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The Need for Innovation in Business and the NBA

Last Thursday night marked the end of a 100+ game NBA season for the Miami Heat and San Antonio Spurs, the third straight such season for the Heat. The series was one of only eight Finals series in the last 64 years to stretch the full seven games. Vanquished Spurs head coach Gregg Popovich looked downright giddy to have it all done (a rare state of being for the usually terse curmudgeon). Before the game he said the best part of the pre-game shoot-around was that it was the last one of the season.

It was a series that had the feel of an old-school boxing brawl. No team had won two consecutive games going into Game 7, and Game 6 had ended less than 48 hours before in a long overtime battle.  The Spurs were just seconds from clinching the title in Game 6, but instead woke up Friday morning after Game 7 as the runners-up for the 2012-2013 NBA title. So how does a franchise so solid for so many years like the San Antonio Spurs come back from such disappointment? And how does the Heat keep up their perennial Finals appearances?

Maybe they can learn from businesses that have dealt with a changing business landscape, successfully adapting for the future. When faced with challenges, companies like Apple and Starbucks succeeded by embracing innovation, the tendency to zig when others are expecting a zag.

Starbucks innovated when they decided that their core product was coffee and made a conscious effort to brew it the best they possibly could, making them a great analog to the Heat franchise. The Heat made a decision a few season ago to play a different brand of basketball, forming a game plan around their once-in-a-generation players LeBron James and Dwyane Wade. They even eliminated one of the games traditional positions, center. Like Starbucks, the Heat played small and focused on their strongest attributes.

After picking up more strong players like Ray Allen and Chris Anderson last offseason, more recently the Heat has built its team through free agency, a strategy which is likely to continue this offseason, since they have no draft picks with which to select a college or international player. Maybe look for the Heat to acquire a big man and switch things up even more.

The Spurs franchise, on the other hand, has followed the strategy of Apple, building a team from scratch and slowly adding valuable pieces to its product line behind legendary leadership. Apple appointed once-fired Steve Jobs as CEO of the company in 1997, roughly the same time Gregg Popovich took over the Spurs.

In the following years Jobs released iconic and innovative new products like the iPod, iPhone, and iPad, making Apple one of the most profitable companies in the world. Similarly, Popovich and the Spurs targeted and developed undervalued international players like Tony Parker, Manu Ginobili, and Tiago Splitter. The roster from this past season featured the most foreign-born players in the history of the league. Tony Parker wasn’t chosen until the 28th pick in the 2001 NBA Draft, and Manu Ginobili wasn’t taken until the 28th pick of the second round.

With their first pick in the draft not coming until late in the first round, the Spurs might be able to poach another overlooked international player to add to Gregg Popovich’s chess board, or they might look for players from overlooked college programs, like 22-year-old Kawhi Leonard from San Diego State, who the Spurs traded for last season following the draft. The Spurs in any case need to find replacements for aging stars, and they need to do it quickly, or like so many companies fade into obscurity.

Over the long term, companies like Apple and Starbucks soared up the Fortune 500 because of their ability to innovate, adapt and prepare. Over the next few months we will see if the Heat and Spurs decide to employ a similar strategy to reach the Finals next season.

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