The Real Madrid Way: How Values Created the Most Successful Sports Team on the Planet

by Steven G. Mandis

Real Madrid’s secret to dominance on and off the field is the passion and values of their community members.

AT THE CENTER of the Real Madrid way for success are the values of their community and resulting culture.

When I ask US sports fans, “What is the most valuable sports team in the world?” the most common answers are “the New York Yankees” or “the Dallas Cowboys.” When I tell them the answer is Real Madrid, most people are completely shocked.

Simply put, the shared ethos, expectations, and values of the Real Madrid community dictate the operations, behavior, and mission of every aspect of the entire club. The values and expectations of the community drive the decision-making throughout the organization, from on the field (in player selection, player behavior expectations, style of play, and priorities) to off the field (in business and management characteristics, strategy, marketing, investments, financial reporting, human resources, and technology).

Why has Real Madrid been able to win? Money, certainly. Talented players, of course. Data analytics, without a doubt. But these are only elements of the Real Madrid way. Real Madrid’s executives believe that, in the end, it is a team’s culture that has the greatest impact on performance on and off the field. To them, culture means everyone working around a common mission in a selfless way and everyone knowing the goals and how to achieve them in a collaborative way. What makes Real Madrid such a fascinating case of organizational management is that their entire strategy both on and off the field is based in the adherence to the values and expectations of their community members—the community dictates the culture.

Management consulting firm McKinsey & Company has highlighted the importance and value of culture.43 The firm, through a survey of hundreds of companies in North America, Europe, and Asia, found 66.7 percent of business leaders felt culture provided their greatest source of competitive advantage. In addition, McKinsey & Company found that companies with effective organizational culture outperformed peers significantly. In fact, those companies with high-performing cultures delivered significant performance improvement, 300 percent higher annual returns to shareholders than companies with undefined cultures.

Suggesting culture as the most important ingredient to winning on and off the field poses some challenges. Culture is hard to define, let alone analyze, measure, and compare, and it is difficult for the media to report on culture. It is much easier to reference and compare performance data and statistics for insights.

Every winning culture has its own authentic personality and soul that can’t be invented or imposed. In organizations, culture is an invisible but powerful force that influences the behavior of the members of that group. Most often the values of the founder or owner or a legendary top executive are instilled in the organization and shape its culture.

mission statement’s aim is to provide focus for management and staff. Typically, it defines the company’s business, its objectives, and its approach to reaching those objectives.

The purpose of a values statement is to describe the desired culture and provide a behavioral compass or set of behavioral expectations for the organization.

Florentino had built Grupo ACS through acquisitions, and he had found that it worked best to leave each company with its own brands/identity and decision making, but to have them all follow a single codified, written strategic mission and set of values.

Conventional thinking in sports was that the single mission and value of every team was simply to win—nothing complicated about that.85 What Florentino was tapping into was why the club exists and how community members wanted to win on and off the field.

Real Madrid’s employees and community members seemed to know implicitly what the answers were, but they had never formally written them down. Florentino wanted to spell them out explicitly so that everyone in the community could read them and the club could be held accountable to them, especially as the organization grew.

A company’s values are the core of its culture. Values expressed in a mission offer a set of guidelines on the behaviors and mindsets needed to achieve that vision; it acts as a filter for decision making.

Conventional wisdom is that the mission of a sports team is simple and obvious: “Win a championship.” However, there is a difference between a “goal” and a “mission with values.”

Neel Doshi and Lindsay McGregor, former McKinsey & Company consultants and authors of Primed to Perform (New York: Harper Business, 2015), proved through their research that “the highest performing cultures are built on the simple truth: why people work affects how well they work.”

one of the first actions Steve Ballmer, the former CEO of Microsoft from 2000 to 2014 and graduate of Harvard College and Stanford Business School, took after he purchased the Los Angeles Clippers was to develop a mission statement. Along with coach Doc Rivers, Ballmer developed the “Clipper Credo.” It’s a one-page document about teamwork and integrity.

Not having a mission and values statement is like showing up to play a game with the goal of winning, using a stick to draw up a few plays in the dirt or trying to wing it by remembering what the team did last week, and expecting the players to be able to execute as a unit.

An organization is a team, just like a soccer club. The mission and values statement is an “organizational playbook” so all team members clearly understand their individual roles as well as their organization’s purpose. Without this mission, the team can’t maximize its performance.

Real Madrid, for example, treats the person who is an assistant in the marketing department just like a player on the team and expects very similar behavior from both. Business employees and players alike have access to top management. Everyone from the boardroom to the locker room feels valued and goes in the same direction.

Real Madrid has a captain and a vice-captain. They appoint team captains according to seniority, not by election.

Real Madrid believes that a captain with seniority and considerable experience on the field garners credibility from both players and management. Real Madrid’s approach also ensures that the team captain has been around long enough to have absorbed Real Madrid’s history, tradition, rituals, and values, and is able to model them on and off the field. When I questioned whether this approach could lead to a mediocre (by Real Madrid standards) talent becoming captain and jeopardizing his ability to lead a superstar, Real Madrid responded that, essentially, if a player has been at the club that long, then he must be an exceptional talent, and if he could survive the intense competition, scrutiny, and pressure for that long, he has everyone’s categorical respect and admiration.

WHAT IS THE GREATEST competitive advantage? Real Madrid’s executives believe that, in the end, it is a team’s values and culture that have the greatest impact on performance on and off the field.