The Hinkie Letters — Part I: “The Process”

First off, check out Cory’s extremely entertaining recap of an extremely underwhelming Cavs loss last night. Second, over the past few weeks, Tom Pestak and I have been exchanging letters with long time reader/commenter, Mac. The conversation started in the comment section of the Reader 5 on 5, as a reaction to this piece in ESPN the Magazine on Sam Hinkie and the Sixer’s “Plan to win (yes, really).” The whole piece struck Mac and I as naive at best, or as Mac said.. “The things they [the Sixers] are doing and saying about how the short term pain is all for long term gain are the things PE/finance guys do and say whether they intend to save your company or bleed it dry and leave other people to bury the corpse.” Mac expounded.

I am really sick of people patting themselves on the back for not being archaic dinosaurs like Jeanie Buss or Russ Granick and understanding what the Sixers are doing is really smart. Tanking and being a free rider while other people try to be good sports because the league doesn’t really work without a good faith effort to not mail it in unless you are a top five team is really smart, in the way that putting your money in tax shelters in the Bahamas and not paying your share of taxes is smart. It is smart in the way that forming a corporation and putting your assets in it and making your kids shareholders so you don’t have to pay estate tax is smart. It is smart in the way that rich people living in economically segregated neighborhoods so their kids can go to the best possible public schools funded by local property taxes is smart. It is smart and worthy of praise if maximizing self-interest is the epitome of human intelligence and achievement. It is strange to me that millenials, who in many ways seem much more progressive and empathetic than my generation, seem to so easily accept the premise that as long as it is legal, screwing over the common good just to get every last squeeze out of the orange for yourself isn’t merely acceptable, but the only rational thing to do.

If you haven’t checked out the comment section of that piece, I recommend you do so.  It’s one of my faves, and Mac, Ross, C6H12O6, and CLF all contributed to an enlightening conversation. We went deep down the rabbit hole. Naturally, this sparked an offline conversation about the state of team-building in the NBA between Mac, our resident cynical skeptic (me), and our defender of capitalism, Mom, America, and Apple Pie (Tom Pestak). We’re sharing it with you in a two part series that will run this week. Enjoy.

Mac

Nate and Tom,

I am sure I will be accused of being the old man yelling at kids to get off my lawn on these things, but I’m a little fed up with “admiring the Emperor’s New Clothes more loudly than the next guy” being what passes for being a smart basketball consumer these days. And you know what, that putdown is fraught with moral ambiguity. People shouldn’t trespass! Respect for private property is the bedrock principle of any society under the rule of law.

For those of us who entered the corporate workforce in the late Nineties, we couldn’t go a month without some lunchtime presentation exhorting us to “think out of the box” in order to create a “paradigm shift.” Well, fast forward to 2015 and the empty buzz phrase de jour appears to be “it’s a process,” especially in the NBA. Every single GM, coach, player, media talking head, blogger, “smart” fan and basketball groupie hanging out at the Houston Doubletree hoping to be hit on by Anthony Tolliver is careful to note that their favorite team has a process, one so painstakingly crafted and mercilessly executed that other GMs simply call your GM “The Legend” (even Larry Legend, which is kind of confusing). A process so admirable and complete unto itself that the results it may or may not attain do not even matter.

Setting aside the meaningless of the phrase — I mean, taking a crap successfully indoors is a process, but I don’t feel the need to point that out to my wife before I go to the can — I’m not surprised GMs and coaches love to talk up process even to the point of saying that good process trumps results. And this all makes sense if you are them, because if you have good results, then claiming that your process created them practically on autopilot allows you to take all the credit and marginalize the role played by chance. If you have bad results, then saying that your process needs more time to be fully implemented is an excuse for failure that is difficult if not impossible to (initially, anyway) refute. There is simply no downside to claiming to be process-driven when you’re the guy on the hook to produce results. What I am surprised by, I guess, is how easily the media and fans swallow this tripe whole and then regurgitate it on skeptics like myself. I don’t know if it is born of optimism or desperation or a misguided belief that it makes them sound like out of the box thinkers who are part of the paradigm shift. But I wish it would stop because it has made some of the dialogue among “smart” basketball fans intellectually dubious, even fraudulent.

