Management by Baseball

In Which Mad-Dog Pulls a Rodney

In a previous Seductions (& Giant Sucking Sounds) of Metrics piece (August 13), I was talking about the pandemic big-institutional metrics problem: measuring the most-easily measured things, then using those things to unintentionally reward non-productive behaviors. In that drift, the organization is actually pushing contributors the wrong way.

More insidious drifts happen when contributors mine the metrics to find a way to get points for dodging real work or effort. There are people at all levels of an organization that will invest energy in trying to play whatever system is set up, to maximize their personal return. I call these people Rodneys, after a bright, ambitious guy who used to work for me. Many organizations' incentive systems are set up to try to slipstream Rodneys' behavior. But what if there are seams in the system and they are rewarding in ways that don't give incentives for the behaviors that push the organization towards the intended goals?

Take Bill "Mad Dog" Madlock, a four-time batting champion in his prime from 1975 - 83. There's a seam in baseball understanding, even within baseball, that leads fans and still a minority of team office management types to overvalue batting average as a measure of a player's value. So if you were a baseball player, having a good batting average would be marginally more important than other, less well-internalized offensive stats that actually rewarded the team's offense. And winning a batting average title would be even more brownie points. More painful, if you accept his argument, Bill Deane argues in a recent Oneonta Daily Star piece that Mad Dog would sit out an extraordinary number of games towards the end of seasons with apparent injuries if he was leading his league in batting average. Deane asserts:

One man who was successful at winning batting titles was Bill Madlock. In fact, he is the only player to win four of them and not be elected to the Baseball Hall of Fame. Madlock and his proponents often complained that he was under-appreciated when it came to discussion of the game's best hitters.

Madlock certainly had a gift for putting the bat on the ball, but other facets of his game were lacking. He had sub-standard power, little patience at the plate, was an atrocious fielder at third base, and was regarded as a negative clubhouse influence. But what about those Silver Bats? Well, Madlock had a curious habit of sitting out much of September whenever he was in contention (and had enough plate appearances) for the batting title. The bat crown is one of the few prestigious titles which can be won despite missing a lot of action.

This would juice his chances to win the title, even though he was one of the better hitters on the teams he played for, so if he was sitting out extra games, he was undermining his team's offensive capacity when he sat -- he was pulling a Rodney. I'm not sure he was really dogging it (or Mad Dogging it) as Deane argues; the numbers are suggestive, but not unarguable. But even if Deane's argument on sitting out isn't true, the scribe had already pointed out the real metric mayhem here. Because batting average is so highly valued, Mad Dog didn't work on the pieces of his game that were weak. The reward system gave him enough incentive just to do what he already did really well even though the organization would have benefited more if he traded 30 points of batting average for 60 points of extra slugging percentage (as his contemporary George Breet did when asked by his team), and took more walks in tactically appropriate situations, and spent more time taking fielding practice so his glove wasn't quite as much a detriment.

Mad Dogs and Rodneys can be powerful assets for their organizations if the metric you manage them by are well thought-out. Rodneys are passionate about trying to understand the metrics you measure them by, so they can figure out a way to get paid more to do less. The original Rodney wasn't lazy -- far from it...he just got a kick out of playing the system and spent ergs looking for seams. He worked on an environmental consulting project I wrote about August 14, where we had built a system to reward a combination of quality and quantity, complex work and simple work. It was balanced so people who worked effectively would get rewards for their work whether they were faster/less accurate or plodding/precise, or chose to work on the complex problems or the simple ones. But Rodney kept coming back to try and find a seam, for example, simple work. He'd walk across the room with a pile of folders and announce to me, "here, I'm taking all the simple ones," then scrutinize me to see if I looked approving or disapproving or laughing at him secretly. He just knew (not) that there had to be a seam.

TIP: Baseball's Mad Dogs have a lot to teach you about how to manage your own internal Rodneys. Tune your incentive systems to reward truly advantageous behavior.

