6 Entrepreneurial Lessons from Phil Jackson

Sports offer many useful analogies for entrepreneurship. We talk about “moving the ball down the field” to visualize how entrepreneurs try to maintain forward progress even when the going gets difficult for their startups. Investments are often classified as a single, double, or home run when referencing a venture capitalist’s investment model. Since starting this blog last year, I’ve used sports as themes for a couple of posts, including Michael Jordan’s disturbing motivation and what Tiger Woods’ meltdown teaches about handling a crisis.

With the Los Angeles Lakers squaring off against the Boston Celtics in the NBA Finals tonight, I feel it’s an appropriate time to explore a topic that’s been on my mind for a while: what entrepreneurs can learn from Lakers’ head coach Phil Jackson.

A member of the Basketball Hall of Fame, Phil Jackson coached the Chicago Bulls from 1989-1998 and the Lakers since 1999. Jackson led his teams to a record 10 championships—the most ever for a head coach in any professional sport—and owns the mark for the most playoff game victories in NBA history.  Along the way, Jackson has coached some of the most talented (Jordan, Kobe Bryant, Shaquille O’Neal, Scottie Pippen) and mercurial (Dennis Rodman, Ron Artest) players in league history.

Jackson is a colorful and often controversial figure. He uses the media to pick fights with opposing players and sometimes even to chastise his own personnel. He’s nicknamed the “Zen master” for his holistic and spiritual approach to coaching. At the start of each season, he personally selects a book for each player on the team and hands out to him at the start of training camp. He has admitted to using experimental drugs in his youthful counterculture days. And recently he came under fire for refusing to criticize Arizona’s tough new illegal immigration law.

Whatever his quirks, Jackson knows how to win and get the most out of his team. As I’ve watched him coach the Lakers over the past decade, I’ve grown to appreciate many of his coaching tactics and even incorporate some of them into my own management style.

Here are a few of Jackson’s traits that entrepreneurs would do well to emulate:

1) Let Your Superstars Shine

Recruiting “Grade A” talent to your startup is critical. But talent alone is not enough; Jackson adroitly finds a way to wring maximum productivity out of his stars while implementing a system that allows all of his players to contribute. Before Jackson turned around a Lakers team that struggled in 2005-2007 and rebuilt them into a champion in 2009, critics charged that anyone could have won multiple titles with the players he’s coached. Jackson has coached some amazing players, especially Jordan and Bryant, who are among the best ever to play the game. But having superstar players on the roster isn’t enough to guarantee excellence. Consider how LeBron James, who along with 3 former All-Star teammates (Mo Williams, Antawn Jamison, and Shaq), went down to defeat early in this year’s playoffs.*

Talent isn’t enough. No enterprise can get far without fully leveraging the skills of its personnel, and this doesn’t happen by chance. It happens when an organization’s leaders value excellence and give exceptional people a chance to shine.  As I detailed in The PayPal Wars, PayPal’s COO David Sacks gave his producers (i.e. product managers) a lot of autonomy and responsibility. As the name implied, producers were expected to produce results, and Sacks also made sure they got credit for their successes. High achievers were welcome throughout the company, a fact proven by the achievements of the so-called PayPal Mafia, and the company weathered incredible challenges as a result.

2) Implement a Flexible System

While still an assistant coach, Jackson met Tex Winter, the brains behind an offensive system called the triangle offense. Winter developed an offensive scheme that relies on spacing, where three players position themselves in a triangle formation with the ball, opening up the two players on the opposite side and creating passing angles no matter how the defense reacts. If it sounds complicated, it is. (Check out this illustrated example.) But it allows a team the opportunity to be creative and it ensures that a superstar doesn’t need to shoulder the entire burden of running the offense.

Just as Kobe Bryant isn’t expected to devise a new offensive system from scratch on every possession, companies need a process for bringing products to market that their employees can operate within. If your startup is software as a service (SaaS), consider the Lean Startup methodology articulated by Eric Ries. If your company is in enterprise software, biotech, or some other field, research the latest methods that innovators are implementing and emulate them. Find your own Tex Winter. No organization can scale without a framework for utilizing your team and bringing a product to market, and don’t try to invent this framework from scratch. Instead, leverage the experience and knowledge of others, and modify your system as your company and experience grow.

