Live, from New York, A Cautionary Tale

Friday, October 5, 2007

For this week’s entry, I go to the world of professional sports to remind us that leadership, culture, and the law can intersect with significant consequences. This past week, the jury in the Isiah Thomas sexual harassment case reached its verdict. It found Mr. Thomas, head coach of the New York Knicks NBA basketball team, guilty of sexually harassing the Knicks’ former senior vice president of marketing, Anucha Browne Sanders. It also found the New York Knicks corporation guilty of subjecting Ms. Browne Sanders to a hostile work environment, and specifically its President, James Dolan, guilty of retaliation. Mr. Thomas’ monetary fine – zero, the Knicks’ fine -- $8.6 million, Mr. Dolan’s fine -- $3 million.

This is a painful reminder that the law, through Title VII of the Civil Rights Act of 1964, holds leaders accountable for their culture, at least in the sense of not creating a hostile work environment. Given all the business books that flood the market touting the management and leadership practices that create successful companies, one would think this type of leadership philosophy would be unheard of in such a public organization as an NBA franchise, and one as storied as the New York Knicks. And as Selena Roberts of the New York Times points out in her article (“The Garden Needed a Warning Label”) this week, there is another sexual harassment case working its way through the legal system involving the New York Rangers, the NHL team, also under Mr. Dolan’s leadership.

From an organizational culture perspective, this is most disturbing to me because it is one thing to have incompetent leaders mishandling an organization and putting it and its employees at risk. It’s another thing to consciously manage your people in such a way that intimidation, secrets, and humiliation define the company’s culture. Given the testimony and verdict, it’s hard not to detect a degree of malevolence in Mr. Dolan’s leadership practices that goes against every management philosophy and ethics of human relations.

But why did it take a public trial and jury to hold Mr. Dolan accountable for his leadership practices? In some ways, this was a disaster waiting to happen. Charles Dolan, father of James Dolan, was the founder of HBO and is best known as the owner of Cablevision Systems Corporation, a large cable television operator in the New York City area, which also owns Madison Square Garden, Radio City Music Hall, the New York Knicks and New York Rangers. Wikipedia lists his estimated worth at 2.3 billon dollars. Though a public company, the Dolan family has essentially run Cablevision as a private company for most of its existence and should actually go private later this month. In 1999, Mr. Dolan gave his son responsibility for the Madison Square properties listed above. Given the strain between the two men that has been reported over the past few years, it wouldn’t be surprising to find out that the father deferred to the son when it came to decisions so as not to come across as a meddler. Add to this that both the Knicks and Rangers are basically franchises, albeit unusual ones, where the respective commissioners of both leagues, David Stern and Gary Bettman, also tend to defer to the team owners, and you end up with little oversight and even less accountability.

So the cautionary tale is that these dynamics that undermine accountability can easily cause those in positions of responsibility to turn a blind eye to such management and leadership practices, which eventually catch up to an organization, its leader, and its stakeholders. Though some in the New York press are saying that the verdict will not hurt Dolan’s career, I can’t help but think of the impact this will have on attracting and retaining talented people in these organizations. But talk about being naïve. I don’t think this is on Mr. Dolan’s mind. It just doesn’t fit in with this Greek tragedy.