Success is going from failure to failure without a loss of enthusiasm -- Winston Churchill

If you work on projects in large organizations, you know how failures, even small failures, build up the plaque of dread and doom among participants. Failures become mythic, vocabulary of mistakes and "inevitable" doom become part of the vernacular of the organization. The cognates of employees get mapped to "we can't do it right here". Once this cognitive cycle starts, even 50th percentile projects are remembered for their glitches, not for what went well.

And at the end of a project, even an average one, team members start to pimp quality, deliver late when they could have been on time, treat each other with less public respect.

Management's response is most frequently ignoring the dread in the effort to apply more ergs to C.Y.A. activities. Management's next most frequent response to to pretend the project was a great victory, with rah-rah meetings, or all-paid golf outings for upper-level executives. Next most frequent response: lay off some people, sometimes even middle managers.

None of these responses are realistic or productive. None of these responses affect the next project.

Baseball has a great lesson here: Finish the run hard, no matter if the outcome of this project is pretty well determined anyway.

This morning, Baseball Primer has a link to a story about this year's sub-woeful Detroit Tigers. Their manager, Alan Trammell, is determined to keep the team playing to win even thought they're having one of the worst 20 seasons any team has had since the end of World War I, scarily evocative of the early, hapless New York Mets.

Classic sabermetricians like Bill James and Craig Wright have done studies that indicate player performance and team performance in the second half of a season has some tendency to continue into the next season...that's there's actually a partial performance "momentum". So by trying to keep his players winning and practicing acheivment and pursuing goals and analyzing success and remediation of failures in a totally lost cause, Trammell is working to build "momentum" for next season.

You should too. The culture of complaint, the plaque of dread, isn't erased by rah-rah meetings or layoffs. It's debriefing, analysis, incorporating into the institutional memory the things that would have made a difference on this project and that will on the next. It's emotionless list-building and a commitment to use that data next time in a flexible way. It's push-back, public correction of those who selectively remember only the things that went wrong.

The St. Louis Cardinals of 1980-1987 are a great example of an organization that went from failure to great success to mediocrity to re-building to other successes. When they were poor, they knew they were, but they built to succeed, drove hard to overcome their weaknesses.

And please note, I'm not suggesting that project managers of doomed projects whip all participants in a frenzied way to the very last deliverable even after it's become obvious they're not relevant. It's not about punishment or imaginary goals. It's about devising better methods and attention to detail, tuning team-work, learning from failure.

There's no quick fix for the Tigers' losing ways, nor for the built-up plaque of dread in large organizations' project work. But there is a mid-term cure if you pursue it and follow the baseball example: Trammell's Tiger tack.

His argument is one I support whole-heartedly.

Earl Weaver once said, "If you have a team meeting, then lose again, what do you do next?" Ah, the challenge of motivating your people to do their best. It's not an easy task, whether you're a manager of a professional baseball team, a middle manager at a high tech start-up or the head bookshelf manager at the local library. Luckily for us baseball fans, we can learn effective management techniques just by watching our national pastime and our favorite teams and managers.

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Everyone is motivated by something - the key to managing is understanding what those motivating factors are for each member of your team. In other words, everyone has a unique set of buttons that need to be pushed to help them do their best work. Taking the time to find out what those buttons are can work wonders for any manager.

Joe Torre delivered an as-told-to book Joe Torre's Ground Rules for Winners a few years back. The most important thing a manager can take away from it is Dan's point: it's not just vital to motivate, but each individual's motivation points are different and that, as a manager, you have to observe and use these motivation points, what I call "currencies".

Most organizations are like sovereign nations...they choose to use a single currency. Maybe it's cash bonuses, maybe it's a printed certificate of accomplishment, public recognition, a trip to Florida for spring training, or a tie. A Japanese company you all know once crowned their annual employee awards at Comdex by staging a sex-slave auction for noteworthy employees (as Dave Barry would say, "I'm not making this up"). But no single award/approach will work for everyone. Organizations need to diversify the currencies they use to motivate individuals...it's a little harder for the organization, but increases productivity.

The point of the motivation effort is to both properly recognize actual accomplishment and to reinforce the behaviors of the group. Dan & Torre both know how to do this: working to understand, and then act on the understanding of motivating individuals in their own currencies.