Bull*** Bingo

There is nothing we hold dear in this universe where we divorce process from results, unless you live in a sovereign biodome ruled by Montessorian principles. The Art of War does not say “create a process for fighting the enemy, as long as your troops execute it faithfully, it does not matter who wins the war.” No human (well, Jeff Bezos, maybe) has ever said “I’ve got a process for finding romance, and as long as I carry it out correctly, whether I actually end up with someone is secondary.” A surgeon who says “I executed the procedure correctly and that is the important thing, not whether the patient lived or died” is giving his deposition in the ensuing malpractice suit. And yes, my dear friends who love smart finance types running their basketball teams, no successful captain of finance has ever considered his job to be executing a very well thought out process for trying to make money, and not actually making money. It’s after you make the actual money that you write the book about process so you can make sure people know that you aren’t just rich but a genius too, unless you’re too busy yacht-racing with bikini model crews or collecting diamond shorts or whatever it is that obscenely wealthy people do in their spare time.

Process is overrated and often isn’t even a thing that happened. The conventional wisdom has been that the important thing is the result (on-court success, preferably sustained over a period of time) and that there are many ways to get there. The new wisdom seems to be that the important thing is to utilize the process blessed by the people who consider themselves the mavens of such things. Failing the “smart” way is more deserving of credit than succeeding the “dumb” way. I’m sorry that I am so behind the times, but it is not clear to me what was wrong with the conventional wisdom (which I note still applies in every business other than the running of basketball teams), and the new wisdom seems very meta to me. The Deng Xioping doctrine was true 1,000 years ago, true when he said it, and will be true when they are our cruel furry overlords. It doesn’t matter whether a cat is black or white, as long as it catches mice. And when the Cavs (see what I did there?) win the NBA championship this year, there will be no asterisk that reads “no real process”. Is it possible to be a smart and informed person and feel this way? Or am I “stuck in the Stone Age” (i.e., 2012)?

Best regards,
Mac

Tom Pestak

Consider this a stream of consciousness. Could be a hot mess – could be a good counter argument if we focus it a little. I’m not really sure, but I trust you to give me your full and unadulterated opinion, Nate.

If you entered Junior High in the 90s the main paradigm currents that dragged you along were (in order): 1.) Throwing trash in a trash can suddenly became evil, and 2.) you no longer had to call Jessica’s Dad and ask if Jennifer (Jessica’s younger sister) was available – you could just Instant Message her, or really, any AshleyQT99 in the world – and keep your squeaky voice and pimples as repressed as possible.

As it were, two of the worst innovations of the 20th century intersected in 1995: helicopter parenting and internet telepresence. Almost overnight, the last vestige of a bygone era of risky American self-actualization crumbled. Your parents ensured you no longer had to take responsibility for your actions and the internet ensured you no longer had to take ownership of your self. Craft a virtual identity, and communicate on your terms, in your isolated spaces, one calculated away message at a time. In the event that a conflict should arise, “it’s just a misunderstanding (note the passivity) – I wasn’t upset at all, just hard to get tone across in a txt msg lol.”

Thus an entire generation emerged without the ability to commit to a struggle. As it turns out, real accomplishments are hard, particularly in a global marketplace, and (shocker) real relationships, where you have to stare someone in the eye and make vulnerable your entire flesh is, at the very least, uncomfortable.

