Today, 60 people will get hired into a multi-billion dollar organization. This isn’t just any organization though, this is the NBA — the National Basketball Association.
Now before you click away, I know that sports analogies are overdone and often a stretch. Yes, there are certainly leadership and teamwork lessons to be learned but this is less of a reach.
In the world of talent selection, no process is more transparent than the draft. Every person drafted knows where they stand relative to other players, we see how hiring managers think about organizational needs, and we get to observe the results of those hiring decisions play out on the public stage.
There is good and bad news about those lessons — but that bad news is a lot tougher to swallow.
Lesson 1: Talent selection is always imperfect
NBA teams have millions of dollars tied up in their recruiting and selection budgets, yet most teams end up hiring somewhere between one and five players a year. Not too many other organizations have that much budget tied up for that few recruits. With the right owner, this budget could be potentially limitless if you could prove that more money spent in the selection process yielded better results.
And why wouldn’t it be virtually limitless? A No. 1 draft pick can cost a team between $20-25 million dollars for their first contract. A free agent can push that up to $100 million dollars. And making the right decision not only means that their salary was well worth the cost, but that millions more are available. Make the wrong decision and the numbers go the other way.
So why do people who have thousands of pages of data and decades of experience end up picking guys like Kwame Brown, Darko Milichic and (as much as it pains for me to say) Greg Oden with the first overall pick? And with the possible exception of Milichic, even other team’s general managers would have to admit that these players would have fetched very early draft picks if they weren’t selected first.
Very simply, even the best talent selection process money can buy doesn’t give perfect results. And while that may be discouraging, there are some hopeful lessons.
Lesson 2: Young talent is critical if you can’t attract stars
When you’re a city like Portland or San Antonio, it is unlikely that a top free agent is going to come your way. Most of them tend to go to larger markets like Los Angeles or New York or Miami. That’s why a draft is so important to smaller market teams that struggle to attract stars in the free agent market.
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So, if you are a top destination in the industry, your money can be better spent on attracting senior leaders with proven track records rather than trying the guessing game of bringing someone up through the ranks. For everyone else, you’ve got to roll the dice on some risks or spend time and energy on development. That’s the cold hard truth.
Lesson 3: Hire slow, fire fast in real time
Even though the process of the NBA draft seems to go very quickly, the process of evaluating talent is years in the making leading up to that draft day decision point. And even after the draft selection has been made, the evaluation process continues with the young player through the first several years.
Witnessing that dynamic at summer league games, open scrimmages, pre-season and regular season games is a treat. You’ll see a serious error by a new player and you’ll see how the coach reacts to that error. Some let them play through it while others decide to pull them from the game. Others encourage, while some get red in the face.
What is the same though is as soon as someone who can help the team get better more quickly comes along, you’ll be gone. It’s the ultimate test of the hire slow (years of prep work and months of onboarding) and fire fast (gone as soon as a trade or free agent comes along to take his place).
Lesson 4: Being right most of the time is still the goal
Still, like most hiring managers, NBA general managers are not judged for one or two bad decisions. But being right most of the time is still the goal and NBA teams generally figure that out most years. Sure, there may be a player or two that fall well below where they should have been rated, and a few that are overrated, but the severity isn’t outrageous.
It should be a good indicator that recruiting and selection is still an ever-varying combination of art and science. No matter how much someone knows about it, nobody is going to get every hire right.