Big Men in Suits Crying
For me, the most significant moment of the 2019 NBA final series, was not a great shot by Kawhi Leonard or a great 3-pointer by Steph Curry. To me, the most significant moment was off-court, during a press conference at the end of game 5 with Golden State Warriors President of Basketball Operations Bob Myers. Myers was announcing that superstar player Kevin Durant has been diagnosed with an Achilles injury (a known “career-killer” for basketball players) while struggling to hold back his tears. “If you have to blame someone, blame me,” he said with a choked voice.
It was difficult to watch. The announcement came in the heat of a thriller NBA finals series, in which Myers’ team faced the Toronto Raptors, and he was basically announcing that now, the odds were stacked heavily against his team. More importantly, the announcement meant that the future career of one of the world’s best basketball players is questionable. Why was Myers sobbing? Was this about the team? The franchise? The championship? Was this about KD, the person and possibly his friend? To me, it was about something else. To me, Myers cried as he felt the bitter loneliness of a decision-maker.
Many people were involved in that critical decision, but he was the one who had to take it. The result was bitter and he simply had no one else to share the blame with. While I was watching Myers, listening to his voice crack, I was reminded of difficult decisions I had to make as an entrepreneur, CEO and investor. In such positions, you make decisions on a daily basis.
To be completely honest, most decisions are easy. Most decisions have no meaningful impact on the business, and therefore, even if you make a wrong call, the result has a minute effect on your business. Even more meaningful decisions are typically easy to make: in most cases, it’s pretty clear what the right decision is. It’s clear what would be right and what would be wrong. It’s that rare type of decisions, those that are both meaningful and hard to call, that make you lose sleep. I have collected some examples on these types of decisions:
Staring the future in the Face
There are numerous examples of difficult decisions that have yielded extreme consequences — for better or worse. In 2006, just two years after launch, Facebook founder Mark Zuckerberg was approached with an offer from Yahoo to acquire the company for a whopping $1 billion. I’m sure Zuck lost a lot of sleep on his decision. On the one hand, here’s an offer that will make him a billionaire overnight and would probably make any early investors very happy. On the other, his faith in his own creation and the belief he can build something that is more than a unicorn.
22 at the time, Zuckerberg eventually declined. While he often seems extremely cool and calculated, Zuckerberg’s decision was based more on faith than logic. He believed that he is creating something that could grow much larger, and even though he had fierce competition from the likes of Twitter and MySpace, decided to keep his company. Today, Facebook is worth more than $500 billion and Zuckerberg’s personal fortune is estimated at nearly $70 billion.
Stars rise and fall
In 1971, George Lucas signed a contract to write and direct the first Star Wars movie. On the heels of the success of his movie American Graffiti, Lucas was offered $500,000, a huge pay-bump from the $150,000 he was paid for the previous film. However, Lucas had a different offer: He asked to receive the same amount as his last film, in exchange for merchandising rights and the rights to any future films.
It is certain that this wasn’t an easy decision for Lucas to make. On the one hand, he had an offer that will position him as a top-earner in Hollywood and that would pad his bank account with a sum that was pretty rare for directors back then. On the other, he had the potential to make millions, but only if his creation would be as successful as he believed it could. If the movie fails, not only will he lose his prestige and perhaps find it much more difficult to get work in the future, he would also have a much smaller financial cushion to sustain himself.
The studio, having little faith in the success of the movie, agreed to Lucas’ offer. In 2012, Lucas sold his rights to Disney for $4 billion, showing that the hard decision was the right one to make.
Keeping the business running
Perhaps one of the greatest business decisions ever made was a gamble Henry Ford took in 1914. Back then, the industrial revolution was just starting and employees were tasked with daunting, repetitive jobs on the assembly line. Ford realized that he had to keep the most important part of his industrial machine, the workers, happy. So he offered them $5 a day, double the salary of an average assembly line worker back then, and 8-hour shifts instead of the standard 9.
This was obviously a hard decision. While Ford’s intention was to motivate existing and new employees, if he had been wrong, the results could prove catastrophic. If the extra investment in his workforce wouldn’t lead to much better results, he would have gone out of business and the father of the modern automobile would have only been remembered for his invention, not his business prowess, and would’ve perhaps ended his career with nothing.
Eventually, would-be employees lined up for the job and existing employees gave their best efforts to keep their lucrative terms, increasing productivity and making Ford’s factory the best in the business. This philosophy is echoed to this day in the tech space, in which top companies offer incredible salaries and benefits to attract top talent, and Ford is remembered to this day as a business genius.
Making hard decisions
In retrospect, the decision to put Durant on the court had much more dramatic results than they seemed to have a few months ago. Durant decided to leave the Warriors, which probably means the end of a dynasty, impacting not just this season, but many more to come. It is easy to imagine a very different scenario for Bob Myers: If Durant hadn’t been injured, he could have led the Warriors to their 3rd consecutive NBA championship, allowing them to maintain their NBA dominance, and Myers’ would have been praised for his decision. However, the story was different this time, and the consequences dire.
As I said before, luckily for us, most decisions are not hard to make, they are obvious or carry small long term significance. So how should you handle the really big decisions? I don’t think that there’s a unified formula for making hard business decisions. The only advice I can give you is to include people you trust in the process, learn as much as possible from similar situations in the past and take the time to make the right decision. Afterwards, whatever the outcome is, biting yourself on the decision you have made is useless. You simply have to live with the results, good or bad, knowing you had done your best and understanding that with all the hard work and wisdom we apply, luck is also a significant player in our lives.
“To be completely honest, most decisions are easy…It’s that rare type of decisions, those that are both meaningful and hard to call, that make you lose sleep”