Just as surely as we gained an unprecedented (and unnatural) entitlement of flexibility and protection we lost the stomach for struggling through a process. Things should just work. Money and prestige should rain down for simply showing up. Are you familiar with ‘Ryan’ from “The Office”? If not, see what has been wrought! (note the passivity)

“It’s a process” is the almost perfect antidote to much of what ails young adults. (would be perfect if it wasn’t more passive tense bullshit) “It’s a process” is a commitment to growth, however minute, however arduous, that simultaneously reduces the expectations of instant gratification. If it seems like a paradigm shift in press conferences that’s because it used to go without saying. Youtube (as a verb) LeBron James’ “Not one, not two…” celebration of entitlement, immediately following a second straight failure. Contrast that with his coming home letter, which reads “It will be a long process, much longer than it was in 2010. My patience will get tested. I know that.” This, after ascending to ‘Best on the Planet’ status, and following four straight trips to the NBA finals. The bimodal evaluation of sporting competition into “RINGZ” and “failure to RINGZ” perverts the reality that is: there is beauty, and honor, and heroism in the struggle. For the athlete this is a call to individual discipline and team cohesiveness. It’s why the San Antonio Spurs won the NBA championship without the most talent or athleticism, and how the Ohio State Buckeyes overcame “Not one, not two…” but three quarterbacks under center. They trusted, and committed to, the process.

For todays young professionals, “the process” is about habit building and resiliency. It’s about abandoning the “not one, not two” fantasies of “you can be anything you want to be!” and squaring with the reality of whole self. It’s about committing to self-improvement without any guarantees that a dream job awaits each morning, just a short drive from Pleasantville.

In days past, adolescence was the beginning of the process. The first taste of failure, embarrassment, bullying, self-appraisal, inescapable conflict. It was a time for building coping mechanisms, committing to habits, and preparing for a seat at the grownup table. So “it’s a process” is just an attempt to make up for lost time, when those words weren’t necessary because it was the unspoken reality of life.

In the case of GMs like Sam Hinkie, “it’s a process” may seem like a cop-out, but all promises come with a due date. In an attempt to time the ascent of the 76ers, Hinkie can build habits and forge a roster out of optimal contracts without the expectations of anything resembling success. He’s playing the long game, and if he can hypnotize the players, coaches, and fan base to play along, why shouldn’t he? It’s not a failure for a financial advisor to sacrifice current stability for long-term growth. Especially if his client is young and patient.

If there is a literary foil to “it’s a process” in the sporting world it’s The Cleveland Browns. The Browns have been punting on 2nd down since 1999. It’s just asking too much to commit to a struggle. So, fire the coach, fire the GM, draft another quarterback, switch defenses. The Browns exists in a perpetual state of entitlement, allowed to continue living the fantasy by the unending financial aid of the fan and the impatience of the ownership. It’s a depressing place to live.

-Tom

Nate Smith

Wow, you two. I thought I extrapolated a lot — and I even wrote an piece on the process. Before I get too wrapped up in telling you two not to take team-building models and slogans as being emblematic of what’s wrong with postmodern western society and the millennial generation, let me do something completely narcissistic and quote from a piece I wrote 15 months ago.

I keep talking about this ethereal concept of process. Is it some real Yoda-esque, pseudo-eastern philosophy mumbo-jumbo? Yes? No? Maybe? I’m simply talking about developing a way for people to strive for excellence in the moment on a daily basis, and to remember that the moments along the way — the journey — are possibly more important than the goal. I hate the term, “the right way.” Everyone talks about doing things “the right way.” I don’t believe that there’s a “right way,” for anything. There’s almost always a way to improve how a person or organization goes about things.

But a mental focus and consistency in the way one goes about finding out what works and improving upon it is what leads to 10-game “winning” streaks, developing a right handed jump shot, figuring out how to get nine-year-olds to listen, and learning how to cut to the bucket when the ball isn’t in your hands. The process requires a humility to know that your way of doing things can always be improved; trust in the people you work with to be honest with you and to work hard with you — enjoy their company; get up and work on it every day. I’m treading dangerously into upper management Tony Robbins B.S. here, and believe me, anyone whose worked with me knows this kind of life attitude is a daily struggle, and more wishful thinking than anything. But, I’m hoping that this attitude, while there’s no guarantee of making us “winners,” will make us better people, which, frankly, is more important than “winning.”