Something dull and undermining happens to organizations when they get big enough to use job descriptions....they frequently use them by misusing them.

When managers build a department or project team, too often they pull people off piles as though it was a big construction project: "I need 17 carpenters, 2 finisher and a roach coach driver". That presumes every person is roughly identical, a commodity, and therefore interchangeable.

Non-baseball managers could get much higher performance out of their groups and project teams if they followed the lead Baseball has supplied. Consider job descriptions, but monitor all the individuals you manage to measure their strengths and weaknesses. Whenever you apply a person to a job, consider what they don't do excellently that they could use help with.

Finding someone to complement a team member is something managers outside of baseball should do more often than not. It’s not done normally, but it’s an easy innovation that requires only applying the knowledge of the team’s individuals, and keeping in mind which tasks are the most critical (so you can pull someone briefly from a less important task to temporarily partner her with the team member on a more critical task who needs a complement). Seem complicated? Consider how (and why) they do it in baseball, and how it started.

That finding a complementary partner in baseball is most frequently “platooning”: pairing two players who bat from different sides of the plate at a position. The first noteworthy success with this approach was made by manager Gentleman George Stallings of the 1914 Boston Braves, one of the things that led them to their name “The Miracle Braves”.

Stallings signed on to manage the Braves for the 1913 campaign. They were 69-82, and finished in 5^th place. His best hitting outfielder, the aging and talkative Silent John Titus, retired at the end of the season, undermining an already below-average offense. Going nowhere fast, and without resources to simply acquire stars, it was the perfect environment to experiment. Stallings must have been carrying the mass-platooning idea in his breast pocket for a long time, but in 1914 he decided to platoon at each of his three outfield positions, according to Bill James. Most games, this meant resting a man against the pitcher who threw from his side (for example, resting a lefty hitter against a lefty pitcher, on the average avoiding a tougher match-up for his batter). It appears a couple of the early platoon partners (one, a 36 year old retread brought in apparently just for the experiment) didn’t work out well, but instead of giving up on the experiment, the team traded for a couple more potential platoon outfielders.

The 1914 Braves finished in 1^st (94-59) as a result of several things, including improved offensive contribution from their outfield. They then tore through the dominant franchise of the time, the Philadelphia A’s in the World Series, taking four straight games.

According to James, the eccentric experiment combined with the out-of-the-blue (actually out of the blue and red, the Braves’ colors that year) miracle season almost revolutionized roster construction for the next 25 years – every manager had platooning with successful end results shoved in his face. Basically, James said, it became a given that teams platoon at one or more positions.

Eventually, there was push-back from two factors, one that would affect your ability to do this in non-baseball organizations, and the other, I believe, won’t.

First, there was the natural law of supply. Stallings had no competition for marginal players with one or two very positive aptitudes; competitors were looking for all-around talent. So Gentleman George was free to browse at his leisure through he remainder pile, looking for players who had specific skills that complemented the skills the players already on his roster had. But once others noted the utility of platooning, it was more like Filene’s basement — a lot of stock, most of it useless, but a surprising number of valuable things and a horde of aggressive people competing to get them. That’s a natural law of evolution, and there’s a discussion in depth on this topic in Chapter 14.

That’s not going to be a problem for non-baseball organizations.

Second, and this will be a problem, is resentment and personal insecurities. Platooned players want to play all the time. Early on when you do this, your staff, especially the ones getting help, will want to go it alone. They won’t want to be looked-upon as flawed or weak, and most won’t want to admit they need help at anything. Most organizations punish people for not being Barry Bonds, so you’ll have to overcome this with some politically-sensitive pilot projects and make a big fuss when they’re over to show publicly you respect the efforts of both the helper and the helped. One more thing; plan things whenever possible so the helped person is the helper next time — it eases ego problems and helps everyone on the team recognize that everyone is a contributor.

And when you platoon, keep in mind Earl Weaver’s approach. You don’t remove all challenges from a person, try to denude them of anything they haven’t had experience with or failed with once. You expose them to things they might learn to do well. Yankee manager Joe McCarthy’s use of star catcher Bill Dickey is a good example. Dickey hit left-handed, and like most lefties, hit right-handed pitchers better than left-handed ones. Bill James looked into the scoresheets and found Dickey started 82% of the games where the opponent’s starter was right-handed, but only 42% when the starter was left-handed. Dickey still got to see lefties, but his team (and his own stats) benefited from sitting out against many lefties.

