Thursday, March 31, 2016

Are the Golden State Warriors committing the "best practices" fallacy?

The New York Times Magazine has a good article on how a venture capital firm took over the Golden State Warriors and turned a $450Million investment into $2B enterprise.

While reading the article I couldn't shake the feeling that the article, and the GS organization, were falling victim to the “best practices” fallacy:  that you adopt a practice that leads to an outcome, and you mistakenly infer causality.  It could be, but I am enough of a skeptic to remain unconvinced.

5 comments:

  1. I found the story of the Golden State Warriors’ journey fascinating but my interpretation of the article was different than yours. The reason I may have had a different interpretation is due to a Harvard Business Review article I recently about read about the kinds of things that bring about organizational change. The article interested me because its title was, Culture is not the Culprit. The article focuses on several businesses that made it through a crisis by making significant changes in the business model and challenged the culture. Each of the CEO’s implemented changes in different ways. They didn’t follow a formula or “best practice” used by other companies to implement change. Each CEO reviewed what was needed for the mess the firm was dealing with and made changes based on where the organization needed to go. One of the big lesson conveyed by each story was that when changes are implemented effectively, cultural change will follow.

    The situation with the Golden State Warriors reminded me of the stories in the Harvard Business Review story. The organization was “broken” because the course it was on wasn’t working and needed to be changed. The changes were accomplished not by following a “best-practices” model that some other firm created but by seriously understanding the current situation of the firm and identifying what and how needs to be successful. It differs from the best practices fallacy because it is more about, “what are the best practices for the organization given its current situation and it goals and objectives.”

    Reference
    Lorsch, J. W. and Mctague, E. (April 2016) Culture is not the Culprit. Harvard Business Review. Pp. 97 – 105.

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  2. A fantastic article that chronicles the collision course between sports has big business. Not surprisingly, when good managerial practices are put into place at an organization, any organization, improved results are to follow. it should be no surprise then than the Golden State Warriors organization has benefited off the court from wise and sound business decisions. Of course the culture of winning is infectious, and one cannot dismiss that a sound and stable organizational structure will lead to more confident and successful personal, whether it be on a basketball team or any other company.

    Where I do agree with you is that those successes off the court cannot be directly tied to the massive success on the court. The star of the team is quickly becoming a “once-in-a-generation” type of superstar. And the tactics used by the team are clearly leading to great results, while other teams in the league learn to adjust to and adopt some of the Warriors’ tactics.

    But to draw a correlation between the management of the team and the success of the team on the court, especially this early on, is premature. While stable and effective management is a key to long term success, much as the opposite is a key in failure, the short term success the team has had has all to do with on the court performance and not boardroom tactics.

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  3. I have read this article before and some comments on the site where I originally read it labeled the owner as unlikable or overly confident. When looking when this article was written and where we are today with Golden State at least for now tying the Bulls for most wins in a season at 72, we can see that from the article, they have a system and the system is working. Sports and business are often tied together because as the article states and as it is public knowledge, the owners of a team run it as a business and want to profit and some want to profit and win. With the price of teams in all sports sky rocketing to insane values, why wouldn’t someone wealthy enough to become an owner want to feast on such a profitable opportunity? But as we know that sports have become business, running a team solely as a business will not guarantee any level of success on the field/court/ice. We see it far too often where owners are the hierarchy and they run it as they would their business, with coaches and personnel ever changing as if they were low level sales workers not meeting their quota. The article lists the Washington Redskins as an example, but there are many others like the Cleveland Browns or Philadelphia 76’ers who have seen years of losing and years of turnover.

    What I do think the article shows is that the owners of the Warriors listen and put people in place with knowledge and opinions and developed a culture of brainstorming and trust. Ego’s are not allowed to get in the way even when a view on personnel and business are strong by one but the opportunity for conversation is there, When a venture capitalist puts a company in place, they put people who will lead them to success, sports are no different. When you have faith in people you appoint, the system is allowed to flow better when you as the owner are able to put your pride aside and trust in them. As a Knicks fan, we have seen the opposite far too often with James Dolan taking charge and making “executive decisions” based off what he wants which goes against what the people appointed were planning or thinking. Now to say the Warriors way is the best practice, is misleading. They have had success over the last few years and it has worked for them, but that does not mean this is the only way for a sports franchise to be successful.

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  4. The Schoenfeld article is interesting. The Warriors certainly had amazing regular season and the “best practices” employed by that franchise has seemed to serve it well. There’s not much that is more impressive than a shiny, new car – except maybe the next model year’s version.

    Many given management styles - front office or on-court – can succeed if executed well based on specific variables. We shouldn’t confuse the Golden State Warriors with being an all-time “control group” from which to judge all others.

    The world of sports is a fantastic place to see how best practices (or innovative philosophies) become dominant, and then succumb to the next version of dominance. Just look at how many NFL teams still rely on the West Coast Offense or how many NBA teams still use the Triangle Offense.

    Innovation is just another unforeseen contingency. Like the rest of the world, sports is always in motion.

    Reference:
    http://www.nytimes.com/2016/04/03/magazine/what-happened-when-venture-capitalists-took-over-the-golden-state-warriors.html?_r=0

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  5. The new Warriors ownership found themselves on the brink of greatness in 2010. As a sports fan of many fledgling teams, I’ve witnessed greatness and many, many years of disappointment—AKA “rebuilding” years. This what Golden State went through. I don’t have exact figures, but many NBA teams are owned by private equity firms and have not experienced the same success as Golden State has.

    While I believe that ownership and the administration does play a part in a teams overall success, the majority is due to coaching and competitive ability. Stephen Curry was in his early years as a pro when the venture capitalists took over, and only got better as the years progressed. He makes the players around him better, especially due to his playmaking abilities to shoot or pass the ball. I do believe that ownership is commiting the best practices fallacy because they are responsible for very little of the team’s success. I do credit them with seeing a major opportunity to purchase a bad team about to make a major turnaround.

    Schoenfeld, B. (2016, March 30). What Happened When Venture Capitalists Took Over the Golden State Warriors. The New York Times Magazine.

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