3) Trust Your Employees

Watching Jackson on the sidelines of Staples Center, you might get the impression that he’s lackadaisical or even detached. During timeouts he leaves his players alone on the bench to talk among themselves, waiting until the last few seconds to huddle up and diagram a play. Of course, that’s when Jackson bothers to call a timeout, which he is often slow to do, even when his team starts to struggle. As basketball commentator Dr. Jack Ramsay once told USA Today: “There he sits, legs crossed (and arms folded). Anybody else…would jump up and say, ‘Timeout! Timeout!’He wants them [the players] to figure it out. I don’t know any other coach ever who has used that technique.”

With good personnel operating within a flexible system, Jackson trusts his team to get a feel for the game’s rhythm and make the modifications necessary to compete. This is similar to the approach we had at PayPal, where employees were encouraged to speak up and propose big ideas. As Jeremy Stoppelman, now the CEO of Yelp, once told Forbes: “I was a 22-year-old whippersnapper, and I remember firing off this e-mail that disagreed with the entire executive staff. I didn’t get fired—I got a pat on the back.”

4) …But Know When to Shorten the Leash

While Jackson doesn’t micromanage, he knows when to step in and intervene for the good of the team. In game 7 of the Western Conference Finals against the Portland Trailblazers in 2000, the Lakers fell behind by 15 points early in the fourth quarter at home. Jackson, who had been up pacing, called timeout and screamed at his players as they approached the sidelines. IMHO, the shock of the coach’s rebuke and the resulting infusion of energy this brought to the players worked, causing Kobe, Shaq, and the rest of the team to rally, win the game, and take the series.

Sensing a team’s energy and cohesion is an important part of leadership, and knowing when to step in and be more hands-on is important. It’s often hard for newly minted entrepreneurs to know when to do this, and I don’t think there’s a hard-and-fast rule as to when this is appropriate. It requires knowledge of your team and the circumstances.  And sometimes it can mean making difficult choices, especially if a change in personnel is required. But being an entrepreneurial Zen master doesn’t mean you never raise your voice.

5) Adapt Your Strategy to Data

Phil Jackson has a reputation for making adjustments when they matter most. In the first round of the playoffs this year, Oklahoma City Thunder point guard Russell Westbrook was killing the Lakers. Taking advantage of his speed against L.A. guard Derek Fisher, Westbrook averaged 22 points over the first 4 games as the upstart Thunder pushed the Lakers to a 2-2 tie. In game 5, Jackson surprised the Thunder by switching Kobe Bryant to defend the young player. Against the faster, longer Bryant, Westbrook’s scoring average over the next 2 games fell to 18 points and the Lakers closed out the series in game 6.

Putting Bryant on Westbrook was hardly rocket science, but Jackson made the adjustment based on data, and in doing so exhibited a willingness to abandon a matchup he had drawn up before the series started. Likewise, entrepreneurs need to make adjustments on what they see and measure. Strategies that make sense pre-launch need to be tested against the reality of quantifiable data, and, when the circumstances warrant, the startup needs to be able to pivot. (For a description of what it means to pivot, read this post by Mark Suster.) Don’t fall in love with your own ideas.

6) Give Your Team a Psychological Edge

On Monday, Jackson fired a verbal salvo at Celtics forward Kevin Garnett, saying Garnett was “smacking” people around and that wasn’t his team’s style. Garnett laughed it off, saying, “It’s just Phil playing mind games.” But Jackson had done his part to ensure that a news cycle revolved around his comments, and also tacitly instructed the Lakers home crowd to react to the Celtics’ physical defense in a way that will likely sway a few calls by the referees. Early this postseason, Jackson said that Kevin Durant of the Thunder gets too many foul calls from officials. Durant reacted with surprise, saying he was unsure why Jackson “disrespected” him, and the league fined Jackson $35,000 for his remarks questioning the competency of their refs.  But the journey inside Durant’s head was probably worth $35K to the coach, since the league’s leading scorer was held several points below his season average during the Lakers series victory.

Jackson intends for his comments to get inside his opponents’ head, and to sway the officiating in a way that benefits his team. In short, he sticks his neck out in public to influence the officiating, psyche out his team’s opponent, and give his squad some sort of psychological edge. Entrepreneurs generally aren’t in a position to bad-mouth their competitors to the news media (and even if you are, I’d suggest you think twice before doing so). But entrepreneurs need to do whatever the can to instill confidence in their team and give their personnel an edge in the marketplace. Would you be willing to take a $35,000 fine for your team? You would if you’re the Zen master.

* LeBron is an easy target, but many of the NBA’s best players from the past 20 years never won a title, including Carmelo Anthony, Dwight Howard, Dirk Nowitzki, Jason Kidd, Tracy McGrady, Steve Nash, Allen Iverson, Karl Malone, John Stockton, Patrick Ewing, and Charles Barkley.

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