Applying the complementary talents of your team players is a powerful competitive advantage. Baseball is quicker than most organizations to grab tricks like this, but if you choose to learn from Gentleman George, Earl Weaver and Joe McCarthy, you’ll have an edge because your competitors won’t have the good sense (or, let''s face it, the guts) to follow you.

"Never pitch the same pitch twice, never the same place twice, never the same speed twice" -- Ed Lopat (Yankee pitcher)

Communication is important daily in management. Being able to transmit your thoughts, to "sell" your ideas above or below you in the hierarchy, to market difficult concepts, all of these acts, according to my buddy Mike Antonellis, require the mentality of a skilled major league pitcher.

Mike, who communicates professionally for a living at Lois Paul & Partners in Red Sox Nation, uses the word "pitch" for both what Pedro Martínez does and for the process of delivering a terse selling rap. So when he goes to a work meeting where he's "pitching" his peers or a journalist, he says,

"You need to get your pitch by them for a strike, so you need to assess the 'hitter's' strengths, the scenario, who's 'on base,' the score, what is the hitter expecting - and work to make the best pitch possible to get their attention.  Sometimes you need the go for the heater, other times, laying back and pitching a changeup and curve. "

I couldn't agree more. The heater, "the old #1" is direct spoken messages. This can work if you know your audience, if you know they know the content as well as you, if you know they are just taking your message at face value. But frequently, users have an axe to grind.

TIP: Think like a pitcher. Read the hitter and throw, as Mike says, "whatever it takes to get the deal done".

In my management consulting, I find the most prevalent management weakness in thinking about big projects is what I call ‘binary thinking’.

Dot-bombs tended to spend money as though they could sell stock for $120/share, so no-one ever said "no" to any request about spending, even on stuff like Kona coffee beans at $40/lb. or hardwood paneling from endangered Hawaiian trees at 22 times the price of oak. But when things went bad enough to catch the attention of funders, no one ever said 'yes' to any request...no coffee, no sodas in the fridge, no administrative help anywhere outside the executive offices, no testers to test for bugs in software about to be sold to customers, and people had to buy their own pens and pencils (all these 'yes' and 'no' examples from my experience, btw).

Now, in the permafrost economy, ‘no’ is the prevalent answer, and while a lot of the things people said ‘yes’ to before needed ‘no’s, the pure binary yes/no, good/evil, black/white simplistic thinking is very shallow and costly.

Baseball has had a binge of this. For years, a favored strategy of team managers was the sacrifice bunt, a move where the offense just-about-surely surrenders an out in exchange to advance baserunners. In the deadball era from about 1902 to 1920, many games were 2-1 and 1-0 affairs, so yielding an out (that is, surrendering the chance for a big inning) in exchange for a scarce resource (a run) made good sense; if you can win a game 2-1, why worry about how best to score 5 runs in an inning?

Managers tended to use this strategy they’d learned themselves as players, even after games most often became 4-3 and 5-2 affairs. The bunt was just the way “things were done”.

When SABR started becoming influential and people with strong math backgrounds started attacking probabilities, some of its earliest studies were on the efficacy of the sacrifice bunt. Researchers like Pete Palmer 'proved’ the sacrifice was a net-negative approach to winning. And it seemed to be, if you added up and made composite all the cases then averaged. It’s standard in SABR now to ridicule the bunt as a strategy in all cases.

But every bunt has its own context: a hitter with some measure (good or bad) of hitting skill, the hitter’s bunting skill, the pitcher's effectiveness, the infield’s fielding ability, the score, the inning, etc. There are hundreds of basic contexts for a given bunt, and most of them will be net-negative and some will be net-positive.

