“Whoever is careless with truth in small matters cannot be trusted in important affairs.”
—Albert Einstein
Being the boss is a tricky business, but the secret to success lies in how you treat people. Whether it’s someone’s first day on the job or their last, honesty goes a long way, especially when you realize how small the world is in your particular field.
The opportunity to be the head coach of the Los Angeles Lakers was a dream come true. When I got the call telling me it was even a possibility, all these emotions ran through my head. I’d played eleven seasons with the Lakers, six times going to the NBA Finals and three times winning a championship. I grew up in Los Angeles, fourteen blocks from the Forum. This was my team, and this was the job of a lifetime.
Jim Buss, the part owner and executive vice president of the organization, and General Manager Mitch Kupchak brought me in for several interviews and began the talks by saying one thing:
“The first two years are going to be really tough, are you OK with that?”
My response was, “I am OK, but are you OK with that?”
I could handle it. I knew what I was signing up for—a team with a lot of young players, an aging Kobe Bryant in the final years of his career, and an organization that was building for the future. A championship was out of the question from day one, but I knew winning basketball in LA, and I was confident I could bring us to that level once we had the right pieces in place.
I signed a two-year deal with a team option for a third year, but the talk was always that I would re-sign. We all agreed this was a three-or four-year project. They knew it. I knew it. We all knew what those first years were going to be like, and I trusted them when they said I was part of their long-term plans.
That was my thought process through the negotiations—they know me, I know them, I can trust them. When you tell me something and look me in the eye as you say it, I take it as gospel, because that’s how I am. I’m honest, and I expect honesty. Especially with people like Mitch and Jim, whom I’d had a relationship with for years; I expected them to stay true to their word.
That’s what hurt the most when Mitch broke the news after just two seasons that they were going in a different direction. I felt deceived. I felt that Jim Buss and Mitch Kupchak had used me to get through those final two years of Kobe Bryant’s career and saved their own butts by making me the scapegoat. It seemed as if that had been their plan all along. I may bleed purple and gold, but after that meeting, the blood was all over management’s hands.
I talked to a number of people in the following days. Jerry West. Kobe Bryant. Longtime Lakers trainer Gary Vitti. They all showed their support, as well as their shock at the team’s decision.
My dad called me the next day to see if I was OK. I said, “Pops, I’m good.” Then he called my girlfriend Cece.
“Cece, this is your soon-to-be-one-of-these-days father-in-law,” he said. (Of course she wanted me to know that part.) “I know my son, and he has a tendency to hold a lot of things in, so look after him. He won’t let you know if he’s really hurting, so just take care of him for me.”
He knows because he’s the same way. Where I grew up it was considered a sign of weakness for a man to show his emotions. As I’ve gotten older and had kids of my own, I’ve tried to let that go. I think it’s important to let your kids see you laugh and cry. But in situations like this it’s tough. I don’t cry over spilled milk.
I went home, decompressed, and went to the gym the next morning. Mentally I had moved on. There was nothing I could do about it, so I wasn’t going to dwell on it.
After years of working in the packaged food and bottled water industry for Nestlé, and buying and selling Deer Park, I was hired as president of McKesson Water Products Company. It was a large company that did $220 million in sales, and I had 2,500 employees working under me, so this was a big opportunity and a challenge I was ready to accept.
My predecessor, who had been promoted to a senior management position at McKesson Corporate—the parent company of McKesson Water Products Company—had made only modest changes to the company. The profit was going up by 5 percent annually because McKesson Water raised the prices each year, but it wasn’t growing as a company. We didn’t have a platform from which to grow.
There was no centralization. No system in place. McKesson Water had three different water brands—Sparkletts, Alhambra, and Crystal—and when it purchased a new company, that company would have to create a new strategic business unit with its own general manager, marketing team, and accounting department. Financially and operationally, it didn’t make much sense.
Our share was declining, and the customer quit rate was huge. Money from the price increase was being spent on recreating the old seltzer bottle and developing a line of fruit-flavored sparkling water instead of on helping to improve the trucks, the uniforms, and the efficiency of the routes, so route drivers were beside themselves. No one was listening to them, so they started an organizing drive. Rome was burning and nobody even knew it.
That’s what I walked into, and I knew right away that for some time I was likely going to be the bad guy.
