As the media sort out the winners and losers of the NBA lockout, Charlotte Bobcats owner Michael Jordan (yes, the Michael Jordan) has drawn some criticism. In the back office, it's true that Jordan has underperformed at times. On the court, however, Jordan's career with the Chicago Bulls provides invaluable leadership insight for investors and managers alike.
Here are three leadership traits every CEO should emulate, revealed through the lens of an NBA legend.
1. Leaders should have a clear view of where their team is headed.
A former teammate, BJ Armstrong, once said Jordan could feel a game's momentum shift before anyone else on the court. Jordan knew precisely when the opposition was most vulnerable.
Jordan was a unique visionary in this regard. On a different scale, a great CEO should be a visionary in an industry. Amazon.com's
Amazon's highly successful Prime service even caught the eye of Google
2. Leaders should focus on their strengths and adapt to gain an edge on the competition.
When he returned to the game in 1995, Jordan could no longer dominate with sheer athleticism. Naturally, he developed a new weapon: a virtually unstoppable fade-away jumper. Defenders would overcompensate on a fake to the basket and leave the jump shot wide open. It was the evolution of a champion.
How can investors learn from Jordan's ability to evolve? Take a look at how certain companies have evolved because of savvy management. General Electric
IBM has done the same under Sam Palmisano. Recently, Warren Buffett noted that Palmisano has "delivered big-time" through a well-defined company road map. Buffett announced that Berkshire Hathaway
3. Leaders should take risks and readily admit to their mistakes.
Most sports fans have heard the classic motivational story about Jordan being cut from his high school squad. It's ironic now, but Jordan would fail again and again in his career. Yet, he was never deterred. He once stated, "I can accept failure, everyone fails at something. But I can't accept not trying."
During his career, Jordan missed more than 12,000 shots. Great CEOs will miss their target as well. Netflix
Hastings can take comfort in poor decisions by other great executives. Steve Jobs introduced several mediocre products as Apple's
Investors should seek out CEOs who take risks but also address their missteps. When possible, listen to earnings conference calls and read management's letter to shareholders in the annual filings. In this context, does management admit their mistakes candidly, ignore them, or try to cover them up entirely? Warren Buffett is a strong believer in full disclosure and avidly reads through annual reports to provide insight on management's character.
Identifying bold managers with honest intentions is critical for long-term investors.
I was lucky enough to witness Michael Jordan play basketball. He raised the bar for the generation of players that followed. Successful CEOs will do the same. When investors evaluate company leadership, they should focus on their vision, their ability to evolve, and their willingness to learn from mistakes. CEOs with these qualities will deliver exceptional returns for shareholders.
Of the leaders mentioned above, I believe Jeff Bezos has incredible potential with Amazon. Investors should take a closer look at how he transforms the industries he enters. To understand how Amazon and another retailer will threaten Wal-Mart's dominance in the future, check out the Motley Fool report "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." Don't miss out on this free opportunity to learn more -- click here.
The Motley Fool owns shares of Berkshire Hathaway, IBM, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway, Apple, Netflix, Google, and Amazon.com, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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