When 29-year-old Susan O'Malley took over as president of the NBA's Washington Bullets in 1991, she made history, becoming the first female president of a professional sports franchise.
It didn't take long for her to realize she had her work cut out for her; the team—now the Wizards—was at the bottom of the league in ticket sales, sponsorships, and wins.
"We had 36% of our customers bail out every year," O'Malley told more than 450 business leaders at CBIA's 2018 Annual Meeting Nov. 8 in Hartford.
"We would spend our whole summer trying to refill seats rather than adding new customers."
But by the end of her first season, the Bullets had seen the largest ticket revenue increase in league history to that point and achieved their highest season ticket renewal rate.
How did O'Malley turn things around?
She changed the culture of the organization.
"I think the most important thing in leadership is to set a culture," she said. "I think that's what leaders do.
"We clearly needed a culture change. I thought, I'm going to take some of the things my parents taught me, and I'm going to change the culture here at the Bullets."
O'Malley's Six Rules for Culture Change
"There are six things I did to change the culture," O'Malley said.
The first one, surprisingly mundane, caught attendees a little off guard.
"Rule one, make your bed every day," she said, which was met with dead silence from the audience.
"I know, kind of a letdown isn't it," she responded, to loud laughter.
I think that's our obligation as leaders, to keep working on our craft.
As she got older, however, O'Malley realized the wisdom of the simple edict.
"First off, motion creates motion," she said. "Get up and start accomplishing things. And the other thing is, if you don't do the small things right, how are you ever going to get the big things right?
"And my mother used to say, if you've had a terrible, awful day, at least you come home to a freshly made bed."
Always Keep Working on Your Craft
O'Malley's second rule for culture change was brought home to her in the late 1990s, when the Bullets were in the old Boston Garden for a game with the Celtics.
"I went and sat on the visitor's bench," she said. "We're almost two hours before game time, and there's one guy on the floor. Larry Bird.
"He is methodically getting ready for the game. He's doing sprints, he's practicing shooting. They used to talk about his lucky spot on the parquet floor, but there was nothing lucky about that spot. That guy must have taken 50 shots from that spot."
O'Malley observed that only about 20 minutes before game time, Bird noticed Celtics center Robert Parish walk onto the court in street clothes.
Bird, she noted, grabbed Parish by the coat lapels and said, "Man, you're taking it for granted. It doesn't matter that we're just playing the Bullets tonight. You gotta work hard every night at what you do."
At the time, O'Malley said, Bird had championship rings, was a seven-time all-star and an MVP, and yet "he's still putting in full effort working on his craft."
"I think that's our obligation as leaders, to keep working on our craft."
Take Time to Set Expectations
In explaining her third rule, O'Malley described a time when she started hiring interns to work for the Bullets; no other NBA team had ever done it.
"We needed more hands on deck, boots on the ground," she said. "So we came up with this scheme to get college kids to come in to help us out. We got kids from all over the country who took a semester off to come to D.C. to work for an NBA franchise. It was awesome."
In a game versus the New Jersey Nets, so few people were in attendance that O'Malley could clearly hear one of her newly hired interns, James, cheering. The problem was, he was cheering for the Nets.
"I was hopping mad," she said, but she decided to deal with James the next day.
"James is walking by my office, and I call him in," recalled O'Malley. "He was so excited [because] he thought, 'The president knows my name!' He should have thought, 'Why does she know my name?'"
You always assume people know what you want, and they don't. You have to be clear in your message.
"Oh, that's right, James," she continued sarcastically. "They don't have any internships—and neither do you."
After a few gasps rippled through the audience, O'Malley explained that James apologized and said nobody told him he had to cheer for the Bullets.
"James had a point," she said. "I had not set expectations. So I put together a memo immediately: 13 expectations for survival for interns. Expectation 13: You will always cheer for the home team.
"James taught me a tough lesson. You always assume people know what you want, and they don't. You have to be clear in your message as a leader."
When You Mess Up, Make It Right
O'Malley's fourth rule seems obvious but is often overlooked.
"I think people understand that we're going to goof up," she said, but "people want to know how far you're going to go to make it right."
Referring to the Bullets' lousy season-ticket renewal rate when she became president, she noted that if they had just taken care of their customers, the ticket holders would have come back.
O'Malley turned things around, not by lowering ticket or beer prices, but by making Bullets season-ticket holders feel wanted.
"We did all kinds of focus groups, but the one thing [customers] said the most was that the only time we ever hear from [the Bullets] is when the bill is due. We never feel like we're important to them."
In response, O'Malley began a program where she and seven of her direct reports would each call a customer every day, thank them for their business, and ask if there was anything the organization could do better.
That's all you want from people. You get that they screw up, but what will they do to make it right?
O'Malley said she also learned a valuable lesson about taking care of customers from a local florist when she attempted to send her mother flowers every Monday for a year.
Her mother was not receiving the flowers, and after repeated calls, O'Malley learned that they had been going to the wrong address.
To make things right, the owner of the florist delivered the flowers himself and apologized to her mother for the mistake.
"I thought, he's the epitome of rule four, when you mess up, how far we go to make it right. He got in his personal car, he delivered the flowers, and he apologized to my mother.
"That's all you want from people. You get that they screw up, but what will they do to make it right?"
"This is research-based: happy people are more productive," O'Malley told attendees. "It's our job to set that culture."
As an example of how powerful a concept that is, O'Malley recalled when Jim Schoenfeld, then head coach of the NHL's Washington Capitals, responded to his team's losing streak by taking the players bowling in Arlington, Virginia, after a brutal 7–0 loss.
The Caps won the next three games, and when, after the first and second wins, a reporter asked Schoenfeld about the bowling, O'Malley recalled the coach's reply: "We were practicing," he said.
After the third win, the reporter brought up the bowling again, this time asking Schoenfeld what exactly it was they were practicing.
Happy people are more productive. It's our job to set that culture.
"We ended up going to the Stanley Cup finals that year," added O'Malley, and even though the Caps lost to Detroit, "I always think to myself, that season turned on a bowling alley in Arlington, Virginia."
People Make the Difference
For her sixth and final rule of culture change, O'Malley reminded business leaders to surround themselves with strong people.
"Don't be intimidated by that," she said.
"The stronger the team, the better you are.
"I think that's how you make your team a winning team.
"You find a lot of competitors, and you inspire them to go out and want to win every night."