The NBA has a major problem stemming from claims an ex-referee has made about biased calls. If it is smart, it will take proactive steps to save its reputation now.

Like many people, I was surprised to hear the news that a disgraced former NBA referee, Tim Donaghy, alleges that Game Six of the 2002 Western Conference Finals between the Lakers and the Kings was tilted the Lakers' way by the refs.

Now, I happened to live in Sacramento at that time. I watched that game. I didn't like that my team lost and I really didn't like some of the calls. But I also knew that I was not entirely unbiased. "Fan," after all, is short for "fanatic."

I have no way of knowing whether ex-referee Donaghy's allegations are true, but I do know that the NBA has a real problem on its hands that it better get a handle on pronto.

The NBA has a fantastic brand, one that is the envy of businesses large and small alike. It has sponsorship relationships with companies like Federal Express ( FDX) and McDonald's ( MCD). It has loyal customers and a global market.

And it also has a big perception problem.

One poll I saw indicated that 60% of NBA fans thought that this allegation by Donaghy is "just the tip of the iceberg." That is bad news.

What's the Fix?

So what is the NBA to do?

It needs to do what any business should do when things go unexpectedly wrong, namely something I call "Business Jujitsu."

Jujitsu is a Japanese martial art wherein, when assaulted, one absorbs the attack and converts that energy to something positive. That's the idea here.

When things in business go wrong, the initial reaction for most people is to deny there is a problem. It's a natural reaction, and seems to be the one of NBA commissioner David Stern.

But it is also the wrong reaction, grasshopper.

Business Jujitsu requires that you face the problem head on, learn from it and thereby use it to your advantage.

For example, back in 1982, someone laced bottles of Tylenol in stores with cyanide, resulting in several deaths. The executives at Tylenol had several courses of action available to them at the beginning of their corporate crisis:

1. They could blame others.
2. They could obfuscate.
3. They could take responsibility.

Not only did they choose No. 3, they did so in a Business Jujitsu way: They voluntarily recalled all Tylenol from all over the country, and before putting it back on the shelves, they invented tamper-proof caps. They also proactively told consumers they would only put the product back on the shelves when they themselves were 100% sure it could be made safe.

By doing so, they saved their brand.

Conversely, let's think about Enron (but not for long, please). When that company faced a crisis, it did the opposite. It hid the ball (and the books). It denied wrongdoing. And it went out of business.

It is an important lesson for anyone in business. When faced with a crisis, especially one that involves public relations, avoid the temptation to be defensive. Instead, be offensive. Tackle the problem head on. Don't deny, admit. Do more than what is required. Use the power of the problem to your advantage. Jujitsu it.

By doing so, you will be giving yourself the best chance to turn things around.

Now, if only we could replay Game Six!

Steven D. Strauss is a lawyer, author and USA TODAY columnist. His latest book is the Small Business Bible. He has spoken around the world about entrepreneurship, including at the United Nations, and has been seen on CNN, CNBC, MSNBC, The O?Reilly Factor, and many other television and radio shows. He maintains a Website at

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