What Donald Sterling's NBA Blowup Teaches Entrepreneurs
The Los Angeles Clippers owner was banned for life from the organization after recorded racist remarks surfaced.
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The NBA recently banned Los Angeles Clippers owner Donald Sterling for life due to racist remarks made during secretly-taped phone conversations with his girlfriend. There are four important lessons in his downfall for entrepreneurs:
1. You are what your track record says you are. This is not the first blip on the racism-radar screen for Sterling, only the most recent. He has a history of discrimination lawsuits. If a potential sponsor or client did their due diligence on you, what would a simple search unearth about your character, integrity and track record? Sterling is case in point that we should never confuse wealth and philanthropy with character.
2. Success leaves clues. In the case of Sterling's Clippers, so does failure. Your organization is only as good as the chief executive's leadership. In 2009, Sports Illustrated name Sterling the worst owner in the NBA. Not so coincidentally, of the four major professional sports leagues in the U.S., the Clippers have the worst all-time winning percentage (not including expansion teams in the last 14 years).
Under his leadership for the last 33 years, the Clippers have made the playoffs just seven times, and four of the seven have resulted in first-round losses. How you do anything is how you do everything and if your company isn't as successful as you'd like it to be, look in the mirror and ask yourself two questions:
- Am I personally doing everything possible to succeed with integrity? Your team is a reflection of you the leader. Understand that you lead by example and reap what you sow.
- Have I been a good steward of customers' and sponsors' investment? Clearly, Sterling has not. KIA, State Farm and CarMax immediately withdrew their sponsorship of the team. Fans' voicing their disgust has been trending on social media nonstop. It can happen that fast to any leader of any business. Trust is the hardest thing to earn and the easiest thing to lose. Once it's gone, the damage is often irreparable.
3. Culture is everything. If you can't get the culture right, you won't get anything else right subsequently. You can't be customer-centered without first being employee-centered. After the recording was made public, as a sign of protest, the Clippers players wore their warm-ups inside out to hide the Clipper logo for game four of their playoff series versus the Golden State Warriors. Both Golden State and the Clippers players almost completely boycotted the game. The only thing that kept the Clippers players from staging a walkout was the respect they had for their coach and real leader, Doc Rivers.
If you don't make respect, diversity and inclusion core values, then your people will either collectively walk out or stay on the job in body but not in spirit and will sabotage the operation in silent protest.
An employee-centric culture enables you to attract and retain high-caliber talent. Had Sterling not been banned for life, moving forward the Clippers would never be able to attract talent and certainly wouldn't retain any of the personnel currently on their roster.
4. Your mic is always on. Leaders simply can't assume that private conversations will remain private. The Sterling incident isn't even exhibit A of this in the NBA. Two weeks prior, the Golden State Warriors fired assistant coach Darren Erman for secretly recording conversations between the team's coaches and players.
"Act like your mic is always on" is sage advice I received when I first got into broadcasting. It's an old industry saying that is used to teach talk-show hosts, disc jockeys and guests how to behave in studio. It's more than that though -- it's actually advice for successful living.
While it's not realistic to keep your thoughts to yourself in every situation (like at home with your spouse), you do need a very strong filter. How often do we see politicians, celebrities and athletes forget that they are public figures and either say or post something on social media that is stupid, insensitive or politically incorrect?
As a business leader you're every bit as much a public figure as a superstar athlete or team owner. As Shakespeare said, "all the world is a stage." As the name and the face of your brand, entrepreneurs are always on stage, in word and deed.