In reading that, I realize I’m channeling Robert Pirsig, of Zen and The Art of Motorcycle Maintenance fame. What Mac hates in the term, “it’s a process,” is the the emptiness of the term, and the way that, if you reference “the process,” results don’t matter. Tom, you seem to see it as a cure for what ails millennials. The truth, as always, is somewhere in the middle. First, let me tell you, Tom, that kids with a sense of entitlement and a perceived inability to work their way up to achieve their pie-in-the-sky goals is nothing new. It’s as old as people bitching about them. We’re a little bit spoiled in this country, having grown our population from waves of desperate, starry eyed, and exiled individualists who came to this country, stole land from the natives — and established a thriving middle class, all to see it dashed and then resurrected through the sacrifices and hardscrabble work of “The Greatest Generation.” Trust me. Some of these kids will figure it out. Some won’t. We’ll get through it. I mean the baby boomers ran up the biggest deficit and debts in the history of the world, and then wanted their taxes lowered, so the sense of “entitlement” has been around for a while, and we’re all still here.

But I mentioned Pirsig. I could post ZATAMM quotes for hours, but I think this might be a little of what you and I are talking about, Tom.

“What moves the Greek warrior to deeds of heroism,” Kitto comments, “is not a sense of duty as we understand it… duty towards others: it is rather duty towards himself. He strives after that which we translate ‘virtue’ but is in Greek areté, ‘excellence’ — we shall have much to say about areté. It runs through Greek life.”
There, Phædrus thinks, is a definition of Quality that had existed a thousand years before the dialecticians ever thought to put it to word-traps…

Quality! Virtue! Dharma! That is what the Sophists were teaching! Not ethical relativism. Not pristine “virtue.” But areté. Excellence. Dharma! Before the Church of Reason. Before substance. Before form. Before mind and matter. Before dialectic itself. Quality had been absolute. Those first teachers of the Western world were teaching Quality

Mac has an inescapable point, though. Quality… process: it’s very easy to delude people and one’s self with those ideals. Results matter. For all that Greek areté, they became slaves to the Romans, and what the Rockets figured out, and the Heat, Lakers, Celtics, Bulls, before them, is that you you can have all the process you want, and it won’t matter if you don’t have a LeBron James, James Harden, Shaquile O’Neal, Kevin Garnett, or Michael Jordan. The history of the NBA is dominated by the Great Man Theory. But if there’s anything in the ESPN article that spawned this conversation that rings true to me, it’s this.

NBA title contention, for all its elusiveness, is depressingly simple. You need stars. In a five-on-five sport governed by salary caps, max contracts and rookie wage scales, the biggest talents double as both the biggest difference makers and biggest bargains. FiveThirtyEight found that of the past 40 teams to make the Finals, their No. 1 player, on average, ranked in the 96th percentile in statistical plus/minus. The No. 2 player was 90th percentile; the No. 3, 79th. The real question is how to acquire them.

In the summer of 2012, with Philly’s then-president, Rod Thorn, acting as general manager, the new ownership identified two organizational models, Sixers executives tell me. The first was the approach of the Spurs and Thunder, franchises renowned for developing players and internal basketball culture. The other was the method used by 
the Celtics and Rockets, franchises renowned for command of the NBA’s arcane CBA and analytics. For the latter approach, [Sam] Hinkie — whom Morey had made the NBA’s youngest VP in 2007 at age 29 — fit the bill.

Now the first paragraph rings true the second, I believe, is mostly wishful thinking. If you don’t think the Spurs use analytyics and player development, you’re not too bight. Most smart teams are using both of these methods But what the three of us have been talking around, when it comes to the Sixers is this: yes, there is a process, but the desired results of that process may not be what you think they should be. It’s my opinion, and I’m guessing Mac’s too, that the Sixers goal is not to win, not to eventually use those assets to draft or acquire a “star,” not to deliver their fans a palatable product — the goal is to turn a profit. Everything else is secondary. And that is the difference between the Sixers and other NBA teams that stink.

