The Managerial Sacking Fallacy: Why Doing Nothing is Often the Better Strategy

In this analysis of managerial turnover, economist Jan van Ours reveals an action bias that affects both professional football and corporate boardrooms. By mapping performance against counterfactuals, or situations where struggling managers were kept on, van Ours shows that the celebrated new-manager bounce is often a statistical illusion. While firing a manager offers immediate relief to stakeholders, it rarely correlates with long-term performance improvement. For leaders and investors, the takeaway is clear: the urge to do something is frequently a high-cost, low-reward ritual. Those who resist the pressure to scapegoat when performance dips gain an advantage, avoiding the disruption of turnover while allowing for natural regression to the mean.

The Illusion of the New-Manager Bounce

The conventional wisdom in sports and business is that a change in leadership provides a necessary shock to the system. When results lag, the impulse to fire the manager feels like a logical, corrective action. However, van Ours research into the Dutch Eredivisie exposes a hidden dynamic: teams that do not sack their manager during a slump often see performance improvements identical to those that do.

This suggests that what we perceive as a bounce is frequently just the system correcting itself after a period of bad luck. By using bookmaker odds and expected goals to separate performance from randomness, van Ours shows that many firings are reactive, not strategic.

Clubs that sacked the manager gained 0.21 points per match afterwards. Clubs in the same trouble that did not sack the manager gained 0.38.

-- Jan van Ours

The data suggests that the action of firing, which feels productive, actually performs worse than the inaction of patience.

The Scapegoating Ritual as a Systemic Feedback Loop

If firing a manager does not reliably improve performance, why does it persist? The answer lies in the scapegoating phenomenon, originally identified by Gamson and Scotch. Firing a manager is an anxiety-reducing ritual. It signals to shareholders, fans, and the media that the board is doing something.

This creates a self-reinforcing feedback loop. When a club is losing, stakeholders demand change. If the board does nothing, they are blamed for inaction. If they fire the manager, they are seen as decisive. The system incentivizes the firing, even if the firing is detrimental to the team actual output.

It is like an anxiety-reducing ritual that participants treat as an improvement whether or not anything improves.

-- Jan van Ours

This creates a clear separation between perceived success and actual success. The board optimizes for the optics of control rather than the reality of performance.

The Asymmetry of Risk and Reward

The disconnect between football and the corporate world is revealing. In the corporate sector, a fired CEO is often radioactive; the market views their dismissal as a signal of incompetence, making it difficult for them to find work for years. In football, the manager is often back in a new role within weeks.

This high turnover in football masks the lack of measurable impact. Because the cost of being fired is lower for a football manager, the threshold for firing is lower. But the downstream consequences remain: constant turnover prevents long-term strategic alignment. As van Ours notes, if a manager is only temporary, they lack the runway to influence the long-term health of the organization. By constantly resetting the leadership, boards ensure they remain trapped in a cycle of short-termism, unable to build the institutional memory required for sustainable success.

Key Action Items

• Audit your Action Bias: Before replacing a leader, conduct a counterfactual review. Ask: If we were in this exact position last year, would we have fired them? If the answer is yes, acknowledge that you are acting on emotion, not data. (Immediate)
• Decouple Optics from Strategy: Recognize that firing a manager is often a PR move to satisfy stakeholders. If you must replace someone for optics, do so with the understanding that it is a cost, not an investment in performance. (Immediate)
• Implement Luck-Adjusted Metrics: Use expected performance data, like expected goals in football or leading indicators in business, to determine if a team is underperforming due to bad strategy or simply bad variance. Do not punish leaders for statistical noise. (Over the next quarter)
• Extend the Time Horizon: If you find yourself in a cycle of frequent turnover, recognize that the disruption itself is a performance drag. Commit to a 12-18 month no-fire window to allow for natural mean regression. (This pays off in 12-18 months)
• Prioritize Institutional Memory: In sectors where leadership turnover is high, focus on building stable middle-management layers that can maintain continuity when the figurehead is inevitably replaced. (Over the next 12 months)