Everything you need to know to avoid requesting something unworkable without practical results.
STEP BY STEP: ADVISORY
We have reached the stage where you have a due diligence report to guide your entire decision process. With the minimum effort parallel to the due diligence, the club can now begin to predict its cash flow, knowing where it loses thousands of resources, and is aware of its control failures that need to be corrected promptly.
It is time for consulting. But again, no governance. Much less IT, except that your club is still in the stone age in terms of technology.
Governance, at this point, serves the narrative. Governance gives the consultant effortless money to deliver an organization chart and a control framework and let the club handle it. Consultants will suggest names and new roles, plus expenses, both in hiring and termination. They will copy how other clubs are structured, mainly European, that live a reality opposite Brazilian ones. Or worse, advisors will be used as independent actors to distribute positions for the clubs’ politics, friends, and any personal indication.
The first consultant to be called at this time is for restructuring. This advisor will drive for financing the vast debs, propose cuts in expenses, and seek a minimum structure, not the ideal and perfect one delivered in consultancy work here in Brazil. A minimum structure makes the club generate annual gains to pay off its debts and seek real financial restructuring in the long term.
If you need a consultant to put together an organizational chart for you, your place is not in club management. It doesn’t make sense to establish an entire structure with many personnel when your club is barely insolvent.
You can also call advisory services regarding internal controls improvement, but people who get their hands dirty designing and implementing routines and not just give you improvements lists and designating responsible for each item. It is necessary to make it happen and not pretend that you have provided some consultancy.
Good consultants will suggest a transformation of the business model at this stage, from associative, “not for profit,” to a corporate one. If you have common sense, you can evaluate the hiring of legal services in this sense, for study, together with restructuring personnel, who have networking to find potential investors.
This abolition of the clubs’ association model in Brazil is an issue too complex. I promise to write a lot about it soon.
I want to conclude this part with some extra clarification to avoid any governance misinterpretation of my point of view.
I was fortunate enough to work with spectacular professionals, audit, and consulting partners competent. One of them, a Portuguese gentleman, very kind in his treatment and very severe in the review process, said something precious, which I will summarize here. Governance and compliance were inherent characteristics of any management. It did not make much sense to address governance improvements or to have an exacerbated focus on compliance. After all, if this was necessary, it was an indication that an organization had managers below its responsibilities.
This discussion occurred outside the football environment, in those cross-selling internal meetings at Big4. These emerging practices kept asking auditors for help in selling services to them.
When you think with a little more attention to Brazilian football, the noble Portuguese partner’s thought gains even more wisdom.
The Brazilian club officer, as a rule, falls far short of what is desired regarding skills. Therefore, the solution is more linked to changing the manager’s profile than hiring a governance consultancy. You don’t put a Ferrari in the hand of a seven-year-old child, do you?
As I see it, the board of directors seeking governance advice shows an inability to perform its functions. It sounds excessively aggressive and will cause me some personal annoyance (most reels know me or know someone who knows me), but it is how I think. I’m not here to mess around with anyone, let alone help sell “drying ice” services.
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