The Philadelphia 76’ers have gained significant National and International notoriety over the last 5 years for what has become known as ‘the process”. The “process” is associated with the way in which their former President of Basketball Operations and General Manager – “Sam Hinkie”, had gone about rebuilding this NBA franchise. One that had won only 56 out of a total of 246 games over the past 3 seasons (prior to this one).
Hinkie stewarded the team towards a level of planned futility never previously seen in the history of the NBA and this eventually gave rise to the team’s owners replacing Hinkie with Bryan Colangelo as the Sixers GM.
Despite Hinkie’s firing, the world is now seeing the fruits of his labor in the form of a rejuvenized and exciting young 76’ers squad that has been acclaimed by many commentators as not only one of the most exciting and watchable teams, but a team of the future in terms of championship contention.
Although initially demonized by many for his strategy of intentionally building a team to lose more basketball games than they won, he is now lauded for his vision and been given the majority of the credit for the enviable position the Sixers now find themselves, in their quest for an NBA championship in the coming decade.
One of the principles of ”the process” Hinkie often spoke about was his absolute belief in ‘Optionality”. “Optionality” is defined as the ability to acquire assets that have low risk, but high upside. The view is that not all of the assets will convert, but that over the long term, the chances of finding a winner increases significantly. Simply because you have acquired multiple high potential assets, for minimal outlay.
This describes the basis of Hinkie’s plan of building a formidable team by “finding” and converting on his treasure trove of assets. These assets include high draft picks, multiple draft picks and young undrafted players who are considered to be “diamonds in the rough”. This provided Hinkie with multiple “options with which he hoped to strike gold. Either via the draft or through wheeling and dealing with other teams and then trading his assets for theirs. All in the hope that he will succeed in negotiating a one sided deal, delivering high potential for low risk. The alternative, in Hinkie’s mind, was forever floundering in mediocrity by assembling a team of good, but not great basketball players.
So what does all of this have to do with choosing office space?
There is a well-known quote from Henry Ford (though often attributed to Einstein) that I think applies well to what Hinkie was trying to do with “Optionality” and the rebuilding of the 76’ers; and that is - “If you always do what you’ve always done, you’ll always get what you’ve always got.”
To go against the grain and take an alternate path, requires a unique combination of courage and strong leadership. In the case of the 76’ers that process has only just begun to show the fruits of Hinkie’s vision, but as an example of a typical decision making process that might normally be contemplated by business, let’s examine a representative “same as we always do” philosophy that could deliver less than optimal “get what you always got” outcomes. In this case let’s use the example of a company searching for new office space and the assistance that can be given to them from their tenant rep broker.
Most business managers do not know how to choose office space that positively influences their business and this is in some ways similar to the lack of certainty that exists when assembling an NBA championship winning basketball team. Instead they would be relying on the expertise of their tenant rep broker and their processes would be controlled by the questions asked of them. Those questions are often;
What size of office do you want?
Where would you like to be located?
How much is your budget?
However, if one was to take an approach that resembles that of Hinkie’s “Optionality” plan, the outcome wouldn’t just be any office that fits the criteria of size, price and location or for our NBA analogy, a basketball team that wins 50% of their games. Instead we would be seeking a championship caliber office that would lead to improved business outcomes in terms of increases to topline revenue and bottom-line profitability.
Therefore, our questions, as tenant rep brokers that are truly committed to the business success of our clients, would need to be reframed around areas of opportunity that would lead to high reward outcomes, such as; -
- How can you choose an office that best suits your business?
- How can your choice of office attract the best and brightest staff to your business and keep them happy and healthy?
- How can your choice of office increase operational efficiency and workplace productivity?
- How can your choice of office enhance your brand and positively affect your clients?
By doing so we would ensure that the choice of office for our clients will have assets to the business in terms of “Operational Efficiency and Workplace Productivity”, “Brand and Reputation”, “Staff Attraction and Retention” and “Geographical Leverage”. If we get these choices right, the ceiling for this reward could be very high and significant business benefits would begin to accumulate. For example, by just getting the workplace productivity piece of the puzzle right, it is possible to completely offset the cost of office rental for most businesses, as this will occur when a productivity improvement of only 6-10% is achieved (reference "Don't Worry about the Rent: Choosing new office space to boost business performance", Sep 2015).
In this example, the outlay for this exercise is the thought and commitment required to think and act strategically with respect to investigating office choice options. But the same could be said of any business decision making process that focusses on accumulating assets that can deliver low risk, high reward outcomes.
Time will tell whether Hinkie’s plan will deliver the players necessary to transform the Sixers back into a championship caliber NBA team. But by following the process of optionality, it should be possible for tenant reps to not “do what they have always done” and instead do something that will likely put their client’s organizations in the best possible position to succeed. For them “the process” is not for the purpose of building a successful basketball team, but rather for accumulating assets with which to leverage their own rewards, wins and benefits for their businesses over the long term.
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