Alex Ferguson's style of management was innate, with a faint whiff of violence

The commonest myth about leadership is that it’s a skill. It isn’t.

Everyone knows that athletes have to make a virtue out of unreflectiveness. A blank mind, the absence of irrelevant thought, an ability to forget the past, to block out the future, to exist in the moment – these are the psychological traits of most great players. “Just do it” – the best known of Nike’s slogans – said it best. That is why sportsmen often dry up when asked to explain what they were thinking, let alone how they were feeling. As little as possible is the honest answer.

Having read Alex Ferguson’s autobiography, I am beginning to think the same can apply to management. This is much more of a shock. Whole industries – not just management books but also the lucrative lecture circuit – depend on the assumption that we can draw transferrable “lessons” by exploring the theories of successful leaders. The truth is much more uneven and complicated.

Some leaders do proceed according to principles that fit into a theoretical framework. Billy Beane, the general manager of the Oakland Athletics baseball team, enabled his impoverished team to beat much richer ones by exploiting inefficiencies in the transfer market. He has tried to turn management into a science. This is leadership by methodology – thinking or, more accurately, calculating your way to victory.

Yet there is a different type of leader, who depends on something much simpler and harder to emulate: the innate force of their personality. Ferguson was firmly in this latter camp. His theoretical musings are much less interesting than those aspects of his personality that elude reflectiveness, even now.

The commonest misconception about leadership is that it is a skill. It isn’t; it’s an effect. Ferguson’s presence changed how people acted. Central to that was his fierce and unslakeable competitiveness. I began the book wondering why a septuagenarian knight of the realm was traipsing around the nation’s supermarkets signing hardbacks, still selling his side of the story – how could he be so dismissive of his former players, why stoop to that level? Then, I realised that it was all magnificently in keeping with his character. Sniping, fighting, settling scores: you don’t need Ferguson to explain what he was good at; he is still doing it as you read. To learn from this book, ignore the theory, feel the venom.

It is all too easy to point out the logical flaws in Ferguson’s book. “Always tell them the truth,” he writes about his relations with players. You know what he means but it is clearly untrue. Always? When they are vulnerable, when you are rebuilding their self-belief, when they are tending towards conceit? No, the truth is just one psychological weapon, alongside bluff and all the others. The question is when to tell them the truth and how.

The book also resiles from explicitly admiring power, even though the pursuit and preservation of power is the book’s subliminal theme. The only time he explicitly mentions the term, he denies it is relevant, as though power were a dirty word, perhaps tainted by capitalist overtones. He prefers the word control. I can’t see the difference.

Ferguson’s personality was naturally coercive. Violence is the most underrated of all leadership traits (and I write as an ex-captain who had no gift for it at all). By violence, I do not mean the use of violence or even the threat of violence. I mean the possibility of violence. Sport is about confrontation. In the vast majority of sports, that confrontation is abstract. Physical blows become metaphorical blows. Where the boxer strikes directly with his fist, the tennis player does so by hitting a ball with his racket from the safety of the other side of the net.

However, even in non-contact sports, something of that underlying physicality survives the process of translation. Some players, a few lucky players, seethe with the threat of violence. They do not have to do anything to prove it; you simply know it is there. You see it in their eyes. With some opponents – even though rationally I always knew there was almost zero chance that the cricket match would descend into trading blows – something much more powerful than rationality advised me not to test my assessment of the “almost zero chance”.

Managers, too, benefit from the same quality. No leader achieves greatness by punching people. Quite a few, however, benefit from the impression that it would be a grave error for anyone entirely to rule out the possibility. Ferguson was a publican before becoming a manager. “Sometimes I would come home with a split head or black eye. That was pub life. When fights broke out, it was necessary to jump in to restore order.” Try imagining Arsène Wenger having done that – or boasting about it later if he had.

Ferguson also recognised his own brand of physicality in others. He liked to have enforcers in his side – and on his side. When the iron-willed Serbian defender Nemanja Vidic told his manager that he might go to fight in Kosovo, Ferguson purred with delight: “He had the eyes for it.”

In one crucial respect, this book is anything but a sell-out. It is a football book through and through. It has little time for abstract theory. It is concerned with the nitty-gritty – judging players, sacking people, conquering rivals, quelling uprisings. Trying to write a grander, more elevated book would have been dishonest in tone as well as substance.

At the heart of this book is a paradox that unwittingly skewers the premise of the genre: to lead like Ferguson, you first have to be like Ferguson, which requires you not to be trying to be somebody else. The people I feel sorry for are not the targets of his pen, not Beckham and Keane, but the students at Harvard Business School who are undoubtedly already underlining the wrong sentences – such as, “Tell them the truth” – and ignoring the crucial point, never written down but always felt by the reader: you can’t fake it.

Ed Smith’s latest book is “Luck: a Fresh Look at Fortune” (Bloomsbury, £8.99)

Sir Alex Ferguson, celebrating a victory. Image: Getty

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 06 November 2013 issue of the New Statesman, Are cities getting too big?

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.