Indifference Equals Loss
- Sep 5, 2019 7:32 pm GMT
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Indifference Equals Loss
Sometimes you don’t know what you have until you don’t have it anymore.
Stephen Curry began his NBA career in 2009 with the Golden State Warriors. Like nearly every other player in the NBA, he signed a shoe contract with Nike. According to Forbes, Nike owned 95.5% of the highly lucrative basketball shoe market in 2014. Since the end of the Michael Jordan era, no true rival existed.
Until the day that Nike allowed some hubris and carelessness to open the door for little known Under Armor to enter their market.
According to an outstanding article by Ethan Sherwood Strauss for ESPN, here's what happened when Nike tried to convince Curry to re-up in August 2013:
"The pitch meeting, according to Steph's father, Dell, who was present, kicked off with one Nike official accidentally addressing Stephen as 'Steph-on,' the moniker, of course, of Steve Urkel's alter ego in (the TV show) Family Matters. 'I heard some people pronounce his name wrong before,' says Dell Curry. 'I wasn't surprised. I was surprised that I didn't get a correction.'
It got worse from there. A PowerPoint slide featured Kevin Durant's name, presumably left on by accident, presumably residue from repurposed materials. 'I stopped paying attention after that,' Dell says. Though Dell resolved to 'keep a poker face, throughout the entirety of the pitch, the decision to leave Nike was in the works.'"
Despite the colossal mistakes made in the sales pitch, Nike still owned the rights to match a competing offer. When they refused to match Under Armor’s $4,000,000 contract offer, Stephen Curry left Nike. He later earned two NBA MVP awards and the Warriors captured three titles.
He also added about 15 billion dollars in market value to Under Armor.
How David slung a stone at Goliath in this story should teach us three important lessons.
Assume Nothing Regarding A Client
Being top dog in any market brings blessings and curses. The blessings are often high profits and strong equity valuations. The curses often manifest in complacency, arrogance, and losing sight of the shifting winds.
Nike assumed the contract re-up was a given. They prepared poorly for the sales pitch and they let him walk away for almost nothing.
As importantly, they lost sight of the shifting winds of the NBA. As more teams relied upon analytics for strategy, they didn’t see the growing importance of superior three-point shooters like Curry. Professional basketball experts refer to Curry as “The Michael Jordan of the three-point era”. He revolutionized the game from long distance in the same manner that Air Jordan accomplished with the dunk.
Nike executives assumed Curry would remain in the fold like everybody else. Michael Jordan earns approximately $100,000,000 annually from Nike. Superstar relationships often continue long past the playing career. Who would be crazy enough to leave?
Perhaps somebody who felt slighted and unappreciated?
I believe the number one requirement for an effective leader is to be able to authentically listen. Whether it be with a client or a teammate, you need to seek to understand first.
One tangible benefit to listening closely is that you will often learn something valuable. Critical thinking skills center on your ability to understand a different perspective.
“Working Managers” often fail because executives often underestimate the amount of time that a manager needs to devote to listening. Meaningful dialogue should be something more than an annual review or goal setting discussion.
They also fail because executives often undervalue the importance of dialogue between a manager and a team member. They undervalue the concept of listening by appointing high performers in leadership roles. High performers generally do not own the time or the inclination to spend hours each week listening to somebody else. Equating high performance with leadership ability can be a recipe for disaster.
The halo effect often results in placing the wrong person in a leadership role.
Indifference Equals Loss
Have you ever been involved in an important conversation, and the person across from you glances at his or her watch periodically? When it happens at the wrong moment, the impact can be devastating and permanent. Though somebody may not have meant it, the translation is something like” I am too busy to concentrate fully. I am not completely listening to you. How long until my next more important appointment?”
As a manager, it can be extremely difficult to understand the difference between a rant or something real. Based on my experience, I discovered that rants usually happened on Friday afternoons. Something real usually happened on a Monday morning when the resignation letter lands on your desk.
“What did I miss?” “How could I not see this coming?” “Did I listen closely enough?”
Nike failed to completely understand that giving back to the community was extremely important to Stephen Curry. He badly wanted a summer camp to work with promising young players. While Nike offered a camp to their star athletes, Curry was not one of them.
Curry’s purpose, motivation and integrity was exemplified again last week when he announced that he was donating seven figures to help Howard University start a golf team. Had somebody from Nike taken the time to better understand the “why” of Stephen Curry, they probably could have discovered that he was possibly the very best spokesperson for their product.
We live in a society where we expect and demand instant gratification. If we do not like something, we can delete it with a click of the mouse. Huge amounts of data come to our desktops in seconds. We make tens of snap decisions daily.
Amid working at warp speed, we devalue the hours when we spend time listening. We often devalue the importance of preparing for client or team member discussions. We lose sight of the important stuff.
The financial cost of losing a valued client or employee can be staggering. The hits to company morale also represent hidden costs.
Taking the time to authentically listen to somebody is the best way to ensure client retention and not allowing valuable employees to walk away.
The funny thing is that it doesn’t cost you a dime to do so.