He has coached clubs in Sweden, Norway, Greece, England and the United States, and achieved his greatest successes in Denmark at Copenhagen and Aalborg.

Backe began his managerial career with Djurgården in his native Sweden from 1982 to 1984, compiling a record of 38 wins, 20 draws and only 12 losses, which included a first-place finish in the 1982 Division 2 Norra.

In 1989, he led Öster to a first-place finish in Division 1 Södra in which the club ended the season unbeaten in all 26 league matches and gained promotion to the Swedish Allsvenskan.

In July 2007, he was appointed as assistant manager at Manchester City in the Premier League, working alongside fellow countryman Sven-Göran Eriksson.

Prior to being appointed as Manchester City assistant manager, he worked as a senior advisor for Östers, as well as a football analyst and commentator for Swedish TV4.

Backe briefly resigned his position at Manchester City after a family crisis in Sweden forced him to take compassionate leave shortly into his time at the club, but after a month was able to return at his former post.