Trust the Process: What the Sixers have in Common with Successful Business Leaders (Philadelphia Business Journal, June 2018)
Three years ago on NBA draft day, we wrote an article about the Sixers’ strategy to win the long game. The struggling team found themselves mired in nearly a decade-long period of lousy performance. However, over the course of this near-historic losing skid, leaders of the Sixers organization remained immune to short-term pressure for quick fixes, and laid out a bold plan with long-term strategic intent. Three years later, in the midst of executing drastic transformation, the Sixers are now a winning team and a legitimate NBA-title contender.
Our research at Heidrick Consulting has documented the capabilities of winning organizations and their recipes for success. There are close comparisons that can be drawn between the 76ers and the world’s best companies that we deem “superaccelerators.” Namely, both the Sixers and superaccelerating organizations, such as Alphabet, Celgene, Comcast, and Visa, have demonstrated an exceptional ability to mobilize, execute, and transform with agility.
They Overcame the “Valley of Despair” with a Clear Purpose (Mobilize)
In a volatile and hyper-competitive environment, organizations and teams need to adapt and institute internal change. There is a robust empirical phenomenon termed the “Valley of Despair.” During organizational change, performance typically declines before it improves. When performance reaches a low point, there is a sense of fear and doubt that pervades organizations. At this point, many employees may disconnect from the change, causing the organization to fail – unless there is a clear and compelling North Star. The North Star will give the organization will to stay the course and survive the inevitable valleys of despair that accompany change initiatives. The Valley of Despair can be seen both in the history of businesses and in the 76ers’ quest to rebuild.
Three years ago, the Sixers finished with 18 regular season wins, making them the third-losingest team in the NBA. Things got worse before they got better. The next season, the Sixers won 10 games, putting them dead last in the league, and nearly setting an NBA record for futility. But in the midst of poor performance, meager crowds, and General Manager Sam Hinkie’s departure, the Sixers organization held a clear North Star, utilizing their young talent and draft picks to make them an NBA title contender. They continued to take a patient approach to the injuries of key players such as Joel Embiid, and stockpile draft picks that would produce 2018 Rookie of the Year nominee Ben Simmons. They took calculated risks, such as trading their 2014 1st round draft pick for Dario Saric, who was playing in Turkey at the time. Now the Sixers’ vision is starting to pay off. This year, the Sixers finished with the fifth best record in the NBA.
They Put the Right People in the Right Roles (Execute)
Organizations develop winning capabilities through great talent-development processes. Execution implies making difficult decisions on individuals who are not the right fit for the role and organizational culture. Such critical decision-making should be exercised for all levels of the organization – from front-line talent to upper management and executives. The Sixers invested considerable time and capital in finding the right players for the right roles. In 2017, they invested $148 million in Embiid’s new contract as their franchise center. Shortly after, they traded former 1st round pick Jahlil Okafor after a growing list of off-court issues and disputes with coaches. This season, they invested in strong perimeter shooting through JJ Redick, and bolstering their bench talent. And in the offseason, after concerns that General Manager Bryan Colangelo leaked sensitive information about his players, the 76ers have accepted Colangelo’s resignation in favor of a replacement who will have better relationships and trust with players and fans. The Sixers’ ownership has demonstrated an ability to make tough calls and remain resilient in the face of adversity.
They Drive Innovation and Model an Entrepreneurial Spirit (Transform)
Winning organizations challenge the status quo. Leaders within these organizations should encourage and drive experimentation to reinvent their businesses ahead of the competition. Transformation implies breaking with tradition and internal fiefdoms, rethinking the way things are done, and embracing innovation. This requires a culture of disruptive thinking, idea generation, experimentation, and rapid adoption.
The 76ers were named to Fast Company’s 2018 “Most Innovative Companies” list due to their breakthroughs off-the-court. The Sixers’ new, state-of-the-art Training Complex in Camden, New Jersey is unparalleled in size and scope in the NBA. The Sixers also provide their players with a premier nutrition program that surpasses that of many of their NBA competitors. They hired an executive chef, JaeHee Cho a former sous chef at Parc – a high-profile Philadelphia French restaurant – who created a restaurant-quality menu serving the nutritional needs of top athletes.
They Maintained Optionality while Executing their Strategy (Agility)
Too often, leaders and organizations become entrapped in the frame of binary decision-making. Strategic thinkers insist on surfacing multiple options at the outset and do not prematurely become locked into go/no-go decisions. Winning organizations can pivot their strategies in the event of unforeseen change.
While executing in their quest to build a championship-caliber team, the Sixers maintained salary cap flexibility and a healthy stock of draft picks. Before the start of the 2017-18 season, the Sixers were able to sign Redick for a one-year, $23 million deal. Redick was instrumental in helping the Sixers make the playoffs, with his ability to shoot from the perimeter and mentor young players. The Sixers’ current payroll structure has positioned them as a viable suitor for LeBron James’s free-agency, and also a potential acquirer of Kawhi Leonard or Paul George. Furthermore, the Sixers own six draft picks in this year’s draft, with one of those picks being the 10th overall pick from the Los Angeles Lakers.
The Sixers are modeling the disciplines of strategic leaders and winning organizations. In addition to the aforementioned characteristics, the 76ers have demonstrated many of the 13 drive factors that our research has proven to differentiate the best-performing companies from the status-quo. And although the current generation of players and management have yet to produce an NBA title, the Sixers opened Las Vegas bets with the best odds in the Eastern Conference to win the 2019 NBA Finals. Regardless of their fortune and our own fandom, the Sixers represent a paradigm from which businesses can learn.
Some of the concepts and examples in this article were adapted from “Winning the Long Game: How Strategic Leaders Shape the Future” by Steven Krupp and Paul J.H. Schoemaker (PublicAffairs, 2014) and “Accelerating Performance: How Organizations Can Mobilize, Execute, and Transform with Agility” by Colin Price and Sharon Toye (Wiley, 2017).