Suns owner Robert Sarver has been a trailblazer in his life on more than one occasion; a true son of the west. Sarver founded and managed Arizona National Bank when he was just 23 years old, managing it so well that it was purchased by Zions Bancorporation in 1994. Zions was recently valued at just over $4B by Forbes, so I’m willing to bet that Sarver made out ok on that deal. Since that time, Sarver has been involved with several companies and charities at the executive or board level that range from airlines, home builders, and other banks. Robert Sarver appears to be an extremely confident and successful business man, all qualities that will serve him well as he attempts to turn around his most prized asset. However, what all Suns fans should be hoping for is that Sarver is an excellent historian because there is a blueprint for corporate turnarounds that could serve him well. One only has to take a look at the corner near their home, or the next corner, the corner near work, their grocery store, the airport, the zoo, I mean Starbucks is everywhere!
Starbucks and several other large companies have a blueprint for how to achieve a turnaround in a relatively small amount of time. The parallel between leadership is also very strong, Howard Schultz, SBUX CEO is very passionate and caring about the company and it is obvious when you hear him speak. Sarver is also a passionate leader; growing up in Arizona he has a strong emotional connection to Arizona’s first professional franchise. On his official bio page it mentions that he attended his first Suns game when he was eight.
Many companies have found their way to camp turnaround after a period of sustained success that leads to over expansion or some sort of misguided ambition. The reason companies have found themselves here is usually because everything else they have been doing has worked so they can lose the fear of failure. At one point Starbucks had stated a goal to have as many stores as McDonalds, SBUX had experienced so much success with each store they had opened; it never occurred to them that this goal was unnecessary and unrealistic. The Suns version of this strategy is bringing in accomplished NBA veterans through free agency. The biggest example of this working is Steve Nash. It has to be noted that the Suns drafted Steve Nash but, traded away the Canadian sensation to Dallas early in his career due to the Suns being overloaded at the point guard position. After six years in Dallas, Nash proved he was one of the best point guards in the league and the Suns signed him as an unrestricted free agent. A fantastic level of success followed, including two league MVP awards for Nash and multiple division titles for the franchise. The Suns then continued down their road of “over expansion” in the form of signing free agent players that don’t live up to expectations. A small list includes Shaquille O’Neal, Vince Carter, and Michael Beasley. The Michael Beasley decision has worked out so poorly, many think it will cause Suns GM, Lance Blanks, to lose his job. Repeatedly bringing in these players who are either past their prime or chronic underachievers is a direct result of the Suns thinking they could catch lighting in a bottle twice.
I listened to some of the interviews Howard Shultz gave during and after his successful turnaround at Starbucks. Schultz gave some great advice that Sarver can use right away, he instructed everyone on his leadership team to look in the mirror an accept responsibility for the current situation that Starbucks was in, even going as far as admitting to the self induced mistakes to the employees of the company. Sarver can replicate this via a full page ad in the Arizona Republic; the ad should contain an apology and a clear plan for the future. Significant cost cutting and a change of management are also stalwarts of a corporate turnaround. SBUX cut $581M of cost during the first two years of Schultz’s return, see the Suns trade of Steve Nash to the Lakers. In exchange for Nash, the Suns received $3M and four future draft picks. Draft picks are great way to bring in young talent for a relatively cheap price and more importantly a great way to change your culture. Besides the $3M they receive from the trade, more importantly they save the money they no longer have to pay Steve Nash.
The change in management has been swift and purposeful. Sarver went from old to young, firing Alvin Gentry who has been involved in the NBA for more than 30 years. Lindsey Hunter, whose last year in the NBA was just in 2010, was named interim head coach; it’s believed that he has a chance to win the job on a permanent basis. Before moving to the head coaching position, Hunter was in charge of player development. Player development is a newly formed department that is charged with developing the existing talent on the team. Sarver has decided to go with a young energetic manager who specializes in molding young talent. The draft picks that the Suns received from the Lakers should put the Suns in a great position of having a roster full of young moldable talent. This move also caused the Suns to lose Dan Majerle and Elston Turner, two talented managers but from the old regime. Sarver has had nothing but great things to say about both men, but his commitment to change has been clear.
Sarver began this process with the trade of Steve Nash; the firing of Alvin Gentry indicates that the turnaround effort is now in full swing. Most corporate remakes can take anywhere from two to five years, not Surprisingly Starbucks was closer to two. They say that imitation is the sincerest form of flattery, for Suns fans let us hope that Sarver can make Shultz blush.