The virtues of getting your butt kicked: Barack Obama’s basketball game

Michael Lewis covers a lot of ground in his October Vanity Fair profile of Barack Obama, from Congressional gridlock to nuclear reactor meltdowns to a downed F-15 over Libya. But the heart of Lewis’ piece is the President’s regular basketball game. The other guys on the court – everyone but Obama – are former college players. They’re tall and fast. Most are twenty years younger than Obama.

As a player on the other team, who must have outweighed Obama by a hundred pounds, backed the president of the United States down and knocked the crap out of him, all for the sake of a single layup, I leaned over to the former Florida State point guard.

“No one seems to be taking it easy on him,” I said.

“If you take it easy on him, you’re not invited back,” he explained.

It turns out that Obama, despite his age and his lack of competitive college (or even high school) hoops experience, is good enough to be useful to his team, passing well and playing smart.

But what’s really remarkable to me is the game itself. This is a guy, as Lewis puts it, who could “find a perfectly respectable game with his equals in which he could shoot and score and star.” Instead, Obama seeks out this “ridiculously challenging” game. He goes out of his way to surround himself with people he knows can outplay, out-hustle, and out-muscle him. The president is extremely competitive, and he plays to win, but he also wants to be pushed and stretched and challenged.

A players hire A+ players, as the saying goes, and B players hire C players.

And people who consistently exercise great leadership know that you only get better when you stretch and take risks, and that building great teams is as much about surrounding yourself with people who are really good at what they do – even better than you – as it is about whatever talent and drive you might bring to the table.

(White House photo via Creative Commons)

Jacob Smith is the co-author of The Nimble Nonprofit: An Unconventional Guide to Sustaining and Growing Your Nonprofit, the former mayor of Golden, Colorado, and a nonprofit consultant.

Risk tolerance and recklessness among nonprofits

TechCrunch posted an Andy Rachleff piece a couple of weeks ago on the odds that an angel investor or venture capital investor will make money. The conclusion: pretty darned unlikely.

The vast majority of venture capital funds, for instance, either barely break even or actually lose money.

Why does this matter to nonprofits?

The “what can nonprofits learn from technology startups” theme has picked up steam in recent years in concert with the current technology startup boom, and is regularly a topic on this blog (see, for example, our recent exchange with Jon Stahl: “Should grantmakers be more like VCs” and “Should grantmakers act more like venture capitalists?“).

A grantmaking investment model that assumes an 80% failure rate among grantees may not be our best option. What I find most interesting about the Rachleff piece, however, and potentially most useful in the social sector context, is the risk tolerance that permeates the private investment landscape. Even the most optimistic of the experienced investors know that most of their investments will fail. They are willing, to varying degrees, to invest in organizations each of which only has a small chance of succeeding.

Fostering a Nonprofit Culture of Risk-Tolerance

Fostering a culture that genuinely encourages and supports risk-taking, within organizations and between organizations and their funders, is a real weak spot among nonprofits. Doing this means that the price of a failed project can’t be very steep. It means that organizations and funders have to provide positive feedback for smart risk-taking. Claiming to support experimentation and risk-taking but penalizing people and organizations with experiments don’t work out as planned fosters a culture of risk-aversion, not risk-tolerance.

Risk-Tolerance Doesn’t Mean Reckless

Risk tolerance shouldn’t mean encouraging reckless gambles. In fact, a smart risk-oriented strategy will include explicit expectations: clearly identifying the assumptions underlying any particular risk, having a clear process or tool for explicitly testing those assumptions and learning from the experience regardless of the outcome, ensuring that effective feedback loops use this learning to improve strategy and execution.

Innovation – both the incremental and the huge-leap-forward varieties – require people and organizations to take risks, and that only happens in a significant way when the rewards for taking those risks are high enough and the penalties for failure are gentle enough.

Jacob Smith is the co-author of The Nimble Nonprofit: An Unconventional Guide to Sustaining and Growing Your Nonprofit, the former mayor of Golden, Colorado, and a nonprofit consultant.