Yunfan Zhu Blog 6: Creating a Business System and Organization That Delivers

In the article “Organizational Blueprints for Success in High-Tech Start-Ups” the author listed five different business models. The star system which only recruit the top talent. The commitment system which is consistent. The Bureaucracy system is all about detailed descriptions with a “the ends justifies the means” kind of mentality. The Engineering system which has a skunk-works mentality, they innovate and that’s their advantage. And the Autocracy system which doesn’t leave too much freedom to the team, there isn’t much moral beyond the professional environment.

I find this article to be very interesting because I just couldn’t help to relate this article with professional sports teams and I want to discuss the results of the star system and the commitment system using professional basketball teams. I picked these two systems because they have a clear upper hand when compared to other three systems and they are very hard to manage.

Professional sports teams in a way are just like business ventures, only they do it in a more obvious and entertaining approach – by physical contact and TV broadcasting. 

To use the National Basketball Association as example, the 2010-2014 Miami Heat team which had LeBron James, Dwyane Wade and Chris Bosh, three of the major franchise players arguably the best players in the league at the time. The Heat also recruited some league veterans to assist the “Big Three”. The result? The Heat became one of the most formidable team in the league and won back to back championship seasons in 2012 and 13. However, after losing to the San Antonio Spurs in 2014 NBA playoff final LeBrone James left the team and went back to Cleveland Cavaliers, a younger team with better talent than the Heat. The Heat did not make the playoffs in 2015 they were ranked 9^th in their conference. This would be the major issue with the star system, it relies too much on individual abilities and has no value to the stars once there’s a better offer from a more promising firm. That being said, it still produced two championships which is enough for the investment. 

Contrary to the Heat, San Antonio Spurs would be the perfect example of the commitment system. Assumed head coach position in 1996, Gregg Popovich is the longest tenured active coach in both the NBA and all US major sports leagues. During his tenure, he lead the spurs to five NBA championships, an accomplishment only achieved by four other coaches. He used the team No.1 draft on Tim Duncan in 1998 and later drafted Manu Ginóbili in second round draft in 1999 and Tony Parker, a lower first round draft in 2001. Popovich designed his team around these three players and they are still playing and winning after almost 15 years which is almost unheard of in the professional sports world. The Spurs played the Heat in both 2013 and 2014 playoff finals. The Spurs lost the 2013 title with a devastating 3-4 loss, LeBron Jame’s key plays in game 6 was quintessential. Nevertheless, the Spurs played the Heat again in 2014 and dominated the Heat with a result of 4-1.

It is obvious that commitment organizations may not be the best when it comes to hitting homeruns of scoring in crucial seconds, but they are likely to be very consistent. Maybe they can’t hit home runs but they’ll get on base and help the team score runs. Nevertheless, there is only one Spurs in the NBA which indicates that the commitment system is somewhat unstable and harder to manage. It’s very hard for a commitment firm to stay diverse with the same workforce. Especially when diversity has become more and more important in today’s business world. Moreover, with the high turn-over rate of startup firms it is also very difficult to retain the same workforce. The Spurs are successful because of Gregg Popovich, a leader who has the ability to operate the commitment system. In other words, the commitment system will only work with a great CEO who believes what he or she is doing. Do you agree with my analogies and what approaches would you take to make the commitment system more stable for startup ventures?