“You cannot swim for new horizons until you have courage to lose sight of the shore.”
—William Faulkner
Confidence plays a huge role in the success of a leader. You have to believe not only in yourself and your ability to be great, but also that the support around you will come through when called upon.
After two seasons with the Indiana Pacers and one with the expansion Vancouver Grizzlies, I knew my NBA career was likely coming to a close.
In a perfect world I would retire a Laker. That was the dream at the time, and as it turned out, GM Jerry West was there to help make my dream come true.
The team had just traded for Kobe Bryant and got Shaquille O’Neal through free agency, so it was at the start of something great before the 1996–97 season, when Jerry told me he had a spot for me.
“We’re going to need your leadership,” he said, “but you’re going to have to make the team. It won’t be a guaranteed contract.”
Now, there are a number of ways a person can react to that statement. The initial instinct might be to let pride take over and whine and scream about what I’d done for the organization. How dare they make me earn a spot on the roster? Didn’t three rings in ten seasons do that?
But that’s not who I am. That’s not a champion’s mentality. I played every game with something to prove, so to me this was nothing. I was happy to have the opportunity, and I was confident in my ability to do what it took to make the team.
Was it risky to reach for the stars and sign with the Lakers when I likely could have walked right onto a lesser team? Sure. But it was worth it to me to finish my career in purple and gold.
Once I put my name on that piece of paper, I knew I’d make it. Even though it wasn’t a guaranteed contract, to me it was a guarantee.
When I played really well during the first few days of training camp, Jerry came to talk to me.
“Young man,” he said, “you’re doing well. You keep playing like this, and you’re going to make the team.”
I just kind of smiled. I knew I was making the team. He was just keeping me on my toes and making sure this old man didn’t coast through training camp.
Once it was official and I did make the team, I felt the same excitement as the first time I’d put on the jersey. When you love the game, you appreciate every opportunity. Being a Laker was special, and I knew that this was probably my last shot at playing for the team I loved.
On the other end of the bench that year was Kobe Bryant, who was probably the most reserved eighteen-year-old I had ever seen. He was real into ball—lived, ate, slept basketball—but he was quiet and reserved. The first time I met him was at a rookie transitional program, and for the whole week he called me Mr. Scott. I said, “Look, you can call me Byron,” and he responded, “OK, Mr. Scott.” That’s just the kind of kid he was. He respected the game and he appreciated putting on the jersey as much as I did.
Kobe was so focused. He didn’t care about having friends or doing anything outside of basketball. One day in the back of the team bus, I sat down with him and talked to him about his goals.
“What do you want to be in this league?” I asked. “What do you want to accomplish?”
He paused for maybe two seconds, and said, “I want to be the best player in this league.”
At that time he was coming in at eight thirty in the morning, shooting in the Forum when the lights were still off. I would go back there to get treatment for my ailing body parts and everything, and he would be out there by himself. He had the will and the determination, but he wasn’t getting much playing time that first year. When he told me that, I said, “You will be. You keep working the way you work and you will be.”
Kobe was full of confidence, but that doesn’t always translate on the court. Some guys get out there and crumble the second it gets hard. That was never going to happen to a guy like Kobe Bryant, but it was my job that year to encourage him to take risks and push him to achieve his goal.
A big part of risk is trust. Byron had to trust himself that he could make the team, but the coaches and team had to trust in him as a leader too. They had to know that his value was great and understand what he brought to the table.
When I first got involved with Freshpet, it was Dick Kassar, then CFO of Meow Mix, who reached out with the offer. I knew Dick from summering in Vermont. I played bridge with him. He was a sharp businessman, but also an all-around good person. I do business only with people like that. I need to know someone first. I bet on the jockey, not the horse. I have to be confident that the person I’m investing in is really good at what he or she does. It’s how I make decisions. For Dick it was the same thing. He likes to compare me to Larry David from Curb Your Enthusiasm and jokes that every one of my stories “starts with Adam and Eve.” We knew we were great partners in bridge, and we knew we’d be great partners on this project.
When you are stepping outside your comfort zone with investing, you limit your risk by fully believing in the people you’re working with. A 40 percent return on my original investment after just five months was great money, but I trusted that sticking with Dick and raising the funds would lead to something even better. It was a risk, and there was a lot of money at stake, but I liked the management team and believed in the concept.
