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Would Jeff Bezos be a good NBA GM? As Zach Lowe talked to Kevin Arnovitz in June 2017 about the NBA draft and offseason I kept thinking, ‘these ideas sound familiar. Oh, yeah, that’s Jeff Bezos!’ Specifically:
- Wait for the right pitch.
- Have top down support.
- Make good, not perfect, decisions.
Let’s see how Kevin Arnovitz and Jeff Bezos think a basketball team should be run.
1/ Optionality (does your ship have enough life boats?)
About the Boston Celtic’s plans, Arnovitz said: “we could pivot relatively easy.”
Bezos said: “We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.”
The optionality that Arnovitz (praising Danny Ainge) and Bezos want to “harvest” is trading a little now for (possibly) a lot later. The Celtics traded down in the 2017 draft to get more options for the future.
Warren Buffett says this is like waiting for the right pitch in a game of baseball with no called strikes. In his podcast, Bill Simmons said that the Celtics must have seen something they didn’t like to trade back with their first round pick. Danny Ainge didn’t like what he saw. When you do see something that could be great, it’s time to take a big swing.
Bezos said, “In business, every once in a while, when you step up to the plate, you can score 1,000 runs. This long-tailed distribution of returns is why it’s important to be bold. Big winners pay for so many experiments.”
2/ Decision makers at problems.
Why can Danny Ainge do this asks Arnovitz? “It’s a good case study for why stability and trust in your front office is really important.”
At Amazon Bezos likes to have “two pizza teams.” That is, if a group is working late on something, there shouldn’t be so many people that they can’t be fed by two pizzas. In The Everything Store, Brad Stone quoted Bezos;
“‘A hierarchy isn’t responsive enough to change, I’m still trying to get people to do occasionally what I ask. And if I was successful, maybe we should have the right kind of company.’ (said Bezos). Bezos’s counterintuitive point was that coordination among employees wasted time, and that the people closest to the problems were usually in the best position to solve them.”
Putting people close to problems they can solve happens in two ways. One option is for the existing decision maker to go to the front lines to see what is happening. Sam Hinkie and Daryl Morey both travel to see prospects. Intelligent Fanatics talk to their customers.
The other way is for decision making to be delegated down to the person at the problem. This is part of the decentralized command that Jocko Willink, Eric Maddox, and The Outsiders.
3/ Threading the needle. Arnovitz said that the teams who can sign Paul George; have the assets to trade for him, believe they can resign him, and will be competitive with him. “This Venn diagram is a nail hole.”
In his 2017 letter to shareholders, Bezos wrote; “Most decisions should probably be made with somewhere around 70 percent of the information you wish you had. If you wait for 90 percent, in most cases, you’re probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure.”
Royce Yudkoff said this is just as true for small businesses too. You’ve got an ideal punch list and you’ve got reality. How much compromise can you make between the two?
This is why we see that people are never ready for their next role. It was true for Kara Swisher when she moved to TV. It was true for Troy Carter when he started managing Lady Gaga. It was true for Ty Warner when he started the greatest toy company of the 1990s.
Thanks for reading,
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[…] There are few basketball commenters more thoughtful than Zach Lowe and Kevin Arnovitz and they paired up for an episode of ‘most interesting’ NBA teams. We’ve looked at one of their conversations from 2017 that asked, ‘What if Jeff Bezos were a GM?‘ […]