team is in constant communication, it can move faster and more efficiently than a team dictated by rank, position, and top-down command and control. Imagine if the coach were also a player. At Thornburg, every portfolio manager is also an analyst.

If history is any guide, this World Cup will be filled with moments of euphoria and grief, with beautiful plays and deplorable deeds. Like the investing world, unexpected events will affect outcomes in wild and unpredictable ways. One thing is certain, though: the team that wins will win expressly because of its success as a team. Portugal won the 2016 European Championship without superstar Cristiano Ronaldo, who was stretchered off the field early in the game and the team was forced to step up and work together. The team’s speed and collaboration shifted to overdrive, and it won a hard-fought victory over France late in the game.

Successful teams most often consist of versatile players working flexibly in tandem amid dynamic, often challenging conditions. In our view, that’s as true in soccer as in asset management.


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