Tuesday, May 15, 2012

Inventors Gone Wild: Krispy Kreme Donut Burger Trumps Texas-Size Cholesterol Catharsis  



Discovery consists of seeing what everybody has seen and thinking what nobody else has thought. - Albert von Szent-Gyorgyi


The Texas Rangers are playing great baseball, as of today, projected out to an 103-win season. That's an Alaska-sized pile 'o wins, but amazingly, the meme that munching Texas types this season is The Boomstick, a  24-inch hot dog with chili, cheese and jalapeños with an underlying slab of wood to carry the frelling thing. Unlike the team's front office & manager (relentlessly intelligent, elegantly designed to do the job), the Boomstick is the Anna Nicole Smith of comestibles, replacing pointless size and encapsulated self-destuctiveness in the name of "a good time". Still, it's actually not the scariest concession chatcka of the 21st century. That title belongs to...well, read this reprise and you'll know.


   Most inventions in baseball, in natural evolution, in life, in business, are failures. And that's okay, because inventors who fear failure fear invention, and that limits their effectiveness. To zero. Great inventions tend to be bold -- an essential element shared with the greatest belly-flops.
   Baseball though, as the U.S.' most evolved and highly sophisticated innovation-processing engine, has some good illustrations of the exxxtreme innovation as the managerial equivalent of spontaneous human combustion. This week's Invention Gone Wild: the fat bomb known as the Gateway Grizzlies' "Best Ball Park Hamburger". Hawkeyed Sean McNally at Baseball Think Factory pointed to an article on ESPN describing the concession offering for the East St. Louis Frontier League team. It's a concoction that blows away the scary 30 year reign of the Baltimore Memorial Stadium incumbent Baseball Concession Lord 'o Lard.
   I am going to tell you about the Grizzlies' extraordinary kulinary kookiness, but first a little about the de-throned incumbent. Memorial Stadium proffered the truly scary comestible...deep fried "burritos" A teammate of mine, Burly Betts, used to go the games with me and then would order & then actually eat one. A by-product was I couldn't go to the bathroom and give him my scorecard because it would get an Exxon Valdez-autograph-model grease slick on it that would render it write-proof, immune to both pencil and any kind of pen I had access to. Deep fried burritos were not just scary, but Edgar Allan Poe-scary, and something that would not be dislodged for the Chamber of Concession Horrors for decades to come.
   But now it has been usurped by the Grizzlies' Krakatoa O' Adiposity. According to the ESPN story:
Homer Simpson would love the newest taste sensation in minor league baseball: the donut burger.
   The Gateway Grizzlies of the Frontier League promised to create "Baseball's Best Burger" in time for the team's opener in late May. And they appear to have succeeded. The ballpark sandwich will include a hamburger topped with sharp cheddar cheese and two slices of bacon -- all between a "bun" made of a sliced Krispy Kreme Original Glazed donut. {SNIP}
   Calorie counters predict the monster will set you back about 1,000 calories and 45 grams of fat. {SNIP} (Grizzlies general manager Tony) Funderberg, who has said he has eaten at least 10 of the Grizzlies' new creations as part of a "sampling process," said the team hopes to sell 100 to 200 of them a night at $4.50 each. He calls it a bargain, considering it is a meal and a dessert in one.
   I'm not, as Dave Barry would say, making this up. For those of strong constitution, here's a pic.
LONG PERSONAL & ETHNOGRAPHIC ASIDE: I've never "gotten" the Krispy Kreme thing. I have always loved doughnuts, but the name of that brand alone scared the hell out of me -- the idea of eating anything called Kreme, something that seems assured to use as ingredients no actual food products but was probably intended for use as something like this, seems pretty sci-fi to me. ¿Worse, who wants their cream to be Krispy? What kow delivers krispy kreme? OTOH, back when I drove a Yellow Cab in the D.C. metro area, about the only Peacemaker a group of cabbies I worked with had was the local Krispy Kreme outlet. They were from all over (Biafra, Nigeria, Palestine, New Mexico, Pakistan, to name a few points of origin) and basically worked as zero-sum competitors even if they worked for the same company. Arguments would explode over lines and fares, politics, religion, the best way to get to the corner of N. Vermont St and N. Vermont St. -- yes a real corner guaranteed to fry the skulls of the poor sots who tried to ease the stress of the job by smoking reefer -- and whether the dispatchers were on the take. But one one unifying passion was the consumption of hot, fried fat, a comfort that soothed, and expanded, the savage breast of almost all hacks. The inescapable conclusion of 20th century cultural anthropology was that healthy societies survived by gathering and distributing protein; I guess there must now be a 21st century corollary: that other-than-healthy societies thrive by gathering and distributing fried fats.
   The Gateway Grizzlies play home games a mere 3½ miles from the Midwest's most pungent olfactory landmark, East St. Louis' Monsanto plant, normally a bad thing, but I'm thinking that in this context a positive -- they make (or used to, at least) make most of the aspirin used in the U.S. in that factory, and the grease-hangover headaches demand a gargantuan supply of analgesics.


BEYOND BASEBALL:   But the Grizzlies "Best Ballpark Burger" is as innovative as it is distasteful. It's originality factor is very high. It's a risky invention in that they aren't simply adding something you'd normally add, or tweaking one of the ingredients (remove catsup, add mustard, for example). It's bold, it's original...it's repulsive.
   In part, what makes it seem so repulsive is that it's a specific form of invention called an "intensification". Intensification is a primitive idea, an it can work. It's one of the simplest forms of invention, and it's easy to implement because it doesn't require creativity. Because of that non-requirement, it is the most common form of innovation. It just says "whatever we're doing that seems successful, let's just do more of it." So if customers think a two-blade razor shaves closer than a single blade, ¿why not three blades? And if you think your competitor will re-tool to make three-bladed shavers, preempt her by going to four blades. Automobiles' rear fins grew and got more ornate from 1957 (like this) to about 1962 (more complex like this) and even bigger through about 1964 and then stopped. Designers intensified what buyers wanted until the model failed and they were forced to invent a new look.
   This has worked both in the prepared and processed food industries over the last quarter century. Taken as a market, Americans love eating fat, and more is generally more popular. The percentage of American adult who are merely "overweight" by federal standards has been pretty consistent over the last 25 years, but every 12 years, an additional 9% of the adult population are building their bodies into a configuration defined as "obese" (that is, very overweight). If you are skeptical, take a look at this CDC chart that indicates two-thirds of American adults are overweight and three out of ten are obese.
   In general practice, intensification may make the product of invention more effective or not, but frequently consumers will feel like it did because it seems logical. If a ballpark cheeseburger satisfies because of its very high fat content, amplify the appeal point...throw on bacon (two slices please). And if the bacon cheeseburger maxes out the design possibilities for fat transmission, go straight for what ounce for ounce, is the third most potently concentrated source of fat I can think of: the glazed doughnut (a little under two ounces and roughly 12 grams of fat), not as scary as this one I ate this year.
   Inventors will go wild at times. The bolder the initiative, the greater risks they take and the greater likelihood of remarkable success they have. But when the kreme is krispy, the kuisine is kreepy and it can be either a kickstart to karmatic konsummation or a komplete klunker.

Monday, February 27, 2012

Avoiding Change Manglement, Ichiro-Style  

Observer effect: The act of observation changes
the object being observed

Like most normal people and baseball players, Ichiro Suzuki prefers to do things his own way. Like almost all successful baseball players, and like many (though not most) normal people, he is committed to his employer's success. And it looks like there's a big change coming in both how he will do things and in his employer's success.

It's the result of a many-year Change Management initiative that has been barely committed to over the years, sometimes desultorily, sometimes not at all, the luke-warmness of it created by or merely encouraged by executive ownership. That lack of commitment eroded the commitment of the Seattle Mariners' all-time most successful manager and ate the career of one other proven manager. That chronic lack of commitment, though, resulted in what I call Change Manglement...the act of changing only when the status quo has declined so severely that only a functional idiot committed to failure (or with an incentive that transcends what everyone else considers "success") would continue on the same path.

Ichiro Suzuki is a relentless seeker of excellence, and through an intense commitment to doing things his own way (even if that meant training 50% more than any other franchise player in the big leagues, and even if that meant politicking to get rid of anyone who wanted him to do things differently), he has had a long and successful career making continual small adjustments to a basic foundation to which he's committed. 

He hasn't changed because he's been a success in his own measures of what that means. For Suzuki, like most people, it's hard to balance a decision to change when the contributor has been a success in their own currency, but that currency is different from what makes the employer successful, either in its own currency, or that of customers. Measuring the same events using different currencies is one of the most significant blockages in getting contributors, employers and customers to achieve Change (because if one measures "accomplishment" using different currencies, the status quo may look "better" than the proposed change. 

