Manage your career like a professional athlete: 4 strategic lessons from LeBron James’ free agency

[Update: Title and text edited to reflect a new idea that hit me unexpectedly]

The old rules at work have been rewritten. Company loyalty is vanishing and competition has never been tougher. New rules call for a revised way of thinking, and Stephen M. Pollan and Mark Levine in Die Broke suggest a new role model:

Look to professional athletes. They do their best and are part of the team, but they’re primarily focused on getting the best financial deal they can. They know that their tenure with any one team is temporary—in their case for as long as their contract runs. And even with that contract, they accept they could be traded tomorrow to another team, or they could be cut from the squad or placed on waivers.

[p. 24-25 of Die Broke]

So what do you need to do? Pollan and Levine offer practical suggestions in their book. Without revealing too much, I categorized the advice as being strategic in nature. Having a good career is about responding to the current work environment and being one step ahead of your opponent.

What does that mean? Luckily we can look before we leap. We have the advantage of learning from star athletes and seeing how they navigate their career. The press reports many facets of the negotiations. Most importantly, we get details about the final contract they get to see if the plan was successful. Perhaps that means sports news can be good for your career

An interesting example is happening right now NBA with all-star LeBron James. LeBron will be a free agent in 2010 but he is already taking steps to manage that eventuality. He has openly discussed the possibility of playing for other teams, and perhaps even in Europe. Many, including myself, believe LeBron is using the art of strategy effectively and will end up with a great contract.

Judging from the news, I see four strategic moves LeBron that is making that could be useful for all of us. The moves are: thinking ahead, using a risky threat, managing his reputation, and appearing unpredictable.

1. Thinking ahead

One of the basic ideas in strategy is to think ahead and take actions now. It is not merely what we do now that matters, but how those actions will be viewed in the future. Actions that seem strange or inconsistent may make sense when properly analyzed.

Here is an amusing anecdote about a married couple that illustrates the idea:

While hiking in the countryside, my friend Ev and I spotted a huge bed of mushrooms that we knew to be edible. We gathered a large basketful and sautéed them that night. My husband, Dick, refused to eat them, thinking they might be poisonous.

Two weeks later, Ev and I gathered more mushrooms. This time, Dick joined us.

“How is it that you’re eating these mushrooms tonight,” I asked, “when you wouldn’t touch the ones we brought home two weeks ago?”

“I thought about it,” Dick explained seriously, “and I figured it would be better to be found dead with you two than to try to explain two dead women in our home.”

[Source: Reader's Digest, May 1999, p. 109]

Dick’s reply is humorous and well-thought—he should not merely consider his own preferences but take into account the possible results of other people’s actions.

In a similar vein, LeBron is thinking ahead and acting now. He is taking a big step by talking about free agency nearly 20 months in advance. And there is good reason why his actions make sense if you think ahead.

Consider the following line of reasoning.

Case 1: LeBron goes to another team. In this case talking now will likely help him prime the market. Interested teams like the New York Knicks can spend time tweaking their roster and planning salary decisions (which the Knicks do appear to be doing). Therefore, LeBron is clearly better off talking now.

Case 2: LeBron stays in Cleveland. Even if LeBron stays, it is likely the case that talking now couldn’t hurt. Offers from other teams will increase LeBron’s negotiating power with Cleveland, regardless of whether he takes them. So again, talking is better than not.

This discussion is a simplification but it is the kind of thinking that can help frame the problem. In reality there are many other possibilities during the next two years. One of those is getting an early contract extension, and this is where using a risky threat may help.

Using a risky threat

Threats can be a useful negotiating device. Usually you have to demonstrate credibility to be taken seriously, like a mobster who makes examples out of squealers. But in some cases, it is possible to make a threat believable without much effort. I call this idea a “risky threat,” a threat that poses little harm to you but could be a great harm to your opponent. Others will have little choice but to take the threat seriously.

A historical example can illustrate the idea. During the Cold War, the United States used the risky threat of nuclear retaliation as part of its foreign policy. It was a dangerous policy, but it was fairly successful. The reason was that other countries had to take the threat as a serious one. It would have been too risky to act otherwise.

LeBron appears to be using a risky threat as well. He’s threatening that he’ll leave Cleveland if someone else pays him enough. LeBron’s exit would hurt Cleveland immensely as he is the main attraction on the team. Cleveland management, in turn, has little choice but to take LeBron’s threat seriously even if they do not believe it.

Ultimately this increases LeBron’s negotiating power. The strategy may lead to Cleveland offering a large preemptive contract or a much bigger one during free agency. In any case, LeBron wins.

But there is one hitch to all of this: what about reputation?

Managing reputation

If threats always worked, then good employees might threaten to leave all the time. The reason they don’t is reputation.

When games are repeated, past actions are remembered and used to determine whether a player is trustworthy. Employees that constantly threaten to leave may earn the label of being disloyal. While this is somewhat unfair, there is some logic to it. Employers are hesitant about hiring job hoppers, worrying such employees might leave them abruptly. Reputation has an important connection with threats and must be considered.

This is one area where LeBron has been criticized. Charles Barkley recently aired his opinion and gave some unwanted advice:

“If I was LeBron James, I would shut the hell up,” Barkley said in the Wednesday interview. “I’m a big LeBron fan. He’s a stud. You gotta give him his props. I’m getting so annoyed he’s talking about what he’s going to do in two years. I think it’s disrespectful to the game. I think it’s disrespectful to the Cavaliers.”

…

Barkley, a popular studio analyst on TNT’s NBA broadcasts, likened James’ actions to him going on the network and saying he can’t wait to go to ESPN in two years.

[source]

Barkley does have a point. Even if LeBron is playing good strategy, he must worry about perception. And in most jobs, it is seen as disrespectful to publicly campaign for future employment while honoring a current contract.

LeBron does not agree with Barkley who he called “stupid,” but nevertheless he is trying to manage reputation in other ways.

LeBron says all the right things when asked about his commitment to Cleveland. Here is one sample: “I am focusing on the team I have here and the relationship I have with the Cavs.” Some have noted LeBron’s on-court performance backs up the commitment. Cleveland ownership seems to be on LeBron’s side as well.

What drives this story is there is a lot of speculation about what LeBron might do. Perhaps this is not by accident.

Appearing unpredictable

In some cases, the best move is to act randomly. If Cleveland knew LeBron was staying for sure, it could offer him less money. If other teams knew LeBron was leaving, they could also reduce bids knowing there is one less buyer. The best action is therefore to conceal the real motives and stay uncommitted.

This is one area that LeBron is able to play both sides very well. In New York he told fans that his 2010 free agency would be special. But then he later backed off. Read this reaction when he was asked point blank about his future employment:

After LeBron James dropped 31 points on the Nets and survived the voracious New York media last Tuesday, I told him, “You know tomorrow’s newspapers are going to have you heading to New York.”

He laughed, shook his head and said, “Everybody thinks they know where I’m going before I even know.”

[source]

LeBron’s statements have generated so much confusion that it will keep everyone guessing.

In general, surprise can be a powerful idea and I suggest you consider it too. In the workplace, the translation is to keep your job search a secret and stay uncommitted to any one employer. Do not be afraid to have your company a little surprised when you leave. It is in your strategic advantage to do so.