Freshpet was a start-up but was unique in the amount of difficulties a competitor would have entering the market. In every supermarket or pet store we entered, we owned the refrigerator and essentially the real estate within the store. A second company would have real trouble getting a second refrigerator in, and wouldn’t be able to put product in our fridge because we owned it. That command of the real estate, along with the trend of the humanization of pets (people spending more money to feed their animals better than humans), made Freshpet feel like a winner even though it was a company starting from scratch. So while I was shifting away from my normal investing plan, it was a calculated risk.
Just as I put my trust in Dick Kassar, the banks had to put their trust in me. In the case of the City National Bank, the executive vice president of specialty banking, Bob Iritani, is someone who also bets on the jockey, not the horse. City National had funded Glacier Water, so it knew that I always did what I said I was going to do, and that if things were going wrong, I told the bank, so there were never any surprises.
While Bob cared about Freshpet and the barriers to entry and everything I thought would make it successful, the fact that I was the one who thought it was going to be successful was what sold him on giving us the loan. When I approached him about it, he trusted me and thought we could get it done, because of the success of the deal we’d made for Glacier Water Vending.
So it became this circle of trust among the bank, me, and the investors, and with Dick Kassar that made the risk seem like less of a risk. Byron knew the Lakers organization, he trusted Jerry West, who was always honest with him, and he could look at guys like Kobe and Shaq and know it was going to be a successful venture. Just as I could have walked away early and made 40 percent on my investment, he could have signed with another franchise and not worried about making the team, but when there is a solid circle of trust, you stop thinking about the risk and start focusing on the reward.
As a coach you always want to encourage risk. When I was an assistant coach with the Sacramento Kings, the captain of the risk takers, Jason Williams, was one of the stars of the team. White Chocolate—who by the way hated that nickname—was an amazing talent. He would do things that were so spectacular that your jaw would just drop to the floor. But there were times when he was frustrating from a coach’s standpoint, because he would come down and play a showboat style of playground basketball.
There’s a difference between a wild roll of the dice and a calculated risk. In basketball we teach calculated risks. Never fear the big shot, but make it only when it’s the right play.
In his first few years J-Will never took into consideration the clock, the score, or the situation. He just played, which at times frustrated both his teammates and head coach Rick Adelman. But for the most part the kid played with the right attitude. He wanted to win, and he wanted to play for his teammates, but he didn’t always know how to properly play the odds, because he had been playing this style of basketball all his life.
As his coach I tried to put the brakes on his wild style of play as often as possible. He would do something crazy and during a time-out I’d say, “J, just a nice little chest pass, you don’t have to go around your back and try and hit it with your elbow.”
“I hear you, Coach, I hear you.”
What he meant was, I hear you, but leave me alone.
He had that type of attitude, but I loved him because he was fun to be around and he had no agenda. He just wanted to play and enjoy the game. He wasn’t worried about money or playing time, and there was no ego there. You don’t get a lot of guys like that—guys who just love the game of basketball.
A lot of times guys let all the other stuff get in the way, and then the purest form of the game kind of escapes them. Jason, he had that pure form all the time. But he would just drive me crazy because there would be two minutes left in a game, and we’d have a six-point lead, and he’d take a quick shot that we didn’t need. We could try for that shot twenty seconds later, with less time on the shot clock. If you left him open, Jason was going to shoot it. He didn’t play the odds.
With someone like Jason, experience was key. As he matured with the Kings, and then when he moved on to the Memphis Grizzlies and Miami Heat, he grew into a player who learned when to hold ’em and when to fold ’em.
Experience and knowledge of the game helped him improve more than someone like me sitting him down and telling him what to do. Like everyone, he wanted to win, so when he was ready to take it upon himself to make changes in order to win, he did just that. He was still taking risks with his shots and passes, but they were calculated risks, and in 2006 with the Miami Heat he went all in and won a championship.
Trust and risk go hand in hand on many levels. Whether it’s with a rookie or a seasoned veteran, you have to trust people to not only take the shot, but also recover if they miss. Anytime I have someone working for me in any capacity I want to encourage them to take risks, but I have to be able to trust them first.
