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The rule of thumb

Following the 2008 financial crash, Bank of England chief economist Andy Haldane looked into what factors caused the crisis. He discovered that breaching the regulations set out in Basel II – a complex 347-page document that attempted to ensure banks remained safe – proved a less effective predictor of failure than a crude rule of thumb: highly leveraged firms were more likely to fail.

In other words, Haldane concluded, “less is more”.

We could learn from this approach in football. Like Haldane, we have a few rules of thumb we use with boardrooms:

These rules of thumb create a starting point for decisions that require us to compute a lot of information. Decisions like: should we change our manager? Or: where should we prioritise our squad expenditure?

While recognising that smart clubs have reliable and often complex processes that enable better decision-making, sometimes a simple rule of thumb can set us off on the right path.

About Omar Chaudhuri

Omar Chaudhuri has created 129 entries.