HISTORY FOR THOSE WHO WANT IT (otherwise skip down to next section)
In his seven years as a regular in Japan, he led the league in batting average seven times, that is, every single season. In his first (adjustment) year in the Majors, he won the batting title. In his 4th year of play, as a 30 year old, he broke the all-time record for hits in a season (in 162 games, not the 154 games George Sisler had done it in) and most singles in a season (again, in more games than Wee Willie Keeler). He has been great at what he does, overrated in the outfield but still more than adequate there.

As a previous Mariner GM noted, it's great that Suzuki hits .340, but because his hits are so singles-centric, and because he doesn't walk much, his batting average alone overstates his true value as a lead-off batter. Again, when he can hit .330 and get on base at about a .375 clip and steal 40 bases a season while not getting caught stealing much, he's very useful, but not a super-star.

¿WHY DID CHANGE BECOME SO NECESSARY?
Over the previous few years, he had made small adjustments, getting just-enough better at dealing with the inside pitches that it encouraged pitchers to work the whole plate more he been surprisingly resistant to both radically altering his approach and the expected ravages of age.

But last year, his approach just tanked. Look at this comparison of 2011 against his previous output as measured in percentage of plate appearances.

Suzuki 1b 2b 3b HR BB+HBP K
2001-9 25.1% 3.4% 1.1% 1.2% 6.9% 9.0%
2011 21.4% 3.1% 0.4% 0.7% 5.4% 9.6%

Every single aspect of his game, from his sky-high production of singles, to his already lightweight production of walks, sagged markedly. It's not as though it left him one single tweak to focus on. While he has been resistant to changing his approach (going for more power as former manager Lou Piniella had requested, or for more walks and steals as former manager Mike Hargrove had hoped for), this was a collapse by any measure. And his relatively hollow .370 on-base percentage declining to 2011's .310 really made his desire to be a lead-off batter a hollow hope.

SO WHAT IS THE CHANGE?
As I've written about a few times, Ichiro has shown an extraordinary mastery of change in his career, adjusting to age, to changing continents, to the never-ending adaptations of pitchers and infielders to his game. But last week, he finally relented to the bigger changes he has been avoiding. According to this piece by the usually insightful Larry Stone:

Ichiro's style change is bigger news than his lineup change

At age 38 and moved to third in the batting order, Ichiro plans to evolve into more of a traditional gap hitter.

PEORIA, Ariz. — A quiet Mariners camp was riled up on Tuesday.

In his post-workout media session, Eric Wedge matter-of-factly dropped the blockbuster news he had been hinting at since the end of last season, with a couple of new twists. Turns out it was a three-parter:

Part one: Ichiro is no longer the leadoff hitter. Gasp.

Part two: Chone Figgins is. Whaaa?

Part three: Ichiro will hit third. Wow. {snip}

Ichiro, meanwhile, turned 38 last October, and now he will be asked to re-invent himself. And do so in the spot in the batting order many consider to be the most crucial — the one traditionally reserved for the team's best hitter. That has clearly been Ichiro in the past, but it was not Ichiro last year, when his "slap and run" style stopped being effective.

We are already seeing signs of what for him is a radical new approach. For one thing, in batting practice Ichiro has unveiled a much wider, and more balanced, stance. For another, he's not lifting his front leg, not perceptibly. His hands are lower. And, putting it all into action, he seems much more intent on scalding line drives than the slashing style of old.

"You can already see he's obviously made some adjustments this winter if you watch him take BP," Wedge said. "Ultimately, what I want him to do, I want him to make it his own. He's as smart a baseball player as we have in there. He understands the game very well. He understands what the responsibilities and priorities are with someone hitting third. I'm trusting in that. What he wants to do is what's best for the ballclub. That's what he's doing here.

"Any adjustment he's making is because there's good reason for it in his mind. I don't think he made any changes coming in here from a batting-stance standpoint with regards to just hitting third. I do know one thing: He's stronger. He knew this was an option, and I think he prepared for it."

Turns out that's exactly the case. Ichiro said he had been preparing himself mentally all winter for the possibility of hitting third. And he confirmed that he had also been working on changing his hitting style.

"I've been working on that stance the whole offseason, so that's not temporary," he said.

Asked why, he said, "To perform better. We all make changes, adjustments to perform better. That's the only reason."

Ichiro, to his credit, is saying all the right things about leaving leadoff, and Wedge stated emphatically: "He's on board. I was very clear with him, he was very clear with me. He's ready to go."

It is true that Ichiro actually played more games hitting third than first during his seven years in Japan, and won a batting title in all seven of those years. It is true that he dabbled in the three-hole during both of Japan's World Baseball Classic title runs. And it is true that every Mariners manager preceding Wedge — starting with Lou Piniella — toyed with the idea of hitting Ichiro third.

It is also true that Ichiro's identity as a major-league player outside of Japan — as a Mariner, in other words — has been inextricably linked to being a leadoff hitter.

In fact, in spring of 2001, when Piniella was contemplating Ichiro hitting third, Ichiro told the Seattle P-I, "I guess you could say I have the experience in the middle of the lineup. But I don't like it. When you look at major-league hitters, the picture of Ichiro isn't what comes to mind when you think of No. 3 hitters. I'm not a home-run hitter ... But if the manager says to do it, I will do it to the best of my ability."

Piniella eventually backed off on the idea (except for three games in 2002, during which Ichiro went 8 for 14 as the No. 3 hitter) as did all his other managers. But that was when Ichiro was cranking out 200 hits a year and hitting .300 annually, a trend that stopped at 184 and .272 last year.

To me, the change in Ichiro's approach is more interesting, and potentially more impactful, than the change in the Mariners' batting order. I think it's absolutely the right thing for him to do, regardless of where he hits in the lineup — the best way to regain his stature as a premier hitter. At his age, Ichiro is not going to get any faster, so an approach that has been so predicated on infield hits — more than 50 a season in his prime years, and up to a peak of 63 in 2001, when he took the league by storm — is not going to continue to be effective.

The first reaction, of course, is to say, "So why put a guy like that in three hole?" It's a legitimate question. But everyone has seen what Ichiro can do in batting practice when he swings from his heels. Drive after drive into the seats. His career numbers hitting in the clutch are excellent (.333 batting average/.436 on-base percentage/.411 slugging percentage with runners in scoring position in over 1,300 at-bats). And there has always been a sense that Ichiro can do what he wants with a bat, if he puts his mind to it.

Now, it seems, he is ready and willing to put his mind to being a more conventional hitter, one aiming for the gaps and not the hole at shortstop.

CHANGE IS PERSONAL, CHANGE IS ORGANISATIONAL
In baseball (where's it's obvious) and beyond (where most managers just don't get it), to create positive change, you need both to design organisational change (reassign job responsibilities, prune technological and workflow plaque, tweak or remake messages given internally and to customers and suppliers, to name a few key aspects), and re-shape individuals' behaviors.

In my own management practice, the first knowledge I try to document is how the organization defines "success" (that is, its currency or currencies). If the organization is not already successful on its own terms, a frequent major contributor is that either contributors don't share the same currency or internal incentive systems don't reinforce that currency -- or outright undermine it. For example, I was working with a publishing concern four years ago that had as a mission delivering online the most important and interesting informational details the readers wanted. Okay, but contributors were evaluated primarily on how closely they hewed to deadlines and the conformance of their grammar and punctuation to a style guide...all very worthwhile objectives, but very different from the mission. It's not surprising that the shop was pointlessly tense and the product a failure at its mission. No one was particularly happy with the results, but change (outside of contributor churn, something that would not affect the organization's success) was not on the menu. This doesn't exactly guarantee failure (contributors may choose to pursue the organization's mission if it's stated clearly, even if contributors get no praise or bonus for it -- but to succeed in this environment requires a great deal of luck or extraordinary hiring). (One of the smartest clients I've ever worked with wrote a how-to book on part of the currency issue and it's a very worthwhile first step if you need to get actionable ideas on turning a currency problem around,

So getting contributors' and the organization's currencies running at least parallel is an important first step. When Ichiro first came to the team, they were determined to get to the playoffs to justify the most expensive publicly-subsidized stadium ever built, and he was the catalyst achieving that. His currency was: being a batting average champion, being respected as a defender, notching 200 hits per season, helping the team achieve its mission.

Over time, the team mutated. As documented in Jon Wells' forthcoming book, Shipwrecked: A Peoples' History of the Seattle Mariners, executive management committed to an overriding single mission: achieving positive cash flow every year. While not all fans/customers share Wells' currency (winning titles), and while most MLB customers will settle for an adequate team that is entertaining and has entertaining, family-friendly diversions, close to zero customers share executive management's overriding single mission. After a few years of cash-flow success with lagging on-field performance, contributors, especially hyper-competitive ones like professional baseball players, tend to lose some sharpness. Not Suzuki: he just pursued his own currencies more doggedly, and because the team's fortunes were so lukewarm and winning titles became more apparently a back-burner objective, the front office and field management had less incentive to go toe-to-toe with the outfielder to get him to do what they wanted even if it wasn't exactly what he wanted...it wasn't close to making a difference between winning a World Series and having a mediocre record, so ¿why sweat it?