The Lakers want to win. If they wanted to simply turn a profit, they’d have slashed payroll and enjoyed the monetary fruits of the most lucrative local TV deal in the history of the NBA. The same could be said of the Knicks. I respect their deck clearing this year, because if you’re going to stink, you might as well stink with players that don’t cost an arm and a leg. Of course, I also think that Phil Jackson is a hard-headed curmudgeon who thinks that he can just shoehorn guys into a triangle offense and apply his 90s and aughts basketball philosophies into the 2015 pick-and-roll, drive-and-kick NBA. The Lakers and Knicks won’t be bad forever, and they’ll use their large market status to eventually lure some stars and make some playoff runs.

Anyway, the problem with the Sixers, as we noted in the original comment section conversation about them, is the free rider problem. If every team that didn’t feel they had a chance to win a championship acted like the Sixers and just fielded a roster of D-League players, the NBA would suffer as a whole. Games between the Hornets and Kings would be even more unwatchable. The gap between good teams and bad would be that much more. The TV deals, the well from which all NBA life springs, are predicated on the premise that the NBA is going to consistently offer a compelling product. Why should consistently competitive teams like the Spurs and Mavs have to give these guys an equal share of the national TV money when the Sixers don’t even seem like they’re trying to field a team that could beat Kentucky?

And the issue with the 76ers isn’t analytics. Analytics, despite what Charles Barkley says, isn’t a problem in the NBA. Yes, as Barkley noted, the Rockets got better by getting better players, but it’s how they got those better players that makes them special. Daryl Morey’s analytic methods allowed him to develop draft acumen that let the Rockets rebuild unbelievably quickly after they lost franchise centerpiece, Yao Ming (whose forced retirement was one of the great career tragedies in NBA history). Morey was able to use analytics, smart drafting, and smart trades to consistently pick up undervalued players, develop them and trade them for more draft picks/undervalued players, and rinse and repeat that process. While never posting a losing record. It’s the last part of this equation that is lost on both the Charles Barkley defenders and the Philadelphia defenders of the world. You can be smart and you can win at the same time. Just a few examples of some of the things Morey has done:

• A History of fantastic draft picks the highest of which was 12th: Aaron Brooks (26), Karl Landry (31), Luis Scola (trade), Chase Budinger (44), Joey Dorsey (33), Patrick Patterson (14), Marcus Morris (14), Montejunas (trade, 20), Chandler Parsons (38!), Jeremy Lamb (12), Terrence Jones (18), and Isaiah Canaan (34). Of the approximately draft picks that the Rockets kept for themselves since 2007, only five are out of the league, and three of those five are second rounders. Only Clint Capela and Royce White are busted first rounders. Clint was a numbers game sacrifice this year (love to see him in Cavs camp next year) and White was a shoot for the moon gamble that didn’t pay off because he couldn’t overcome his mental health issues. That record is amazing.
• Plugged low level and mid-level free agents and trade targets into holes and found the best way to use them… or move them: Chuck Hayes, Von Wafer, Jordan Hill, Brad Miller, Jeremy Lin, Omer Asik…
• Pulled off one of the greatest four quarters for a dollar trades in NBA history, trading Kevin Martin, Jeremy Lamb, two first rounders, and a second rounder for James Harden.

Daryl Morey proved you can improve while rebuilding in NBA no man’s land. He exemplifies process, areté, Pirsig’s “Quality.” He took a team that just barely missed or made the playoffs and has turned them into a legitimate contender. This is as opposed to Hinkie who has made an art form of trading players for draft picks and turning those draft picks into cash while Apollo Global Management and Josh Harris wait for the team to appreciate and collect that TV revenue. Hinkie, knowingly or not, is running a high end used car lot.

Respond with quality, gentlemen.

-Nate

Click Here for Part II