When assigning projects to key managers I’ll focus on the strategy for what we’re trying to accomplish, and ask them to come back with tactics. Once we’ve agreed on the tactics, I let them do it. If they make mistakes, I let them tell me how they’re going to correct things. The more you can let people learn from their own mistakes, the better off they’re going to be long-term and the better off the company will ultimately be. That person will be more comfortable taking risks, and it’s really important that people be willing to take risks without feeling as if they’ll be punished if they’re not successful. As long as they don’t make the same error twice, then it’s OK.
I think communicating with both the people you’re reporting to and the people reporting to you is important. I don’t like to be surprised, and I don’t like for others to be surprised. When I was working my way up to the CEO level, I never felt any shame in going to a superior and discussing something that was going wrong. We’d talk about it and we’d adjust. I’ve always had that mind-set, and I never felt I would be punished for asking for help when I needed it. As a CEO I tried to lead in the same way.
When you don’t trust someone enough to have that relationship and let him or her take risks, you shouldn’t get into business with that person in the first place. When I was with McKesson we were looking to expand the Sparkletts brand to Seattle, and I ran into a situation where trust became a problem.
The easiest way to expand in a city is to buy another company. What we had successfully done in most cities was buy a company and use that as a foundation from which to expand. In Seattle I knew the person who ran the largest bottled water company, so we negotiated with this person, and we thought we had a deal.
It was a family-owned business and his dad and his brother were also involved. They were each one-third partners. This guy wanted us to cut a special deal that gave him more than a third of the profits from the sale of the company. I told him right away that we weren’t going to do anything under the table. We’d give him the price he wanted, but it would all be aboveboard, and however ownership was shared among the three of them, that’s how the payout would be structured.
Ultimately the negotiation broke down because we wouldn’t meet his demands. I came away from that episode angry that the guy was so duplicitous that he’d want to cheat his own family. I knew I couldn’t trust him, and I’m not going to take a risk on someone I don’t trust.
If we had bought his company, we would also have wanted him to run the Seattle territory. We were going to invest a lot of money in the region, so he could have made a lot more. But once I knew I couldn’t trust him, I didn’t have the foundation to go forward with his company.
Family dynamics is a very complex subject. It’s easy to say you want somebody who’s a great family man, but what’s more important to me is that I want somebody who is honest, and is going to work hard and care about what he does. Personal family issues aside, I want somebody who is a great business partner to go to war with.
When the deal didn’t work out, we needed a new plan. I talked to my head of route operations at Sparkletts and we decided that we loved this market, so we would get in it ourselves from scratch. So we went and we got a branch location. We moved people from other parts of the country, and we started to sell Sparkletts in the market against this person who wanted to cheat his family members out of money. It was costly and a risk, but not as big a risk as getting into business with the wrong people. It took quite a while, but we ended up being the largest home and office water delivery company in the Pacific Northwest. The other guy had to settle for second place.
Kobe was different. He was a student of the game who, from day one, was a sponge. He wanted to hear everything I had to say. He wanted to hear what everyone had to say, and he was never afraid to ask questions. Both he and point guard Derek Fisher would ask about the Lakers championships and what we’d done to win. They were both big into eighties basketball then and they would listen to stories with childlike enthusiasm. They loved Showtime, and Kobe was always saying, “I wish I was playing back then.” My response was always, “Well, I’m glad you weren’t, because I would’ve been coming off the bench.”
That rookie year, though, it was the other way around. He was eighteen and I was thirty-six, but at the time he wasn’t even sixth man. We had Eddie Jones and Nick Van Exel, so Kobe didn’t play a whole hell of a lot.
But he was a fighter. I knew he was special right away. In the gym he worked harder than anyone else. On the court he was a pit bull—just aggressive every chance he got. You need players who have that mentality. Kobe has that mentality, that killer instinct. He wants to win, and he’ll do whatever it takes to win.
In the second round of the playoffs he got his chance to shine. We were playing the Utah Jazz, and in game four I sprained my wrist pretty bad. I was playing a lot in the playoffs, so it shook up the lineup when I went in the locker room and didn’t go back in the game.