Tim Tippett, developer of the most advanced baseball simulation I know, Diamond Mind Baseball, has done an informed study on the bunt in his Diamond Mind blog, called Sacrifice bunting revisited (Monday August 18 entry). His conclusion is a mathematically-informed equivalent to the common sense argument I made in the last paragraph: there aren’t just two outcomes to a sacrifice bunt (successful where batter is out and runners advance one base; unsuccessful where bunter fails, no one advances), there are many. And when you factor in all the possibilities, the sacrifice bunt, (for many good reasons you should read his article to understand) is a net-positive tactic in specific context, and because the act of having the sac bunt in your arsenal forces the opposition to sub-optimize by spreading resources over more possibilities (one of the key Allied invaders' tricks leading up to D-Day).

There’s a lot for organizations to learn from this. Saying ‘yes’ all the time, or ‘no’ all the time is certainly simple, especially for the weak-minded or lazy, but reality is finely-graduated with many levels along the continuum. Every decision has a context. Good managers keep that in mind.

Nothing is so easy as to deceive one's self. What we wish for,
we readily believe -- Demosthenes

One of the most common failures of managers is MBWT (Management by Wishful Thinking). One current eye-popper hasn't happened yet, but the talk around Seattle Mariner land is that they want to turn their excellent young reliever, Rafael Soriano, into a starter.

Soriano is putting up stats as a reliever that are borderline unbelievable. Here are his last 10 appearances:

In these 10 outings, he's pitched 13 1/3rd innings, given up 4 hits, walked none and struck out 20, over one-and-a-half strikeouts per inning (strikeout king Randy Johnson whiffs about one per inning). And these were good teams...except for Cleveland, these opponents were all at or above .500.

Soriano's certainly in a groove. He's composed, self-contained, and throws an incredibly difficult to see (very fast) fast ball. And he has one other pitch, a slider, that's decent. But he basically has only two pitches. Most starters have three, and for a good reason (if you know this already, skip to the next paragraph). Starters need three or more pitches because they will face the same hitter multiple times, and a decent starter needs to change the sequence each time he sees a hitter in a game (or the hitter will be able to guess what's coming -- a big advantage). Relievers don't need as many good pitches because they see a hitter once per game.

Last year, the Ms fell in love with how effective Soriano was in two outings as a reliever so they decided to make him a two-pitch starter. The logic was you can get more innings out of a starter than a reliever, so why not get more Soriano innings? Well, he was sorta adequate sometimes, and then he started getting hammered. So instead of having a great reliever, they had an ordinary, so-what starter who looked increasingly demoralized.

This year, given a very good starting rotation (better than last year) and a relief corps with some high points, but performing less well than last year (and with their marquee closer clearly not at 100%), you'd think the Mariners would be overjoyed to have Soriano in the bullpen. But they wish he was a three-pitch pitcher so they could use him as a start and get more innings out of him. It's pure Management By Wishful Thinking.

MBWT is much worse outside of baseball.

I think that's because most things in baseball are measurable, and measured. Outside of baseball, most things aren't measured. I once worked in a technical documentation group managed by a great technical writer who was a totally hopeless manager. When he had been a writer, before he got promoted, he worked very slowly and systemically. He didn't produce very many manuals, perhaps two or three a year, but when he passed them off to the editor, there were no typos or layout problems. I worked differently. I produced 13 manuals in 15 months, but I had a high tolerance for ambiguity...my proofreading skills were below average for a copyeditor (and while I'm better now, if you read this blog often, you know I still miss some typos). And for a person good at spotting cosmetic flaws, it was very quick to find and fix. Since I could produce over twice as much product as anyone else who worked for him in an environment where he struggled to fulfill all the incoming requests, a rational person might think he'd be content with high output with some easy to fix cosmetic flaws. He wasn't. He wished I could produce at the high rate but with great proofreading skills. He insisted proofreading was easy and that it wouldn't slow me down. He was practicing MBWT.

Lots of managers do this, hiring someone in an emergency situation and then imagining that person will be a cure-all for their problems. Decent managers understand that everyone has strengths and weaknesses, and that to best propel the organization, you manage people to optimize the use of their strengths, minimize the use of their weaknesses, and, to make time to see if some weaknesses can be corrected.

Less-than decent managers Manage by Wishful Thinking.