The Seattle Mariners team approaching the 2012 season is a different animal, though. The front office has apparently got executive management to consider a long-term plan for extended winning records, giving playing time to young players and hot prospects who, if they succeed, become very cost-effective, success-hungry contributors. 

It's a strategy that tends to produce interesting but losing teams in the present with a chance to contend in the future. Given that strategy, Ichiro's pre-eminent currencies are worth less to the team. Instead of "setting the table", he needs to "set the tone" of a team ethic. When the young players see even the self-centered star is willing to make major changes to help the team succeed, they are likely to pattern their own behavior after that trajectory, one that helps organizations succeed.

It helps, of course, that Suzuki had an historically awful season last year and that, competitive dude he is, that allows him to relax his jaws a little bit and release the radial long enough to give the field manager's Change initiative a try.

But a key part of this Change initiative is getting the contributors to buy in. It's not enough to have a clear stated mission, and to rework incentives. To achieve organisational change, the team has to get the individuals that make up the systems to change, too. Change is organisational, but change in personal, too, and without both, the odds of success are close to zero.

The M's new experiment will be fun to watch through its predictable downs and ups. And if you have enough courage and persistence to try this in your own organization (through reassigning job responsibilities, pruning technological and workflow plaque, tuning your incentive systems -- both explicit and tacit, tweaking or remaking messages given internally and to customers and suppliers, to name a few key aspects) you have a potent tool for revolutionizing your outcomes.

Baseball does this all the time. ¿Will you?


Monday, January 09, 2012

Art Imitates Life, but The NFL
Imitates Baseball  

Back in late 2009, I wrote about (then new) Detroit Lions Head coach Jim Schwartz & his Tampa Bay Devil Rays'-style project to remake the sad sack of the NFL, a team which had gone 0-16 before his tenure. This last weekend, that team not only made its way into the NFL playoffs (somewhat of an accomplishment) but acquitted itself most-genuinely in the game against a superior opponent, losing only in the last quarter. The Management by Baseball description of how Schwartz proposed to turn the team around is worth attending to, especially for managers trying to turn around failed companies or departments.

While pro football has some interesting life lessons, there tend to be few management insights you can apply generally to non-sport management. I don't write about football here, but there's a great reason to introduce my first entry in over five years that will have the NFL as a centrepiece, although as a beneficiary of baseball wisdom, not an originator thereof-like. Specifically, it's about managing Change, the ultimate destination, home plate, in the Management by Baseball model.

Last Sunday, the New York Times sports section had a Judy Battista feature on Detroit Lions coach Jim Schwartz' culture change project with the perennially struggling Detroit Lions whose long parade to the graveyard (seven consecutive losing seasons culminating in last season's 0-16 no-mulligan mulligan) he inherited. Schwartz, faced with reviewing the efforts and failures of so many predecessors, lifted a page out of recent Baseball management achievement and closely recreated (with a few environmentally-appropriate tweaks...back to that later) the ever-struggling Tampa Bay (Devil) Rays' last-to-first-to-Championship experiment that succeeded so well last year.

BASEBALL'S WINNING MODEL
The Devil Rays got new ownership and they were committed to changing not just the game on the field, but the entire organization, not by the contemporary More-With-Less Cult's nostrum of laying off people, having a loud, showy re-org, spraying around a few motivational posters and declaring the war won, only to collapse under the imbecility of their Hank Paulson-y all-posture-no-redesign sham.

As I wrote a few years ago here, Instead of cloning the failed American business model, the Devil Rays owners set out to methodically ask the staff who had been implementing the old management's failures what those staffers had suggested that'd been ignored and what ideas they had been swallowing rather than promoting. Combined with the solid business methods they'd brought in from other fields, they synthesized a "culture" that started winning on every off-the-field level. Then they hired the most fearlessly innovative pedal-to-the-metal field manager candidate anywhere, Joe Maddon, and let him loose to do the same things in the clubhouse and on the field.

Baseball is change incarnate -- and no other line of work on our continent combines such relentless accountability and "transparency" -- but this Rays effort was simply the most magnificent publicly visible and closely measurable change management success of the 21st century. It's no surprise a long-struggling organization (though with smart, committed ownership) in another endeavor would choose to learn from it.

¿WHY CAN'T FOOTBALL BE MORE LIKE BASEBALL? OH, IT CAN.
As Battista wrote (abridged here):

ALLEN PARK, Mich. — When Jim Schwartz, the new coach of the Detroit Lions, quoted Shakespeare on the day he made the rookie Matthew Stafford his starting quarterback, his choice of source material was painfully appropriate.

“Hamlet.” A tragedy. {SNIP}

Schwartz swears that nobody in his vast network of football friends told him he was crazy to take the Lions job; they said it was a great opportunity. Now that he is here, he feels a responsibility to field a team in which the economy-battered city can take pride. During minicamp, he even took top rookies to sign autographs at a truck assembly plant in Dearborn.

But Schwartz also knows there is nothing he can say, no billboard slogan persuasive enough, to change minds like edited-out fan} Mizgalski’s until the Lions win. Instead, Schwartz has changed just about everything else he could.

A new coaching staff was hired. Uniforms were redesigned. Weight machines were replaced by free weights. The locker room seating chart was rearranged. Parking spaces were assigned. The practice schedule was upended.

Schwartz is a student of the disciplined, methodical approach to coaching and personnel management. The objective is not to turn the Lions around, he said, but to improve every day, to lay the foundation for the long-term success he knew with Belichick and Fisher. The difference, Schwartz said, is like losing 10 pounds in two weeks with body wraps and Master Cleanse or by changing eating habits and running on the treadmill. {SNIP}

“From the time they walked in, they could never say this: ‘Same old stuff around here,’ ” Schwartz said after a recent practice. {SNIP}

The Lions have many qualities of successful franchises: a state-of-the-art practice facility and stadium; generous, hands-off ownership; passionate fans. But Millen’s misguided drafts left the team without the traditional building blocks of offensive and defensive linemen.

“Isn’t there a show on Food Network where they give you six ingredients and say, ‘Make something out of this?’ ” Schwartz said. “That is a little of what this is. In Tennessee, our system changed a little bit each year. But it was incremental. One or two new players would come in, and we’d say, ‘This fits us better this year.’ This is a huge melting pot here. That’s probably the most difficult thing — nobody was familiar with the terminology or the system because the system was developed here.”

NOTE: Schwartz didn't quite have the management luxury the buyers of the wretched Devil Rays did in that ownership wasn't turned over from disastrous failures who were so obvious, getting buy-in for change is made a little easier. But the Lions' 0-16 record last campaign was a statement no baseball team could even come close to, even the 1899 Cleveland Spiders.

BEYOND BASEBALL
A lot of suggestions between the Devil Rays' and the Lions' change initiatives. But what Schwartz got from Maddon and his Tampa co-implementors, was, if you have the opportunity, CHANGE AT LEAST EVERYTHING THAT IS VISIBLE & NOT UNSURPASSABLE. Make a clear splash that all the unquestioned behaviors of the past are now going to get questioned...maybe kept, but at least examined. Have no fear about trying something risky that might not work because you can't drop below where you started if you started in last place.

As I was writing this, the Lions, who had been 0-2 for the 2009 season, won their first game in 19 tries.

As I like to say about change management efforts committed to and that yield some results, There is Maddon to Their Methods.


Sunday, December 25, 2011

Jon Daniels - Part IV: Rangers' GM
Attacks a Diseconomy of Scale  

This is the final installment of the March, 2007 interview Jon Daniels did with me. He'd gotten his first G.M. job as the nexus of a team that had never gone to a World Series, and now with him in place, they've achieved enough excellence to get to two Series in a row.

This part deals with an issue more and more managers have to deal with in a globalized business world -- communicating effectively and keeping people on course and pulling together in a system where the work is distributed over more remote workplaces -- a Diseconomy of Scale that is both common and usually fatal.

And, btw, my arrogance knows few bounds...I suggested in this 2007 piece that it would be interesting to see how much difference his extremely bright approach would help achieve five years hence (that is, this season). I think I was pretty prescient, though DANIELS was he one with the focus, execution and relentlessness to bring the achievement home. He is to be congratulated again for both his leadership and his being such a great team-mate to his team-mates.

In Part III, Daniels explained how his first big initiative on getting the Texas Rangers' GM job was to push for better organizational cohesion through a couple of methods -- organization-wide meetings to integrate people who, while dependent on each other for success, didn't have opportunities to meet face to face, and personal notes to people on noteworthy occasions to reinforce their view of how the organization valued them.