I knew what I needed to do. I knew a lot of people would have to lose their jobs. It was heartbreaking for me to disrupt the lives of so many people, but if I didn’t do it the company would be out of business, and all 2,500 people would be back on the job market.
To pull this off the right way, I first needed to gain credibility, so I brought in an outside consulting firm so the managers I’d inherited could see what the 2,500 employees thought about the business—including the 230 in finance and administration, which is ridiculously high for a $220 million business.
Sparkletts was a family business that McKesson Co. had bought. Nobody ever got fired. If someone wasn’t capable, Sparkletts found a job for him or her somewhere else in the company. It had terrible technology. Closing the books took three weeks at the end of the month. It was a mess. There was no central control. If I wanted to bring in a new advertising agency I had to get the marketing managers from all the strategic business units to agree on it.
I needed to consolidate, and the consulting firm proved that, but I still had to create the logic trail to show why restructuring and letting a lot of people go made sense. I think the firing process should be almost as thorough as the hiring process. It just seems like the right thing.
Linda Rush, the head of human resources, was my psychiatrist during all of this. She had been with the company a long time, through different management systems, and she understood we needed to centralize everything. She listened to me vent daily about our lack of systems, but more importantly, she was on board with my vision for the company. There were mornings when I thought I was going to lose my mind and evenings where a few drinks were definitely in order, and she was right there for it all, keeping me sane and providing necessary feedback to keep me on the right path.
It took nine months to build up enough of a story to explain to the organization why we needed to centralize operations. I knew we could do it quick and ugly, or we could take forever, and if we took forever it might not be ugly, but it wouldn’t be effective.
I went to the CFO of McKesson Co. to tell him my plan, and he said that if I kept raising prices like my predecessors I would get promoted like everyone else, or I could do it my way and probably lose my job. He further said that I could do this, that it was what needed to be done, but that I would undoubtedly lose my job in the process and the person who succeeded me would benefit.
But it wasn’t about me. I had been hired for a job, and in my mind the only option was to save this company. Unfortunately, for that to happen, a thousand people needed to go.
When you’ve been in this league as long as I have, you’ve seen a lot when it comes to relationships and how people handle things. When I was the head coach of the then–New Orleans Hornets, the owner at the time, George Shinn, was telling the coaches and the players and the whole city, really, that he and General Manager Jeff Bower were going to do whatever it took to bring a championship to New Orleans. Money was no issue, he said… until, of course, it was an issue.
Behind closed doors Mr. Shinn told Bower that he wasn’t willing to pay a luxury tax, so he needed to trade whoever it took to get under the tax line. First on the chopping block was Tyson Chandler.
I was on the team bus when I got the news that TC had been traded to Oklahoma City, and I was not happy about it. Bower tried to convince me that we didn’t need him, but not only was he a great player, he was a great locker room guy. Everyone on the team loved him, and that team had great chemistry on and off the court.
To me Tyson was invaluable to our team. He was the most positive guy I had been around as a coach. He always came to practice with a smile, worked, never complained, kept his teammates in check, and, most importantly, was our best defensive communicator. He did all the little intangible things that don’t show up on the stat sheet but that a team needs to do to be championship caliber.
So I was sitting on the bus and David West walked on and he just stared at me for like three minutes. “I know how you’re feeling,” I said. “I’m feeling the same way too, but this is not my doing.”
He just shook his head and headed to the back of the bus. When we got to the arena, the locker room was as quiet as I’ve ever heard it. It was like a funeral. Everybody was sitting in there with heads down.
I tried to encourage them. “I’m very disappointed too,” I said. “I did not want this done, but life goes on, and we have to still play basketball. Our job is to come out here tonight and win a ball game. We have to put all this behind us for a while and go out there and focus on the game at hand.”
Like true professionals, they went out and won. But they were angry at the owner, and they expressed that in the media afterward.
A day later the trade was rescinded. Tyson failed a physical with Oklahoma City and was sent back to our team. It was crazy. We had a gala event with the organization shortly after, and both Tyson and Mr. Shinn were there with their wives.
“Can you talk to him?” Shinn asked me about Tyson. “You know I’m trying to talk to him. He won’t talk to me. He won’t return my calls.”
Tyson wouldn’t give him the time of day. He was angry and rightfully so, but I tried.
“Screw him. I’m not calling him. I want nothing to do with him,” was TC’s response.