Pete Rose is a lot like a defrocked CEO. Like the gaggle of "C"-level corporate types (CEOs, CFOs, COOs, etc.) who get fired for incompetence or venality or both, but then re-surface, many times with raises, inside other corporations or academe or government, Rose was caught, punished, but assumes he should get a free pass back in.

Pete Rose gambled on baseball, perhaps or perhaps not on games in which he was playing. Baseball's management was upset about this violation of their rule, which required a betting player to be banned for life from the game (as player, coach or manager). The Commissioner had an investigation done, the result of which was The Dowd Report. The finding was very strong but not unequivocal enough to, say, put Rose in the electric chair, but it was damning. Damning enough for Rose to accept a lifetime ban from the sport in exchange for not being prosecuted and not having to admit blame. By the way, for those who want to write and say baseball reneged because he was prosecuted, that prosecution was for income tax evasion...selling collectibles, truckloads of them, and pretending he didn't make any money on them.

But Rose currently is at the center of a somewhat-popular movement to get himself re-instated to baseball, which was his plan, I believe, the whole time. People who behave like sociopaths, tend to believe they can out-wait justice in cases like this. He's waited more than a decade, and is ready to roll out the "already suffered enough" argument supporters of Richard Nixon and Sadaam Hussein fall back on when guilt appears inescapable. To see intelligent debate on both sides of the Reinstate Rose issue, here are Rob Neyer's Pro case, and Jim Caple's Anti case.

I'm anti, but not because of these arguments, though if you read the Dowd Report and remove the emotional bomb in loving/hating Rose (substitute the name Barney Rubble for Pete Rose in the Report), it's difficult to come to any conclusion but that he was incredibly guilty. But that's not my issue.

My issue is, in baseball as in management, is you cannot let people get away with something the organization views as highly detrimental to itself. Either fire the person, or reprimand the person and give them an opportunity for public confession, if they're willing to do that as an alternative.

Accountability is the #1 fuel of a healthy organization

Don't let them back in under the "suffered enough already" rule. It undermines individuals' incentive to make hard choices in favor of the organization (and against the individual's personal gain) and rewards people who would use the organization as a resource to call upon for personal gain. Reneging on a generous deal agreed to without duress just opens up too many hard decisions to eternal re-negotiation, while making everyone who's being diligent feel like a sap.

TIP: It's important for a manager to be compassionate, and it's important to understand how some employees make small mistakes and pay terrible process for those mistakes. But when people who have leadership positions intentionally break the law or rules of ethics, and many can see that, don't give them a free pass or go back on sanctions you set up. Business is complicated and difficult enough without giving people who behave like sociopaths a free ride.

To get the most from the people you manage, you must put
 them in the right spot at the right time. — Joe Torre

A critical area of management I haven't yet discussed is people management, second base in the diamond model I presented the other day (Saturday, August 16 -- In Management, as in Baseball, you score by rounding the bases). If you're in an organization that does anything beyond commodity provision at low margin, virtually everything in people management is critical. Baseball managers and general managers build teams through acquisitions, competitions, and the areas of mentoring, training and teaching. Non-baseball organizations' managers, by analogue, do the same. Hiring the right players is most critical step, but how you break them in once they're on board is vital, too.

After you’ve put your team together, how do you get the most out of them every day to rack up wins? This area is one of baseball’s most fertile sources of wisdom for non-baseball managers.

The noteworthy model in optimizing player performance is the Baltimore Orioles’ organization, starting about a year after the sad-sack St. Louis Browns moved to Charm City and renamed themselves (because, frankly, losing the Browns as a name was not going to cripple their success rate. Never wealthy, the O’s substituted intelligence, organization, technology, and training to overcome a relative lack of resources. The prime mover behind their system was Paul Richards, a manager hired away from the White Sox after he’d set in motion a major turnaround of that franchise’s fate.

The underpinning of the Richards system was open-mindedness, giving chances to a lot of promising young talent, seeing who can (and can’t) do what by putting them in the lineup. The system produced more resolution about individuals’ than other teams' systems. Competitors may have had more money, but they were more likely to judge an untested prospect by his pedigree, so players with fewer credentials got fewer chances to prove their mettle and might never get their chance. The Orioles' system clearly identified more failures, but it also unearthed more successes.