NOTE: The first issue he addressed, face-to-face meetings, is a critical ingredient in large organizations and one, in a globalized world, is decreasingly present. From cohesion to clear communication to sharing of common mission/values, face-to-face interaction is close to indispensable for success, an issue I dependency on what I call "proximity". I won't elaborate on this here: I've written a lot about the failure to achieve Proximity and its costs here and here; I wrote an article recently for Redmond Magazine about the counter-example...how a creative software company, eProject, skillfully balances its choice to offshore some of its development against the need for Proximity.

He let me read one of the letters he was about to send out as an example.

{he let me take a minute to read the letter}

Jeff (MBB): I especially like the part where it says “Be creative, don’t hesitate to experiment”. You’ve worked outside of baseball, so you know how much more experimental baseball is than most lines of work. Business should be that way.

Jon Daniels (JD) : There’s no doubt about that. And even in Baseball, unless it’s really well-defined, explicit expectations, then people are hesitant.

A hypothetical example… you have a hitting coach in A ball. He’s got a top prospect there and you’ve been handed a program to use…these are our hitting drills and these are the things we do, and you have a prospect wh’s not responding. The coach knows he’s a top prospect, maybe he represents some top money, he’s in the Carolina or Midwest or the California League…kind of out on an island, and not connected to the big club. He’s thinking like “Yeah, yeah, these are the drills I’ve been given. I’m not going to mess with it. I’ve seen something, I’d like to try it, but I’m not going to be the one to stray from the program.

I’ve been encouraging these guys to try. I say, “you know our general belief system, you know what we’re about…don’t stray from that. But within the parameters defined, innovate. I say “You played this game a long time. You had a coach somewhere along the line who got through to you. What did that coach do? Are you trying those things? We hired you because you’re an intelligent guy – you’re not a robot. You want to try some new drills? Do it. You want to try something drastic? Call the farm director, call the coordinator. Let them know – let’s not get crazy, but at the same time, I’m going to hold you accountable if he doesn’t get better so if you’re seeing this isn’t working, he’s not responding…well, everybody responds to things differently.

One of the things I’ve really tried to drive home is don’t be afraid to try something different. I expect you to put your stamp on the organization.

MBB: “Everybody responds to something differently”. That’s another piece of consciousness that seems intrinsic to baseball but not so much beyond it – so much so in baseball, a lot of people take it for granted. But for someone managing a doughnut shop, for example, it should be the same principle. A manager of a customer service department, for example, might luck into a whole group of people who respond to the same practices and drills, but baseball knows a lot more about your principle than most lines of work.

I loved you making it explicit, too, in your letter. What kind of people do you send them to?

JD: This letter is going to everybody in the organization. The works.

It’s just a little thing to recognize we’re about to kick off this season. I try to personalize each one with a little note at the bottom, rather than just having copies.

And the message I’m stating is: everything we are facing is a competition – how are you going to help us win today. I want to empower them.

I haven’t been an area scout. When I talk with those guys, they think I’m joking, but I think I’d want to be an area scout one of these days… to me it’s one of the more exciting jobs in the game. Say you’re out in Idaho looking for players every day…you couldn’t be more removed from this thing. You might feel like “what am I really doing to help us win every day.” It’s the Fall, there’s no baseball going on…are you going to that basketball game, that football game, meeting that two-sport star. You can sit in the stands, hear what his friends are saying about him. That gives you and advantage…especially if you’re the only team there and there’s no Angels or Oakland scout there, you just beat them. So we’re really trying to empower these guys.

And we haven’t done it, but we’ve talked about a financial reward if a guy (you scouted) gets to the big leagues should that scout get something. During the draft a scout is going to fight for his guy over someone else, they all are; would it make sense to have the whole scouting department get something if you get a guy up to the Big Leagues. And how about development? We haven’t done anything there yet but we’re trying.

MBB: Have you heard of any organization trying to re-design traditional incentive systems around scouting and development?

JD: I think some have. I don’t have any details for you.

Anyway, That’s the biggest non-player/personnel impact I’ve tried to have. Stability, family, we’re in this together, Ranger Pride, and you’re part of something special. And it’s critical for me to spend time with people like our minor league coaches. Touch base with or amateur scouts have a phone call with them every once in a while.. This Winter I had Barbara, my assistant, put the name and cell phone number of somebody different in front of me every day, both Thad & I. One day it was an A-ball trainer, the next a Dominican scout, the next day a major league coach, a AA pitching coach. Whatever it was…somebody every day was getting a call. I’m just trying to connect the organization.

MBB: Management by calling around.

JD: I know I play a little harder when I have a personal relationship with the guy I’m working for. It’s “we care. How are you doing? How are the kids?”

MBB: That is a fantastic method.

His idea, not fully explored yet, that scouting and development should get an incentive bonus for the success of the individuals who went through their personal workflows, is one I've advocated for organizations beyond baseball for a long time. It's a little easier to implement in Baseball than beyond because Baseball takes measurement seriously and executes.  Most non-baseball organizations have little idea of the output of their staffers, and wouldn't do it if they knew how. But if H.R., in part as a department and in part as individuals, saw a significant part of their compensation depend more the on high performance of the people they recruit and get into the organization and a little less on avoiding error (what Daniels here put in his letter as "Be creative. Don't hesitate to experiment") and a lot less on just feeling like they're feeding a boiler -- they shovel it into the system and never see it again, I believe H.R. would perform better through immediate behavioral shifts and over time by attracting more entrepreneurially ambitious folk to the discipline. The mechanics of the system would be imperfect, as all compensation programs are, but I've built a few context-specific proposals, and it's not hard to come up with one that's significantly better than the status quo with less risk than the status quo has.

And the personal involvement he talks about is a vital advantage small organizations have over large ones which suffer the Diseconomy of Scale that comes when the executives at the top of the organization don't run into every staffer every day. Daniels is doing what's doable to address it.

He's top-flight to have noticed it makes a difference and even better in that he sets aside time to attack the limits scale imposes. It'll be fascinating to see what the Texas Rangers will doing in the 5th year of his regime, because it takes a while to turn around diseconomies of scale.

¿Why are you waiting on it?


Thursday, November 03, 2011

Jon Daniels - Part III: Lessons in Changing Direction (A Reprise from 2007)  

In the last entry, I continued the conversation Texas Rangers' general manager Jon Daniels had with me in March, 2007. In this segment (one more to follow), Daniels talks about his initial moves on first inheriting management of a organization that has plenty of room for improvement. First moves are, as I try to hammer home, critical and usually set the limits of what a manager can achieve in the organization. His approach worked well enough that three years later (the planning/change horizon in major league baseball is usually six seasons, sometimes five) his front office team participated-in/led a very unusual accomplishment -- having a franchise get to the World Series in back-to-back years.

In the previous two entries that resulted from the interview Jon Daniels worked with me in Spring Training this year, we covered a couple of lessons from him. This part of the interview covered his approach to his early moves.

I asked him how he looked at his personnel and what kinds of moves he thought might need to occur. The reason I asked was partially too try to reveal how his management mind operated.

Jeff (MBB): Last year in Spring Training, the Rangers had one of those Hollywood disaster movies. You guys had an extraordinary string of injuries. This year, it seems more in the normal range. Given that, is there any spot on your roster that’s at the top of your list as a place to be looking for reinforcements? Or is it too early (March 20)?

Jon Daniels (JD): We don’t have a ton of depth in position players. And long-term, we don’t necessarily have a slam-dunk heir apparent center fielder. Those are things I’ll be looking out for.

I think in the past, we’ve always erred on the side of bats. As an organization, we’ve redefined ourselves, what we’ll be about. We going to clearly err on the side of pitching. It’s why I think we’re fine this Spring anyway. We’ve got some depth there – we have more guys who deserve to make the club than we have spots. 

But I’d much rather be in that position than I was last year.

I counsel managers to make a big (but thought-out) splash early on in starting a new management gig because one never again has as much chance to act unimpeded, ever. Daniels had a factor that might have been either a severe constraint, or perhaps liberating: his relative chronological youth. If he had chosen to let it be a constraint, it could have made him err on the side of caution -- but as you can see, it didn't. BTW: there's a long aside here that's not classic MBB material -- Jon's relating to me how that first press conference he did came about. I left it in because I thought it was interesting to me personally, and I thought it might be to some readers, too..

MBB: {SNIP} On the subject of starting a new job...I always say when a manager starts a new job, it’s critical to have some serious achievements right away. There are some GMs, Doug Melvin and Bill Bavasi for a couple of examples, who view themselves more as stewards, less inclined to tear things up than I usually advocate for my (non-baseball) clients. When you took the GM promotion with the Rangers, you were quoted as saying something like “we’re going to do many different things”. I don’t know if the reporter munged the quote…if perhaps you had said “we are going to do some things differently”. When you took the promotion, had you already developed ideas on which you had wanted to execute?

