Worth a Read: Basketball, Capitalism and Customers

Recent articles take the measure of players and corporate promises.

By Fred Reichheld

min read


This article originally appeard on LinkedIn. In this strange pandemic year, Mr. October is as likely to be a basketball player as a baseball slugger. And as the NBA, sequestered in Orlando, marches toward the conclusion of its most unusual season, LeBron James is doing his level best to earn the honor. But basketball is, of course, a team sport, and in “Alex Caruso: The LeBron of Playing with LeBron” Ben Cohen of The Wall Street Journal focuses on an interesting metric called “net rating.” Net rating is a team’s point differential per 100 possessions, and it has averaged +7.2 for NBA champions over the last two decades. When James and Caruso play together, however, the Los Angeles Lakers’ net rating jumps to +18.6 points. Other players have helped LeBron raise his game, but none as much as Caruso. Dwyane Wade comes closest. In 2013, the Miami Heat had a +14.4 rating when both Wade and James were on the floor. This is a similar statistic to “points plus/minus,” which tallies the points scored by a team, minus opponent points scored, when a certain player is on the floor. Some time back, I wrote a piece (“What’s in a Name?”) about the similarities between this metric and the Net Promoter Score. Companies that brighten customers’ lives create promoters. Think of those as the equivalent of points for. Those that fail to satisfy customers create detractors, or points against. When your team is clicking, your customers are happy, and your NPS should be climbing. This article about the great pairing of LeBron James and Alex Caruso made me realize that for companies tracking which employees touch a customer’s experience, along with that customer’s NPS, you can identify which employees team the most effectively to create promoters. For example, which oncologist and radiologist pair up to create the happiest patients, or which airline flight crew chief pairs best with each pilot. Today, technology systems help us obsess over productivity and cost, but with sophisticated NPS tracking, firms can also obsess over customer happiness. On another topic, two weeks ago I made a pitch for customers as the one stakeholder who can speak for all. Shareholder capitalism has remained in the news since. Its rise is a response in part to disenchantment with the way that putting corporations’ primary focus on shareholders has played out, and seems to be connected to some deep shifts. New U.S. research conducted by Gallup finds that for the first time in a decade, Democrats have a more positive image of socialism than they do of capitalism. It’s not that the attitudes toward socialism have changed—those are holding steady—it’s that only 47% of Democrats reported a positive attitude toward capitalism. Capitalism took a particularly deep downturn with people 18 to 29 years old. Among Republicans and Republican-leaning Independents, however, it retains strong support. In “Stakeholder Capitalism Gets a Report Card. It’s Not Good.”, Peter S. Goodman of The New York Times covers a study of the 181 signatories of the Business Roundtable’s statement of corporate purpose that embraces a broad set of stakeholders. Since signing last year, these companies, the study finds, have “done no better than other companies in protecting jobs, labor rights and workplace safety during the pandemic, while failing to distinguish themselves in pursuit of racial and gender equality.” It’s only been one year and a tough one at that, but it will be important to keep a close eye on this commitment and whether performance improves.

This article originally appeard on LinkedIn.

In this strange pandemic year, Mr. October is as likely to be a basketball player as a baseball slugger. And as the NBA, sequestered in Orlando, marches toward the conclusion of its most unusual season, LeBron James is doing his level best to earn the honor.

But basketball is, of course, a team sport, and in “Alex Caruso: The LeBron of Playing with LeBron” Ben Cohen of The Wall Street Journal focuses on an interesting metric called “net rating.” Net rating is a team’s point differential per 100 possessions, and it has averaged +7.2 for NBA champions over the last two decades. When James and Caruso play together, however, the Los Angeles Lakers’ net rating jumps to +18.6 points. Other players have helped LeBron raise his game, but none as much as Caruso. Dwyane Wade comes closest. In 2013, the Miami Heat had a +14.4 rating when both Wade and James were on the floor.

This is a similar statistic to “points plus/minus,” which tallies the points scored by a team, minus opponent points scored, when a certain player is on the floor. Some time back, I wrote a piece (“What’s in a Name?”) about the similarities between this metric and the Net Promoter Score. Companies that brighten customers’ lives create promoters. Think of those as the equivalent of points for. Those that fail to satisfy customers create detractors, or points against. When your team is clicking, your customers are happy, and your NPS should be climbing.

This article about the great pairing of LeBron James and Alex Caruso made me realize that for companies tracking which employees touch a customer’s experience, along with that customer’s NPS, you can identify which employees team the most effectively to create promoters. For example, which oncologist and radiologist pair up to create the happiest patients, or which airline flight crew chief pairs best with each pilot. Today, technology systems help us obsess over productivity and cost, but with sophisticated NPS tracking, firms can also obsess over customer happiness.

On another topic, two weeks ago I made a pitch for customers as the one stakeholder who can speak for all. Shareholder capitalism has remained in the news since.

Its rise is a response in part to disenchantment with the way that putting corporations’ primary focus on shareholders has played out, and seems to be connected to some deep shifts. New U.S. research conducted by Gallup finds that for the first time in a decade, Democrats have a more positive image of socialism than they do of capitalism. It’s not that the attitudes toward socialism have changed—those are holding steady—it’s that only 47% of Democrats reported a positive attitude toward capitalism. Capitalism took a particularly deep downturn with people 18 to 29 years old. Among Republicans and Republican-leaning Independents, however, it retains strong support.

In “Stakeholder Capitalism Gets a Report Card. It’s Not Good.”, Peter S. Goodman of The New York Times covers a study of the 181 signatories of the Business Roundtable’s statement of corporate purpose that embraces a broad set of stakeholders. Since signing last year, these companies, the study finds, have “done no better than other companies in protecting jobs, labor rights and workplace safety during the pandemic, while failing to distinguish themselves in pursuit of racial and gender equality.” It’s only been one year and a tough one at that, but it will be important to keep a close eye on this commitment and whether performance improves.