Then their wives got into it a bit, with Mr. Shinn’s wife telling Tyson’s wife what Tyson should be doing, which Tyson’s wife did not take kindly to. It was an awkward scene, the kind of thing that can happen when you don’t handle these situations properly.
If you sit in your ivory tower and move parts around as if they are not human beings, the players are not going to appreciate that. Then when the deal falls through and you want to be a guy’s buddy again, it’s not going to happen. Had Mr. Shinn handled it differently, he and Tyson might have been able to work things out. Overall it was just bad business, which is ironic from someone who had thought he was making a “business decision.”
We went from 2,500 to 1,500 employees. It was a hard decision to make because I value loyalty, and in my first year on the job I was forced to break trust with a significant number of the employees. In order to let the team know that I had their best interests at heart, and that they should hold on to their trust, I didn’t just jump in and hand out pink slips across the board. I created task forces of frontline employees who made recommendations about what departments and jobs should be eliminated. They knew even better than senior management how inefficiently the company was run. Some employees even recommended the elimination of their own positions. Even though the task forces were on board, it was still hard for me to watch so many hardworking people pack up their boxes.
Every case was different, of course, and many times when I thought a person could be well suited to another position I tried to make that shift happen. Even as the company moved forward, I wanted to reward the loyalty of those who had stood by this decision.
One guy, we’ll call him Jim, had an MBA from a prestigious university and was an expert on strategic planning. His background was more staff than line, so I brought in somebody else as VP of marketing, even though that’s the job that Jim wanted. I didn’t think that he’d be well suited for it.
We had a small division called Aqua Vend, the precursor to Glacier Water. The person who had been running Aqua Vend was a longtime Sparkletts guy who was past his prime. Seeing the changes that were forthcoming, he decided to retire. I thought this was an opportunity for Jim to really see if he could run something.
I put him in as the general manager of Aqua Vend, and it was not a good fit. He was not an operating guy. He was overthinking things and doing far more analysis than necessary. He was getting caught in analysis paralysis, and not getting to answers. He had these lengthy presentations, but the Aqua Vend division never hit its numbers. So finally I said we had to make a change.
Since he had been so loyal to me, I wanted to do it in the softest way possible—a way that gave him the greatest flexibility to find another job and do it well. I called him into my office and I said, “Jim, we’ve got to make a change. You’re going to have to leave the company, but I want you to think about it, and come back to me with how you want to do this. We can give you severance. We can announce this however you’d like. Think about it, come back to me in a couple of weeks, and tell me what you want to do.”
A couple of weeks went by and I didn’t hear from him, so again I set up a meeting.
“Jim,” I said. “You were going to come back to me in a couple of weeks.”
“Oh, yeah,” he said. “I’m busy with the business and I have all these great ideas for what should happen with the business.”
“No, Jim, you’re not getting it. I want you to tell me how you would like the announcement to go on how you’re leaving. That’s all you need to be doing.”
A couple more weeks went by, and this time I had Linda in the room when he walked into what was now our third meeting.
“I figured out the right organization for Aqua Vend, and I need to fire this person and that person, and then we’ll have a smoother organization for me to operate from.”
“Jim, you’re not getting it,” I said. “You’re just not understanding. I’m talking about you leaving. Come back to me next week, and this time you’d better have something.”
He came in and again he started talking about changes, but I’d had Linda have an outplacement person waiting outside. This time I said, “Jim, you’re done as of today. The outplacement person will escort you and set you up for outplacement services.”
We needed to escort him out of the building. We arranged to send his personal belongings to him. He was gone. That’s just the way it works sometimes. Even when you try to do things the right way and allow the employee to exit on his own terms and start a new life elsewhere, it doesn’t go well. As a leader you don’t want a situation like this to discourage you and break your spirit for the next time, but sometimes you just have to fire someone and move on.
This wasn’t the first time the Lakers had let me go. After I’d played for them for ten seasons and won three championships, my contract was up and I was told they weren’t going to re-sign me.
Jerry West, the general manager at the time and a mentor to me throughout my career, called me into his office to tell me man-to-man.
His eyes started to tear up. He was the one who’d brought me to the Lakers, and we had been through so much together that this moment was just emotional for both of us.
“Listen,” he said. “We’ve got to move forward. There’s this kid Anthony Peeler. We’re going to go with him. You’ve been great in this organization.”