JD: I did have a few things…but first, I want to say, I’d take that first press conference with a grain of salt.

A quick chronology for you.

Season ends on a Sunday. We have a staff meeting with ownership on Monday. John (Hart), Buck (Showalter), me, one or two guys from the staff, Tom Hicks and his son Tommy, who’s involved in the business. We go over a lot of things – I’d prepared a good amount of information for the meeting. And John throughout the meeting is constantly deferring to me. A couple weeks back John had told me he was going to come back for another year. We get up and we go to leave and John take my hand and says, “hell of a job today”. A little differently than usual. So I leave, fight through traffic, get back to the office about 6 o’clock. And I have a 7 a.m. flight to the Dominican Tuesday morning, and I have an e-mail message from Tom Hicks saying please call me when you get back to the office. He doesn’t usually do that, but he has contacted me directly before.

So I call Tom, and he says, “Jon, what do you have planned for tomorrow,” and I told him about my trip to the Dominican…we were working on opening a new academy there and I’m overseeing the project. He said, “I’d like for you to cancel your flight and come to the office tomorrow morning at 10 o’clock.” When the owner tells you to cancel, you cancel. I said, “No problem. Is there anything I can prepare?” and he said, “Just be prepared to talk about the future direction of the franchise”.

So I called John, and I asked him what was going on, and John said, “When you left, I went in to tell him I was going to step down and I recommended to him that you get the job.” It’s now 8 p.m., I call my wife and tell her I’m not going to be home, that I’ve got some preparing to do. Including thinking “am I ready?” You may get one shot at this…do you want to blow it? Or, you may never get another shot at it.

Prepare. Don’t sleep much that night. Walk the dog at about 4 in the morning. Go into Tom’s office at 10. And at 11:30, he’s extending his hand to me and offering me the job. About 45 minutes into the meeting the questions stop being “If you were to get the job what would you do,” and the tense changes to What are we going to do? How are we going to handle this situation?” Offers me the job. At 12:30, we have lunch. At 1:30 we call a press conference, and at 5 o’clock, we’re in front of the cameras. 
There wasn’t a lot of time for me to prepare my thoughts.

MBB: So the things you had in your toolbox you thought you might introduce, what have you done, what have you put off that you may or may not do, and what were the ideas you had planned on acting on that you decided not to?

JD: I think that there are two global or philosophical changes things that I have really tried to introduce. The first is I’ve tried to gear the organization more towards pitching – that’s more a result-oriented, tangible difference.

The other one is something I did in response to the fact that the organization had become too fragmented. I think in the previous six years, I’m the 3rd GM since Doug (Melvin), Ron (Washington) is the 4th manager, we’ve had four scouting directors and four farm directors. That’s way too much change. And we talk all the time about success being the result of stability and ability. We didn’t have the first, and the other was lacking because of it.

So we had our first organizational meetings this past off-season…the first, I think, since Doug left…seven years. 

MBB: Wow. That long?

JD: Yes…as a whole organization. We’d had met as departments.

MBB: So the organization-wide meeting…that was your initiative?

JD: Yes.

One of the things I want to do is create more of a family atmosphere. Yes, accountability, and goals and deadlines. But…we’ve done a lot of little things. The front office, we write little cards to everybody on their birthday on their kids and wives birthdays, their anniversaries, Mother’s Day. Here…here’s an example of the kind of letter we’re sending out….we’re looking to build that kind of ethic.

{he let me take a minute to read the letter}

BEYOND BASEBALL - BATTLING CREEPING QUAQUAVERSALITY
On the field, the Rangers had tried, and failed to get back into the playoffs, as an offensively-driven team in an offensively-lush home ballpark. (Though it's important to note, Don Malcolm realized the offensive-boosting park has at times actually -- pre-Daniels -- fooled the team into thinking its offense was better than it actually was and undervalued its current pitching.) Daniels has made a commitment to try the other side of the equation. 

Off the major league team's field, the Texas Rangers had become a quaquaversal organization, radiating out in all directions simultaneously: geographically, departmentally, and as a result, socially, too. 

This Diseconomy of Scale is near-universal in large organizations beyond baseball. As the size increases, the likelihood of quaquaversality increases, the Scylla and Charybdis of Us-Them-ism and lack of coordination increases. How can you maintain the mission, support goals, keep generating objectives in harmony as this happens?

Conscious effort applied to connecting people and methods across the organization, showing each individual how they matter and how other individuals they don't yet know matter. Every organization is going to need its own plan for the creating a centripetal force to hold counteract the Diseconomy of Scale as best they can. Daniels' initiatives here make excellent sense, and we'll pick up more of them in the next part of this interview, in a subsequent entry.

Friday, October 28, 2011

Jon Daniels - Part II: Rangers' GM Gives
a Lesson in Resource Management
(A Reprise from 2007)  

In the last entry, I started covering the conversation Texas Rangers' general manager Jon Daniels had with me in March, 2007. In this segment (more to follow later), Daniels talks about the process of making decisions. Specifically the interplay of managing resources, here an apparent excess capacity of good relief arms.

Most managers beyond baseball have a hard time knowing what to do with excess capacity, especially how to choose among what look to be equal options. I asked Daniels about what he might do to resolve the apparent surplus.

MBB: Let me get away from a chronological approach here for a bit.

There was a story recently about relief pitching. Apparently you have this bullpen that other people think is strong enough that you should be trading some of those arms. And your response was something like, “We’re keeping an inventory of others’ interest”. 
So I’d like to get your insights on decision-making in general from this example. If the time comes that you’re going to trade, how will you go about deciding who in your bullpen you are most open to trading?

There seem to be a number of possible ways to anchor a decision. You want to keep the widest range of “looks”; last year you seemed to have a wide number of looks out of your pen. Choosing who you keep or let go might be based on pure ability…who’s the “best”. There’s who might offer you the best return. Or would you base it on what you can get back. Or something I haven’t thought of.

JD: It’s a little bit of all of the above. That might seem like a cop-out.

MBB: Do you try to anchor it on something though?

JD: It’s really a balance of two factors. It’s building the best bullpen we can right now, and measuring what the return is, even if that means giving up one of your seven best guys. 

After my experiences in the last couple of years – I think in this game, we have a tendency to overthink sometimes – I do anyway, try to get too cute. Will I consider trying to do something with one of our best seven guys? Sure. I’ll never just say “no” to any offer – I’ve got to consider everything, weigh all our options. At the same time, I put a lot more emphasis on putting our best club out there, protect our depth. We do have some guys with options. It’s inevitable we’ll need more than the seven relievers we have right now. I’ll put more emphasis on our own needs. Unless the return for one of our best seven is overwhelming to the point where it’s a deal you couldn’t turn down.

So Daniels' model (which should be your own, too, in most cases) he's going to balance the present against the future. He gives a slight extra nod to the present "I put a lot more emphasis on putting our best club out there", but without ignoring the future "It’s inevitable we’ll need more than the seven relievers we have right now". But this is not an absolute. If Daniels gets a return he couldn't ever match with present value, he'd go for the "overwhelming" return.

The balance of present against future is specific to the 2007 Rangers, and for them, today is a little more important, But as with all baseball organizations, both are taken into consideration -- you have to win today, and you have to win in the future..

At the same time he knows, he's prepared himself for the idea, that in spite of his initial setting (leaning towards the present against the future) there's some level of return at which , because if its magnitude, he can shift his balance to garner the better part of a deal.

BEYOND BASEBALL
Beyond Baseball you should internalise this Daniels method. 

Balance the present and the future...you have to win today and win tomorrow. Know if your organization/workgroup needs to emphasize one a little more than the other in the current context. Be prepared to be flexible, to slide along the now/future spectrum if an opportunity that's so juicy comes along it just outweighs your current balance objective.


Wednesday, October 26, 2011

Jon Daniels - Part I: Rangers' GM
Got Mentoring From a Star
(A Reprise from 2007)  

A reader asked me last week if I had any idea why the Texas Rangers had been able to make it into the World Series two years in a row, and if it has anything to do with their management. It certainly does, I believe. When Jon Daniels was selected as G.M. five years ago, he was very young, but already very, very astute. He had been generous with his time and we spoke for a long while about his background in and Beyond Baseball, and his approach for building a franchise that had been in the middle of the pack for performance. I'm going to reprint the results of that interview piece-by-piece, because I think you'll be able to see what he was doing that led to this level of success.

In the 40% of management jobs that require a significant element of domain-specific craft to achieve excellence, it's normal, and usually necessary to have one or more identifiable mentors.