The next day my wrist swelled up as we were flying to Utah. I went out before the game to see if I could shoot, and I couldn’t reach the basket from six feet. I told Del Harris, who was the coach at the time, that I couldn’t go. That moved Kobe up.
In game five—which was an elimination game for us—he was put in the position in the last couple of minutes of the game to take big shots. Instead of coming through, however, he threw up three air balls between the fourth quarter and overtime. After each one the Utah fans screamed, “Aaaaair ballll” louder and louder. It was tough to watch.
That day I said to Del, “I’m telling you, that kid, I know him. He’s going to come back even stronger because of that.” I wasn’t around the next year, but in Kobe’s second season, he was the leading bench scorer in the league and he made the all-star team. Then, of course, you know how the rest worked out for him: eighteen all-star appearances, five championships, an MVP award, and just a whole houseful of trophies.
Not letting those shots affect you is in your DNA when you are a winner. It’s part of who you are. First of all, you’ve got to have enough guts to take the shots in the first place. You have to be willing to fail. He hadn’t played much all year, but he came in and took those shots as if he’d been playing all season long.
He was willing to give his all—at eighteen years old—and that’s why I knew he was going be great. We had some veterans on the floor who did not want to take the shots that Kobe took. Not being blamed for a loss was more important to them than potentially being responsible for a victory. That’s not a champion’s mind-set. Winners want that opportunity and Kobe never shied away from having the ball in his hands. Even after he put up two air balls, he didn’t mind. He went out there and shot a third. He was willing to be the goat just as much as he yearned to be the hero.
Until his last game day he trusted himself more than he trusted anybody else on the floor. Most great players are like that. To earn their trust, you have to show them that you’re not going to back down, you’re not scared to take the big shots. Then they’ll have that trust in you.
Magic was built differently. Magic would take the shot, but he was more than willing to make the pass to the open player for the right shot. He wasn’t thinking about whether the other person was going to make the shot or not. He was just thinking about the right basketball play to make. It’s a different mentality, but I think they both ended up doing OK.
You have to be flexible in your decisions. You have to be willing to move from one option to another based on circumstances. You have to be willing to take risks. And you have to do it with as little emotion as possible. Byron never shows his emotions. He believes in himself the way Kobe believes in himself, and he believes in his guys the way Magic does, so even when times are tough, he stands strong. When we get together for a game of liar’s poker, it’s an incredible challenge figuring him out. That poker face is key in taking risks. If your team sees you sweat, they start to sweat.
At Freshpet we were dealt a number of blows early on, and I too needed to stand strong and power forward. The trends were great for Freshpet, but right at the time we started this company, the economy tanked. It was not good timing for launching a new high-end product. We’d thought we could just go in and sell the idea and have no problem getting accounts to understand it, but we were met with a lot of pushback.
We were trying to change how people bought pet food. We provided the refrigerators, and they required a total reorganization of the planogram—the layout of product placement displayed in a store—in an aisle that had no electricity.
You had to bring electricity to the pet food aisle, and it was not an easy sell. We went through that $39 million (the equity plus the working capital) a whole lot faster than we’d expected, and growth was much slower. We were adding maybe a thousand stores a year, but we were piling up operating losses in a big way. That was partly because the economy was bad, and partly because even though the concept was great, and senior management of the various retail outlets really got it, their field people found it extremely difficult. They were not thrilled about it. They didn’t want to have to go through all this work installing electrical and doing an entire planogram reorganization just for our product.
We were off to a bad start. Some people might start second-guessing their decision at this point, but a winner focuses on what he can do to win, not what he should have done to avoid a loss.
Over the years I’ve learned that there are small victories within every failure, including the reward of simply having taken the risk in the first place. Throughout my career I’ve come to realize that you don’t want to chop someone’s head off for taking a risk; instead you want to encourage it. At Freshpet there was a lot of risk, and the management team was trailblazing with an all-natural refrigerated product, so they were going to make mistakes along the way, and I had to allow people to do that. If they failed from time to time, and learned from their mistakes, then they were better prepared the next time. Failure isn’t just a stepping-stone, it’s a milestone on the road to future success.