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Betsson, Cherry, Net Ent and the wisdom of crowds

3rd August 2011 8:16 am GMT

CEO Johan Öhman’s departure from Net Entertainment for family reasons means it has been all change at the top of every one of the three Swedish companies that once comprised Cherry.

Net Ent split from Cherry in 2007 while mother company Betsson left the brand with land-and-sea casino company Cherry (now Cherryföretagen) in 2006 in favour of the Betsson brand it acquired in 2003.

We christened Net Ent, Betsson and Cherryföretagen “the magic triangle” in our Q1 2011 issue of GIQ, such has been the three companies’ sustained success over a four-year period. Now all three have switched CEO during the last four months.

First Betsson chief Pontus Lindwall stepped up to become chairman in April, making way for Betsson Malta boss Magnus Silfverberg to take the reins of the whole company. Then Cherry CEO Gunnar Lind made way for Emil Sunvisson, the chairman of Betsafe, which of course was recently acquired by Betsson. And now Öhman has gone with his permanent successor yet to be named.

Our initial fear was that the “golden triangle” sobriquet we labelled them with was the journalistic kiss of death. Indeed, it has been a period of unprecedented upheaval for three companies that are renowned for their stability. But how will they be affected?

In their excellent book Soccernomics sports economist Stefan Szymanski and writer Simon Kuper use statistics to explain why England lose at football and about a zillion other footballing phenomena. In one chapter they look at the success of football club Olympique Lyon, which rose from the French second division to record a winning streak of seven successive titles and become one of the richest clubs in Europe.

The secret behind Lyon’s phenomenal success basically involves buying good players for less than they are worth. These players will win you more games and attract more fans. You will then have more money to buy better players for less than they are worth etc and so forth.

The tough bit is identifying and buying the good players. Lyon do this by using a committee headed by the owner and president (Jean-Michel Aulas), the technical director (the legendary talent spotter Bernard Lacombe), the head coach and four or five other coaches. In England the head coach (or manager) normally does it alone. On the continent it is often the technical director acting alone. Lyon, on the other hand,  are using a theory known as “the wisdom of crowds”.

“At most clubs,” write Kuper and Szymanski, “the manager is treated as some sort of divinely inspired monarch who gets to decide everything until he is sacked... Lyon never have revolutions at all. They understand that the coach is only a ‘temp’. Lyon won their seven titles with four different coaches - Jacques Santini, Paul Le Guen, Gerard Houllier and Alain Perrin - none of whom, judging by their records in Britain, is exactly a Hegelian world-historical individual. When a coach leaves Lyon, not much changes.”

While none of the Cherry companies has as yet had the managerial churn of Lyon it is tempting to look at their long-term strategy in the same manner. Both Betsson and Net Ent benefit from the wisdom of long-standing founding owners, many of whom are shared by the two companies and indeed by Cherryföretagen. The original Cherry was founded in 1963.

Lind has told me of consulting founder Per Hamberg, a “very wise man”, according to Lind, who sits on the boards of Betsson and Cherryföretagen. Hamberg’s son is a Net Ent director. Lindwall’s knowledge has been retained as chair of Betsson while his father Bill was one of Hamberg Sr’s fellow founders. If all this sounds rather familial, inbred even, remember that good qualities can be inbred and not just birth defects. 

The cult of the CEO (think Steve Jobs at Apple) is a natural byproduct of the age of personality but it does not make good business sense to entrust too much responsibility to one person.

While the head coach might has moved on from Betsson, Net Ent and Cherryföretagen, all have retained the wisdom of an enduring and farsighted crowd.

 

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