That doesn't mean there aren't successful self-made managers in these positions. The self-made, in fact, can be the most brilliant innovators (someone had to invent the Baseball GM job as it exists, in this case Ed Barrow, and he was, by definition, self-made as a GM). But running without inetrnalised standards leads more often to underperformance, and that underperformance is usually a result of the self-made nature of the manager, the using up of cycles/energy/ergs/torque trying things the standards "know" are no- or low-return. I read a circa 1983 study that confirmed this logic -- it found the managers who scored in the highest and lowest quintiles in independence were disproportionately represented in the least-successful and most-successful achievement quintiles. (I've been looking to find that old study now for about a decade with no luck -- all leads welcomed).

A Baseball GM with one of the most interesting backgrounds generously gave me a ton of his time this Spring. Jon Daniels of the Texas Rangers is usually thought of as being inexperienced because he is young, and generally regarded as the youngest person ever to get a Major League team's GM job. While his ascent was rapid, that thought is off-kilter for a couple of reasons. The first is, he'd taken on diverse responsibilities in multiple organizations.

The bigger one is, he had activist mentoring in systems from a team of people who trained under a management leader who actively mentored (that is, made a serious point of it, deliberately carving out time and resources to see that it was done), and who delegated and built of a team of talented people who would take on that deliberate mentoring model and apply it.

The mentor is John Hart, who built the management that grew the Cleveland Indians into the 1990s powerhouse they became, and produced innovators who played and play significant roles in the development of other franchises' competitive theories and action: Oakland, Arizona, Colorado, San Diego, the Los Angeles Dodgers of Los Angeles, Boston and of course, even after several years, Cleveland itself.

Beyond Baseball, this approach, selfless on the surface, can lead to great results, if not always recognition. More about that later. Here's the beginning of an interview that will end up being a multi-parter, thanks to Daniels' generosity in sharing his insights and time.

Jeff Angus (MBB): Jon, you were brought into the Rangers organization by John Hart. So many roads in today’s baseball management lead from his regime in Cleveland. Was that an important part of your decision to come to the Rangers? 

Jon Daniels (JD): (laughs) That would imply I had a lot of options. 

MBB: You were working in Colorado… 

JD: …yes, and Dan (O’Dowd) had offered me a chance to stay on there as an intern. It was right after 911, my family was in New York and I had been long-distance with my wife (then my girlfriend) for quite a while. There were a number of reasons I didn’t stay in Colorado. The lure, the idea of working for John was very attractive. I had worked in Colorado, so I had specifically worked with Dan and Josh (Byrnes) who had spent a good amount of time with him in Cleveland. And they have had a great deal of success, as well as others from there – Paul DePodesta, Mark Shapiro, Ben Charrington, Ruben Amaro Junior, Bud Black. 

A lot of quality people started under John. He’s a critical person in my career development. He’s one of the most dynamic and engaging personalities you’re going to find. I have told John my only regret is that I didn’t get to work with him when he was building Cleveland…there are so many great stories that came out of there. I’ve learned a tremendous amount from John. 

MBB: Cleveland was the most important innovator from that time. 

JD: Well, there are a few different trees. You’ve got the Pat Gillick tree, to some extent the Dave Dombrowski tree…the John Schuerholz tree. 

MBB: I consider the Pat Gillick tree comes from, as the Schuerholz one does, from Baltimore. John, I think, worked for Harry Dalton, who was his mentor. 

JD: Pat’s tree is really dynamic from the standpoint of scouting. You’ve got Gord Ash, you don’t necessarily have a ton of front office types, but you do have a ton of scouting types. 

MBB: True. 

JD: You have Don Welke and Bobby Mattick, Al LaMacchia, even some more recent guys…Logan White worked with Pat. He was a cross-checker in Baltimore. Some guys in Seattle…Ken Madeja who’s now a special assistant over there. He drafted John Smoltz, Derek Lowe, JJ Putz, Ryan Feierabend...he’s got a tremendous track record. There’s no doubt that’s it’s a great thing on your resume that you learned under John. 

MBB: When you came here and started working for him, what were the most important things you learned from him? 

JD: Well, everyone in the game now wears a label. You’re a “stat guy” or a “scout guy” or “new school” or “old school”. You’re a “this” or a “that”. John, having played a little, having managed in the minor leagues, he’s easily accepted into the old school ranks. Very easily accepted into the scouting ranks and the on-field culture. But some of John’s strongest relationships in the game are with the Mark Shapiros and Chris Antonettis…Paul DePodesta, Josh Byrnes and me, who didn’t play professionally and guys who are labeled the stat guys. 

John embraces it all, he wants all the information: medical, make-up, on-field, off-field, statistical, objective, subjective and that’s an ethic I’ve really tried to embrace. From my background, what used to come more naturally is looking at things objectively…statistics. That’s why I’ve surrounded myself with guys like John and Don Welke, Jay Robertson, Mel Didier, Gary Rajsich on down the line. Ron Washington…he wasn’t the kind of guy the industry expected me to hire with my background. 

It’s critical for me to get information from every possible direction. John Schuerholz had a great quote…I’m going to butcher it… “He with the best and most information wins”. 

That’s true. 

{SNIP, for now}

Key lessons here.

  1. Winners embrace everything. That's not saying every component is equal -- but no shred of potentially useful knowledge is to be ignored up front. Winners further balance their weightings of various forms of knowledge in response to context.
  2. Embracing everything is not a contained strategy in itself. There are a number of ways to act off of an embrace-everything strategy -- Daniels points out several trees and branches off a tree. As managers who've been mentored work with it, they tweak the rules or make some new ones. That intellectual process is precisely parallel to cultural evolution of other domains. Daniels may end up making a branch or entire new tree of his own (Jon thinks Schuerholz has started his own tree). 
  3. Note how people-centric his knowledge/apprenticeship is. A couple of these names come up multiple times. In a The Talent Is The Product endeavor, that is, a value-added and not a commodity one, people are not only the key (immediate) production asset, but the key long-term growth (capture, organization, refinement & dissemination of knowledge) asset, too.
  4. ...and this is less clear from this interview than what I've gotten from other Hart protégés...taking personal credit is less important to successful players in this kind of management environment that making sure the things for which credit could be taken get delivered and shared.

In the next part of the interview, we'll talk about multi-factor decision trees and on how you make (or avoid making) a big splash on starting a new job.


Monday, October 03, 2011

Management By Wishful Thinking #163: Kurkjian's Krazy Kwack-Up  

Making a prediction on significant events that have significant unknowns that play into the outcome, and you're likely to be made a fool. Beyond Baseball you see this a lot, most often in the corporate world, more often than not in corporate social structures where the system doesn't hold people accountable.

Virtually all organizations need to apply analysis to strategy. The most transparent billion-dollar endeavor is Baseball, so Baseball makes for some pretty clear examples of strategic planning and allocating resources from the results.

Major league baseball teams, with rare exceptions, use advance scouts to capture and analyze data about upcoming opponents. The scouts summarize this into information that their team uses to plan for immediate series, as well as keep it archived as part of a baseline of information for later tussles.

For teams that are likely to make it into the playoffs, this effort starts being more critical around mid-September. In most years, it's becoming obvious which opponents are the most likely. This'll sound like a big "duh", but playoff-bound (or still-playoff hopeful) teams have access to a limited pool of skilled advance scouts, so allocate them to the games/teams stochastically: They neither choose a single-most likely opponent and put all their resources into one (a deterministic approach), nor do they allocate an equal fraction to every single team that hasn't yet been eliminated (a random approach). With their stochastic approach, they are most likely to pay some attention to all possible opponents, but invest proportionally more in scouting most likely opponents (tweaked by how much they've been playing against them recently and have on hand immediate intel) . 

Well, yes, that is a big "duh", but in the corporate world, this tends not to work as elegantly. There's an entire field of study on this, and some useful, applicable research, such as the paper "Detecting Regime Shifts: The Psychology of Under- and Over-Reaction" by Cade Massey & George Wu, available here. Over- and under-investment in allocating analysis is a daunting problem in corporate social structures, because of Angus' First Law of Organizational Behavior: in general in corporate systems, accumulated leadership tends to be individuals who diminish accountability (something Baseball can't allow).

If the probabilities are murky because there are a lot of uncertainties operating or if the events are based on a small number of binary outcomes, or both (for example, any October best of 5- or 7-game baseball series; think, for example, of the 1995 Cleveland Indians, the strongest team of the previous 20 years, getting shredded in the Series that year by a perfectly-fine-but-not-exceptional Atlanta Braves team) corporate analysts tend to "freeze up". The risk becomes high of choosing incorrectly, and more often than not in the corporate world, leadership's cognition will devolve into MBWT (Management By Wishful Thinking) as an energy-conservation tack -- that is, why invest a lot of intellectual effort when the outcome is uncertain -- just go with your gut...and your gut is driven by hopes and wishes.

