Crisis Management Lessons from the NBA / China Dispute

A core principle of effective crisis response is the ability to learn from others’ mistakes without having to experience the pain of those mistakes directly to learn the lesson. The National Basketball Association (NBA)’s (mis)handling of a recent dispute with the Chinese government is a reminder of two valuable evergreen lessons in effective crisis management.

What happened

The dispute began over a tweet posted on October 4 by NBA employee Daryl Morey, general manager for the Houston Rockets, on his personal account. The tweet was in support of protesters in Hong Kong who have been demonstrating for months, at times violently, against the Chinese government’s attempt to assert greater authority in the region in the form of an unprecedented extradition law. Morey deleted the tweet shortly after it was posted and after the Chinese consulate in Houston released a statement condemning the tweet, urging the Rockets to ‘take immediate concrete measures to eliminate the adverse impact’ of the tweet, including the Chinese government cancelling broadcasts of NBA preseason games in the weeks ahead.

China is a major revenue source for the NBA with an audience of about 800 million tuning in to watch NBA games every season. Complicating matters, the tweet in question was posted days before NBA teams the Los Angeles Lakers and Brooklyn Nets were to arrive in China for a preseason game. Complicating matters further, the U.S. and China are in the throes of an acrimonious trade war.

The NBA’s conflicted response included an initial statement from the league calling Morey’s tweet ‘regrettable’ and expressing respect for China’s culture,  followed by another statement from NBA commissioner Adam Silver that struck a similar down-the-middle tone. Ultimately, the Lakers and Nets played the preseason game in China, although postgame media interviews with players and coaches were restricted. In the days since, the NBA has been the subject of criticism from politicians and fans alike.

What can be learned

The below lessons can be taken from what the NBA and its leaders have learned the hard way so the rest of us don’t have to:

1. Foresee the foreseeable and plan accordingly. It is impossible to predict the specifics of how a crisis will unfold. It is possible however to anticipate, in general terms, existential threats and prepare for them while time allows. In the case of the NBA, and all organizations that do business with China, this means 1) recognizing China’s demonstrated history of using its market power (typically by threatening to or actually withholding market access) to get business partners to acquiesce to its demands and 2) preparing for if and when that happens. Mercedes Benz, Delta Airlines, the Gap, and Zara are just a few companies that already know firsthand how China reacts when offended. Any organization in business with China can anticipate (and therefore should plan accordingly) how the Chinese government will likely react if and when it disagrees, which happens with some regularity. Given the magnitude of its business relationship with China and China’s track record of attacking businesses with which it takes offense, the consequences of NBA’s lack of preparation for a foreseeable threat is a warning to all organizations.

 

2. Be prepared to act on stated values. One of the biggest criticisms of the NBA over its handling of the Morey tweet has been the perceived inconsistency between the organization’s stated and lived values. Commissioner Silver noted in his second statement that, ‘Values of equality, respect and freedom of expression have long defined the NBA — and will continue to do so’. Yet the league’s initial and following tepid responses suggest otherwise. Leaders would be wise to revisit their organizations’ values or mission statements, and seriously consider if those are values the organization is prepared to enforce. If not, time for a revision. After all, it is less bad to reset an expectation (i.e. revise a stated value if unable or unwilling to act on it) than to fail to meet it altogether (i.e. proclaim to support a value then not act in accordance when challenged or expected to).