At the same time, Richards focused resources on improving coaching methods for fundamentals and standardizing them across the system. If a player advanced or regressed in the farm system, or if his manager moved on, the player wouldn’t waste overhead adapting to new methods and strategies. As a by-product, this model was effective in testing and rebuilding struggling veterans whom the low-wealth Orioles could get on the cheap from other teams.

I’ve had good, and great, results with Richards’ model. When I was director of the InfoWorld Test Center, I applied it to the staff I inherited. When I arrived, they were terribly underused because the executive management back then didn’t have a shadow of a dream of a clue what their work entailed (and therefore low-balled their pay, too). The typical staffer had only junior college credentials, and the big-bucks sales and journalism execs didn’t respect that kind of paper. The staff and I worked together to provide each one an opportunity to prove what he could do, letting the aptitudes of each become clear through trials. Yes, there were lots of little failures, but lots of successes more than cancelled them out. Three of this wonderfully talented group went on to become test center directors at tech magazines, one at InfoWorld itself.

The Oriole Way didn’t end with Richards' innovations. It evolved through the younger generation of managers throughout the system, Earl Weaver among them. One key addition to the recipe was easing new players into challenges instead of the hazing ritual where skippers dump them into the deep end and see how quickly they drown. That deep-end dump is usually the artifact of a manager’s neuroses, more often than not an unconscious imitation of their (bad) dominant parent. The rest of the time it reflects sheer managerial laziness. Yellow Cab in Los Angeles used to do this, so did the Soviets' Red Army and currently the Iraqi Fayadeen.

In contrast, the Oriole method involved starting even the hottest prospects in protected situations. The O’s had mammoth expectations for Mike Flanagan, who eventually went on to win a Cy Young Award. But when they brought him up, Weaver used him (alomst exclusively) in blowout games where any performance anxiety he might feel would be dampened. Then Weaver moved him to starting games against easier opponents, ratcheting up confidence with each performance.

When any player, new or veteran, was struggling with some aspect of the game, Weaver, like Connie Mack 50 years earlier, worked to find a player non-critical spots in games. He used those lower-risk spots to let players experiment with abilities coaches were working on with them. When future All-Star Eddie Murray came up, the Orioles believed he could be a star defender at 1st base. They used him mostly at DH, however, because Earl didn’t want a fielding lapse to affect Murray’s relaxation at the plate.

Most baseball organizations are too impatient to use the O’s formula. And most suffer the consequences of crushing the confidence or overusing the arms of young pitchers in their rush to get immediate payback on their long investment. It's the same in business: When non-baseball organizations get someone new, there’s a strong temptation to throw them into the deep end. It’s easier to pretend it’ll all work out than to build a plan to integrate the newcomer; besides, there’s the “new toy at Xmas” rush of wanting to really test out the newbie. But in baseball and non-baseball alike, there’s a high payback in smoothing new employees’ entry.

Who's willing to raise her hand and suggest a new employee failing at the low-presssure tasks is likely to succeed at the high-pressure ones? ¿If the new hire is failing at less critical taks, it's costing you less (time, grief, overhead, perhaps even cash) than if he was failing at more critical ones, so why not get new hires acustomed to the less-critical first?

TIP FOR MANAGERS #38:

Spot your new or freshly-promoted staff where they can succeed easily. It delivers higher returns from higher-performance attitudes as well as greater trust from their peers, leading to lower effort spent in team-building and higher output.

As you may know if you read The Halifax Herald or other, less important, news sources, Ted Williams' frozen head has been severed from the rest of his corpse. Ugly on a stick, as Joe Bob Briggs would say.

This high-camp turn of events originated when the player's son decided to freeze the superstar's post-mortem body (if a foetus is an "unborn baby", aren't we all just "undead corpses"?). The son, a failure in business, allegedly has been living off his dad's name and wealth and reputation (sounds like someone else we know and love), getting his pre-mortem dad to sign bushels of items the son could peddle as collectibles. So the suspicion is unavoidable that sonny's storage côup is part of a Splendid Splinter DNA heist that will result in people being able to buy Williams' DNA for cloning or cherry-picking. For a fee. Payable to sonny.