KURKJIAN'S KRAPPY KOGNITION
You won't see a lot of this in Baseball management. But there was a howler last week when, thanks to fate and relentless baseball practice, both the American League's and National League's wild card teams, and therefore all four playoff set-ups, were in flux going into the 162nd (last) game of the season. So there's a great example of it around Baseball.

One of the most experienced and bright Baseball pundits, ESPN's Tim Kurkjian, talked about going into the last day of the regular season, with the extraordinarily strong finish of the Tampa Bay Devil Rays  (behind by 9 wins for the wild card with 26 games to play) tied for the wild card with the Boston Red Sox in the A.L., and the Struggling Atlanta Braves tied for the same pseudo-honor with the surging St. Louis Cardinals. 

Neither league's wild card contenders were playing against each other, so the results of four different games would decide the regular-season outcome. If in either league both contenders had the same game outcome (a win or a loss), they would have to play a one-game head-to-head tiebreaker, but if one league contender lost while the other won, that would be the decider.

In all four games, the contender's opponent had zero "incentive" to win, except as a spoiler, so Kurkjian's assumed they'd be easy pickings, that all four contenders would win. And in the corporate world, or even in other endeavors that are less competitive than Baseball, say the NFL, that might be probable. In Baseball, though, Jocketty's Law applies: Whatever doesn't make you stronger, kills you.

Really, though, what the pundit was hoping for was that all four contenders would win so there could be an additional day of intense, winner-take-all baseball. Not a bad hope...it would have been fun, but the odds were against it

The Red Sox faced their division's "doormat", the Baltimore Orioles, so Kurkjian was probably as safe in choosing that outcome as in any of the four contests. But there were two factors he chose to ignore: Baltimore was playing at home where they had been 5-4 against the Sox during the season (certainly not roadkill), and O's manager Buck Showalter's relentless determination to squeeze every possible gain/win out of every moment/game. He didn't exactly ignore a third factor, the Sox' 17-27 play since August 10th, but he dismissed it as ephemeral. The O's refused to play dead, and came back in the 9th inning with some serious heroics.

Kurkjian didn't under-rate the quality of the Devil Rays' opponents, the New York Yankees, but he did grossly underestimate two factors that affected the Yanks' determination to win. First, the Gothamites were already in the playoffs, meaning if they lost to the Devil Rays and the Tampa team faced them later in the championship series, their opponent would have a psychological advantage, perhaps not massive, but in a system where whatever doesn't make you stronger kills you, not to be ignored. Second, the Yankees, from both a pride and profit position, practically prefer playing the Red Sox (a legendary rivalry with both richer revenues and blood lust at stake). So the Yankees weren't going to roll over, even if they weren't going to compromise their playoff chances by squandering their best starting pitcher or reliever in the effort. The Yankees put away the Devil Rays early but Joe Maddon's relentless and loose squad came back and won it in 12 innings.

In the National League games, he did the same, presuming the Braves' 11-19 record since August 24th was a short-lived swoon and that they would rise to the occasion. The Braves were certainly an appealing and skilled team, but they were playing the team with the best record in Baseball, the 101-61 Philadelphia Phillies (and you don't get to 100 wins without playing every pitch for keeps). The Phils, further, had the same incentive the Yankees had; the need to win for psychological advantage in case the Braves would make it into the championship series against them. The Phils wouldn't lie down and they beat the Braves in 13 innings.

It was certainly the most exciting last day of regular season baseball in my lifetime, with four games that absolutely counted, three of which were decided in the 9th or later inning.

But in his MBWT, the pundit ignored completely the Baseball precept he absolutely has every reason to know and internalize: Jocketty's Law.

The next time you have to engage in strategic planning, don't fall into Kurkjian Kraziness. Do what analysis you can do, and be prepared that with a lot of competitive uncertainty, you could be wrong. Just because the outcome is fuzzy, do not allow yourself to surrender to Management By Wishful Thinking because it's much easier than serious analysis.


Sunday, August 21, 2011

A Revelation From Fred Claire: How to
Negotiate With a Competitor  

In closed or limited organizational ecosystems, you have to be able to negotiate with competitors. Not all of us work in closed systems, but unless you're the rarer than rare person who has so much power he can force his will on everyone (say, Saparmurat Niyazov or  Lloyd Blankfein) sooner or later, you'll be negotiating with a competitor. It could be external...a company that's a direct competitor, or internal, a territorial manager of an adjacent department or a department you are competing with for resources.

Baseball is an almost-entirely closed system. Whenever you make a deal with another team, you are pushing hands with an antagonist who, in a zero-sum system, is seeking the exact same end goals you are: a World Series trophy. So any asset to your side of the equation is most likely a debit on her side. In a zero-sum system, it's pretty rare to get to a win-win outcome. (Bill Bavasi told me this, btw, is one of the reasons some GMs far prefer free agent signings -- it doesn't collide with the zero-sum nature of trading in a closed system.)

SO HOW DO YOU DO IT?
Well, if it can be done anywhere, it will happen in the most vibrant, flexible, advanced management arena in the world, Baseball. And the way you do it is to analyze the situation in agonizing depth, or at least to a level considered agonizing in the bush league management arenas that are the ones Beyond Baseball.

I'll give you a great example I read recently in Fred Claire's 2004 book My 30 Years in Dodger Blue. The situation is this: In 1998, the Bums' catcher and primo team star, Mike Piazza, and coming off arguably the best-ever offensive season a catcher had ever had, was to become a free agent. Claire and the Dodgers fiercely wanted him to stay, but new corporate ownership (Fox) was focused elsewhere, and enforcing the normal post-takeover budgetary tightness, while Team Piazza was indicating they were seeking the fattest contract in Baseball history. Pre-season negotiations had failed to close the deal, so Piazza entered the season unsigned, an indicator to other teams that he might be traded (since a team that holds on to a good player who leaves for free agency & signs w/another team is very unlikely to recover "full" value for the loss of services). Other General Managers, such as the Florida Marlins' Dave Dombrowski, a leading practitioner of negotiating arts, would float offers, in the hopes of adding immediate wins, or adding wins and signing the star, or alternatively, flipping him to another team looking for immediate wins in exchange for a handful of promising cheap youngsters.

So, this excerpt from Claire's book:

In that call, on April 10, our negotiations with Piazza on hold, Dombrowski had inquired about Mike. His approach was very direct -- "Fred, would you trade Mike Piazza and a young, low-salaried pitcher for Charles Johnson, Gary Sheffield and Jim Eisenreich?"

I knew Dombrowski was under orders from Florida owner Wayne Huizenga to unload payroll after the Marlins had won the World Series the previous season and yeat had lost money in the process. Sheffield was at the top of the Marlin salary list in that he had just signed a six-year deal that paid him $61 million from 1998 through 2003.

Dombrowski figured if he could trade Sheffield for Piazza, the Marlins would be free of the bulk of their future payroll obligations. Furthermore, Dombrowski would be in a position to acquire young players for Piazza in that Mike was in the last year of his contract.

I went to Graziano [Claire's boss] and told him {snip} I wanted to reply to Dombrowski that we weren't interested in discussing Piazza because we wanted to sign Mike, but we were interested in Sheffield.

My reasoning: I felt that as long as Sheffield remained the focus of trade discussions, Charles Johnson would remain a Marlin. The two made an attractive trade package, the high-priced slugger paired with the lower-priced but highly-valuable catcher. If Fox decided Piazza had to go, Johnson would be just the replacement we needed. {snip} 

A subtle, masterful playing of the chess board that can only happen because Claire's workgroup has come to a blisteringly thorough understanding of the other side of the negotiating table. The Dodgers still want to sign Piazza, but they may not be able to, for whatever financial or corporate-political or personal reasons. The Dodgers would like to keep the Marlins' younger, cheaper catcher (and not as fine a player, but already Johnson was an All-Star and had won a Gold Glove) in the trading pool so the Dodgers might snare him as a contingency if Piazza left. But Johnson was a most-attractive player beyond his on the field value; he was a logical pairing with Gary Sheffield, the personally difficult but extremely productive and extremely expensive slugger in a trade.

So to keep Johnson from leaving the Marlins, Claire hoped to pin the Marlins by expressing more interest in Sheffield than the Dodgers really had. Getting Sheffield's and Johnson's prowess and payroll obligations wouldn't necessarily be a tragedy, but why not try to get the sweeter benefit/cost pairing alone (in Johnson)?

ADVANCED NEGOTIATION 400, IN, AND BEYOND BASEBALL
To attempt this required nothing less than the striving for total data omniscience.

