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Quality leadership is essential to business and sport

In the history of the NBA, five coaches have won more than half of the 63 championship titles. In fact only 28 coaches have won an NBA championship, forming an elite club whose members include both head coaches of this year’s Finals, Erik Spoelstra of the Miami Heat and Gregg Popovich of the San Antonio Spurs. These numbers illustrate the immense importance of quality leadership for any organization that is competing at the highest level, businesses and sports teams alike.

The best businesses emphasize management as well. In the 1950s GE decided it was important to attract quality leaders, so they set up an institute in Crotonville, N.Y. to develop potential future executives. GE routinely spends more than a billion dollars on corporate training every year. The move has paid off in very real ways. GE is a Fortune 10 company and there are more than 25 ex-GE executives who are currently CEOs of other major corporations.

The NBA’s Los Angeles Lakers acted similarly when they signed Magic Johnson to a 25-year, $25-million dollar contract in 1981, which was unprecedented at the time. The team recognized the potential for Johnson to be an executive one day. They knew that no one had played in the NBA for 25 years, and only a handful had even played more than 20. Still, they wanted Johnson for the long haul.

This was something Bill McDermott touched upon during his Corner Office interview with Adam Bryant. “People will make bold bets on people who have an unwavering passion to succeed or a passion to do something,” McDermott said.

Another Lakers executive legend is Jerry West, one of the top basketball players in the league in the 1960s and early 70s. His silhouette is the current NBA logo. Upon his retirement West stayed with the Lakers, initially as coach, and then as a scout and general manager.

West made shrewd moves throughout his tenure, helping mold five championship teams in the 1980s. He was responsible for constructing one of the best basketball teams in league history when in 1996 he traded with the Charlotte Hornets for Kobe Bryant and signed Shaquille O’Neal from the Orlando Magic, resulting in three more championship wins in the late 90s and early 2000s.

Weakness and a short-term view from the front office can topple once-great organizations. Strong earnings and a culture of success can take decades to mold, while financial ruin can happen instantaneously if management isn’t up to snuff. There are horror stories of companies that fell hard and fast, usually because the management failed to adapt or take responsibility for poor decisions.

Kodak, for instance, developed the first digital camera in the 70s and refused to sell it because of a fear it would hurt film sales. Schlitz Beer sold its infamous ‘snot beer’ for months as a result of cutting corners in the brewing process. For months they did nothing as the public stopped buying the hazy and thick beer.

The easiest way to avoid this trap is to shake up the status quo. The best coaches and leaders are adaptive, finding new and innovative ways to use their team’s talents.

Coach Pat Riley adapted from the flash and up-tempo style of the 1980s “Showtime” Lakers to the grit-and-grind New York Knicks of the mid-90s. With the Lakers he won three championships. A few years later, he led the Knicks to their best record in franchise history and the NBA Finals (which they lost in seven games). These teams required two completely different coaching styles, but Riley’s led both to winning seasons.

Similarly, when Steve Jobs returned to Apple after a decade leave, he helped the company innovate its way to a business valuation that was, until recently, highest in the world.

Strong executive leadership, as we have seen from luminary CEOs and championship coaches, is a crucial part of a winning strategy. Because both of the teams in this year’s NBA Finals have great front offices, it might end up being a series of final adjustments to decide who will ultimately win. As we near the end of the series and a potential Miami Heat elimination on Tuesday night, which leader will ultimately make the best adjustments?

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