“Jerry, I just appreciate it,” I said with tears in my eyes. “Thank you so much for everything.”
At that point, being a Los Angeles Laker was all I had ever known. Having played alongside Magic Johnson, Kareem Abdul-Jabbar, James Worthy, and all my great teammates over the years, including even Mitch Kupchak, I felt I was part of something special. Nearly every season we were championship contenders, and we played a style of basketball that changed the game and left a mark on the history of the NBA.
When I walked out of Jerry’s office, I was sad it was over, but in my heart I was happy I had gotten to be part of that run.
Afterward reporter Jim Hill came over to my house and asked me a few questions on camera, and I just told him the same thing. I said that I loved the organization and had no hard feelings for Jerry West, owner Dr. Buss, or anyone with the Lakers.
I knew I was leaving, but that in my heart I would always be a Laker. That’s why it was so important for me to leave on good terms. I took pride in wearing the purple and gold, and to me the team was like family. Business is business, so in sports there always comes a time when you have to part ways, but when you get to shake hands with and even hug the general manager on your way out, you know you handled business the right way.
Three years later I returned to the Lakers and played my final season in the NBA for the team I loved. And eighteen years after that, I returned as head coach. That’s what happens when you do business the right way. You can do a good job, leave, have other experiences, and return in a different capacity to a place you consider your home.
Along the way you never know when the guy who was sitting next to you in one job is going to be the guy hiring you for another. Every relationship is important, not just because of what the other person might do for you someday, but also because of how you can affect the other person’s life. If you treat people with respect, you’ll walk away a winner no matter the situation.
When you get treated like family, you can always return. When you’re just an employee, none of that matters. This time around, as coach of the Lakers, I was disappointed in Mitch, but even though it ended on a sour note, my years of love for and loyalty to the Lakers make this a bond that can’t be broken.
I don’t hold anything against Mitch whatsoever. He’s going to continue to be the GM and bring that team to championship-caliber basketball. Holding a grudge takes too much energy. It’s not my style. And to be honest, it’s bad for business. Dwelling on the past prevents you from making good decisions for your future. This experience with the Lakers was just another lesson learned. It was one that could test the heart of a champion but not one that could break it. I’ve come too far to let that happen.
It ended up taking four years to turn around the McKesson Water Products Company, much longer than expected, because the California economy tanked, but we centralized everything—one person running marketing, one person running routes, one person running manufacturing. We became very sophisticated. We had data on every customer, employees voted not to join a union, the route drivers were making more money, and we cut an annual 60 percent quit rate in half. We even increased the employee base back to 2,500, with our average sales per employee double what it had been the first time around.
We went from $220 million to over $400 million in sales. Six years after that we sold the water division to Danone for $1.1 billion. My top eight executives all became millionaires. It all worked out in the end, but getting there was tough, especially when it came to having to fire a thousand people.
People fear the unknown, so they have a hard time letting go. What I have found is that if you give honest feedback to people, they know if it’s working or not working. Even though they are afraid of what the future can bring, more often than not it works out best for that person as well as for the organization. I’ve had a number of people thank me after the fact because being let go gave them a chance to step back and say, “What should I really be doing?” Even fairly senior people often end up in a much better place.
Jim was a very bright guy. He could have been a college professor. He could have been writing books. At his core he was really a staff person, someone who should have been working with an expense budget and not a profit-and-loss responsibility. He would have fit in well at a department that studies market research and tells the line people what customers are saying about the company’s products. That’s the kind of thing he was good at. He could have done that anywhere. There were lots of places where his skill set would have been more applicable.
At McKesson Water we hired outplacement specialists who did testing to find what other areas might be more appropriate for a person’s skill set, helped with résumé building, and gave people an office so they weren’t sitting at home and wondering what they should be doing. We helped as much as we could, and I think people appreciated that.
By the time I left, it’s safe to say I was a pretty popular guy at McKesson Water, and I like to think it’s because management treated people with respect and did things the right way. But we still had to say good-bye to people who were like family to many in the company. That takes a toll on a leader emotionally, and you spend a lot of time tossing and turning at night, thinking about the lives affected by the restructuring. But I had no choice. Without the complete overhaul, all 2,500 employees would have eventually lost their jobs. Nonetheless, it was one of the hardest things I’ve ever had to do.