Claire and his group needed to:

  • examine the dollar and playing values,
  • learn and interpret the other side of the table's motivations and short- and long-term plans,
  • interpret the Marlins' valuation systems and measuring factors as well as their own, and
  • come up with either a win-win match-up, or, barring that,
  • a ploy that would freeze the Marlins pursuit of other deals as long as possible .

And, oh yeah, without totally burning the other side of a table, because (especially) in a closed system, you don't want to set off a neutron bomb (a deal so bitter that it guarantees one side will never again do business with the other).

In your own management, consider how complex the preparation for this negotiation was. Are you good enough for Baseball (that is, do you prepare this way)? You can in most cases, of course. It requires a level of research most managers Beyond Baseball are unwilling to take on.

Maybe you can't be as skilled as Fred Claire, but I promise you it's worth trying.


Thursday, August 11, 2011

Yellow Dandelions Trump Black Swans & Blue Oceans  

"Luck is the residue of opportunity and design." 
--
John "The Bread Street Bomber" Milton & Branch Rickey

The global Business of Business Advice is an odd industry. People write articles or business publications on a theoretical idea. They try to spin the idea in an original-sounding way, and if a publisher thinks the sound resonates, it becomes a book. If the book and the publicity around it becomes widespread enough, becomes a cult. Hundreds of thousands of readers, some of whom have a lever, a fulcrum & a place to stand, think they might apply the theory in their own workgroup or organization.

Roughly, for about every 1,000 copies sold, I estimate there are about 1,500 people who learn enough about the underlying principle to talk about  the one sentence description of the core theory. I estimate 600 of the books get read through, maybe 30 people try to implement a project, initiative or makeover based on the theory, and of those 30, you can count on the normal rate of success (Angus' Second Law: 85% of corporate projects fail absolutely or are euthanized (or forgotten) before completion, 10% deploy based on their original goals and 5% deploy based on original goals and succeed). So for every 1,500 people who can relate the core idea, 2 (rounding up so as to be a bit optimistic) turns Business Advice into useful action. For the other 1,498, it's just plaque, perhaps entertaining or diverting, but nothing that delivers on the mission -- the explicit promise of business, leadership or management advice.

Two of 1,500 is only an average. It can go up (or, more likely, go down) from that proportion. There's an underlying reader trend that undermines the chance for implementation. As a mass, readers would rather read about big ideas than small ones, and they'd rather read about theory than practice. So the largest readership goes to the big theoretical idea books than the practical (something you do that creates positive action). And there's another factor that literary (book) agents will tell you, too: Readers don't want to act on any of this Business Advice - they just want to be entertained and feel good.

Here are two favorite examples of fun best-selling global Business of Business Advice that are pre-destined to never reach the 2-in-1,500 successful implementation norm: The Black Swan Theory and Blue Ocean Strategy. They are both giant ideas based that are probably quite true but close to impossible for any individual or team to apply to anything bigger than a lemonade stand. The Black Swan is based on the giant idea that, "A black swan is an event, positive or negative, that is deemed improbable yet causes massive consequences." Blue Ocean, "explains how to create uncontested market space and make the competition irrelevant while charting a new path to capture new market space that is ripe for growth".

Well, Yellow Dandelions trump Blue Oceans and Black Swans...not for popularity and sales, but on two counts: 

  1. You can actually implement this idea in any organization, and
  2. The net benefit of deploying it will give you actual (not just theoretical) returns.

The Yellow Dandelion was second-sacker Fred Pfeffer, one of the first baseball players to write a book on "scientific baseball". As explained in Paul Dickson's exquisitely informative book The Hidden Language of Baseball: How Signs and Sign Stealing Have Influenced the Course of Our National Pastime

In 1889, N. Fred Pfeffer, the bare handed infield star and tactician with the Chicago White Stockings of the 1880s...published a manual called Scientific Ball {snip} At the heart of his defensive science was a "Code of motions so perfected" that every man on a club knew what kind of ball was to be pitched next. "Knowing this in advance, the men can so place themselves so as to give the man in the box [the pitcher] the most effective support.

{SNIP}

"Pfeffer believed that the fielder's job was to move at the very last moment, when the pitcher was in his delivery, and that once a play had begun it was imperative that the players knew how to back one another up. "Failure to 'back up' players and positions has probably been as disastrous a feature of losing clubs as any other which can be specified," he wrote. "Because of this fatal weakness, scores of otherwise well-played games are needlessly sacrificed each year."

The Yellow Dandelion Deployment is one that, because Baseball is so transparent and overwhelmingly meritocratic (both useful attributes wholly missing from corporate workplaces) you can just plain see works out.

The teams that grab the every-event, small but attainable advantages (in baseball parlance, "execute") tend to win more games because they don't leave games' outcomes as much to chance. If you watch a game for Yellow Dandelion Deployment, watch the fielders "cheat" on many pitches, cover each other on defense in a variety of ways based on the situation, you can see how absolutely effective this is. Sadly, televised games, while great to watch, rarely expose the Deployment. But I urge you to watch a major league game live (preferably from the upper deck as close to directly behind home plate as you can) and watch the extraordinary clockwork of a skilled major league team that has mostly veteran players. Pick one non-catcher fielder out for each two-inning span and try to follow what they do on every pitch, every ball in play. You'll see 120 years of refinement beyond Pfeffer's actionable principles, a level of teamwork and management acuity beyond everything in the non-MBB management world.

BEYOND BASEBALL
Unlike Blue Oceans and Black Swans, you can absolutely apply Yellow Dandelion tactics to your benefit in the workplace.

Make sure that on tasks that must succeed for your organization to succeed, each responsible person knows she has one or more teammates to back her up, own some responsibility for overall success. You have to start this overtly, not with a memo. Good managers always take on the responsibility themselves of each contributor's success, being there to back him up, but once a manager can break out beyond merely taking on that backing-up personally and deploy it to the contributors nearest the task-owner (not all others -- the right fielder can and will back up plays to 1st base but it's a waste of energy to have him try, futilely, to back up plays at 3rd) the useful contributors will learn the right back-up moves through repetition.

What's the best way to kick this off?

By both explaining the back-up theory in advance and then starting to assign back-up contributors to every task. These back-ups can be "editors", or "timers" or "ambassadors".

"Ambassadors" are most useful when a task is multi-departmental and the contributor assigned to the task needs to enlist allies or try to push through work happening outside her span of control; the ambassador helps with that external pressure.

"Editors" I use to be the second pair of eyes for quality control; the editor is someone the task-owner can bounce ideas off of and who can check deliverables for conceptual or trivial kinds of accuracy.

What I call "timers" are teammates who help the contributor stay on schedule and co-own the deadline. The timer is not a non-com issuing orders or applying pressure. The timer relieves pressure by being equally responsible for knowing the task schedule and helping out the task-owner without having to be solicited.

You probably won't have to delegate each rôle on each project. You can certainly invent other rôles that make sense within the context of your own endeavour, but invent a one- or two-word name for each, so you can use the name as a shorthand. But you should make a habit of assigning one or more back-up rôles to most every task.

At the completion of every meaningful task with an assigned back-up, you should get the participants to talk to the team about winning moves, or problems that would have been smaller with new back-up ideas.

After a series of successes, you invite contributors to deploy themselves as back-ups or invite back-ups on their own. (In Baseball, it's terribly inefficient -- that is, a losing strategy -- to have the manager assign every back-up on each pitch or every play in the field; players need to be able to do this for themselves based on established principles refined by their own practice and experiences.)

AVOIDING YELLOW DANDELION DEPLOYMENT PROBLEMS
There are two common problems in Yellow Dandelion Deployments: non-accountable or otherwise anti-team oriented contributors, and over-or under-management.

Some contributors resist help, being too egocentric or believing teamwork shows them to be weak. Some of these people are tractable, for example, if you point out how hard it is for a single person acting alone to execute a double-play. But some are simply too insecure or introverted to be comfortable having back-ups. You have one of two solutions to this problem: if the person is a great contributor with great success (think Barry Bonds) then exempt her from the routine; if he's not, get rid of him.

And you can control the over- or under-management. Over-management is removing from the contributors the chance to have rôles delegated to them (which is the equivalent of a major league manager trying to coordinate all players on the field with every pitch). Under-management is not selling the teamwork benefits hard enough, re-deploying people to the rôles they seem to best while still giving them chances to be good at other rôles, or not monitoring the evolution of the system and its outcomes.

The odds of you becoming enriched through successfully identifying a Black Swan and then deploying a counter are not 2-in-1,500, rarer than a no-hitter. The odds of you identifying and deploying a Blue Ocean Strategy are no better.

But 1,500-in-1,500 managers in any organization that has seven or more employees can apply Yellow Dandelion Deployments with success. Not only does it work, but it's actually fun.

You may not actually ever have three hits in an inning, like Fred Pfeffer had in a game on September 6, 1883, but you can knock out a bunch of hits everyday using his "scientific baseball" principles.


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