¿So what's that got to do with Organizational Dysfunction?

Five percent of organizations have what anthropologists call a "culture". Another 15% have something I call a "personality". And the remaining 80% of all organizations have neither. I know Corporate Culture is bandied about, but it's rarer than Steve Balboni stolen base. Culture is a template of shared behavior ranges with fuzzy borders: shared beliefs, values, customs, behaviors and artifacts that each generation transmits to the next through unintentional (mostly) teaching. It's also organic in the sense that it's ever-evolving, with good days and bad days. It's also a survival machine -- it "knows" how to evolve in the direction of survival behavior, and tends to do so.

Most organizations don't have ranges of acceptable behaviors with fuzzy borders. Big ones tend to have codes of conduct, made explicit through manuals. If it's not in the manual, then either people don't know what the code is, or there's a manager trying to impose a local code, like an early 20th century Chinese warlord, based on his own individual standards. Little organizations, if they've been around long enough, can achieve a culture, if the owner/boss is emotionally healthy. But that vast majority of organzations without cultures just drift about lurching suddenly, or amoebically oozing in the direction of whatever behavior fulfills apparent needs at this instant, or alternatively, trying to cope with a changing environment by trying not to change at all. Both are pretty dysfunctional.

In organizations with "personalities", everyone uses a cult hero or founder or current CEO as a set of DNA to clone. At Microsoft Corp., a place I worked for a couple of years, people try to channel co-founder Bill Gates III. Mid-level managers generally make decisions by asking themselves, "What Would Bill Do?". A personality has more centripetal force than nothing at all, but it's intrinsically brittle, monocultural, unable to incorporate a range of behaviors. When Gates III retires, there'll be a war between employees who want to freeze his (executive virtual) head so they can keep going back to the Oracle of his wisdom, and the new executive structure that will want to fix what they know is limited in the "What Would Bill Do?" response.

In baseball, it's really unlikely that anyone could use Ted Williams' DNA to clone organisms w/any greater chance of success than any random child born in a first world country from a couple of average parents. Too much of what made Williams' skill so extreme arose from his life experience and an intuitive-thinking personality that drove him to observe and build models of how to hit a baseball. Crikey, Williams couldn't even teach his major-league teammates how to hit with his style.

In business, you can try to extract DNA from the head man (pun intended) to clone. It's good for your immediate job security, but it'll guarantee the organization will have that much more ineffectiveness in evolving in response to new situations. Effective organizations have ranges of behavior and plan for the future; no frozen head can do that.

A friend who read yesterday's entry and a part of my book suggested that before I go much further on down this road, I'd better lay out how Change fits into my grand design.

In baseball the team that wins is the one that scores the most runs. To score a run, you have to touch safely at each of the bases and you have to do it in order: 1st base, 2nd base, 3rd base, and finally, return to where you started, home plate.

In management in your organization, too, there are four sequential stops, four bases that form a diamond. To truly succeed, you must achieve mastery of four skill sets: operational management, people management, self-awareness, and managing change. As in baseball, you can’t skip a step. If you don’t touch a base on the way to the next one, you’re likely to fail in your goal of being a good manager.

First base is operational management, the set of skills that embody what most experts describe as management: controlling time, resources and budgets; defining strategies and tactics; and execution. A manager can’t succeed without being good at these first, but one who stops at first base cannot be a true success. In my experience as a management consultant, I've found about 45% of managers safely reach first base. It takes other skills to move forward.

Second base is people management. That’s knowing how to find and hire the right people, how to understand employees’ individual strengths and weaknesses, how to use their talents and ameliorate their weaknesses, how to motivate them individually and as a team, how to reprimand, and how and when to fire them. I've found about 20% of managers safely reach second base.

The diamond’s third base is truly a ‘hot corner’: managing oneself and the challenge of transcending one’s personal emotional and intellectual tendencies in the quest for effectiveness. Managing oneself also means finding a balance between acting and being true to yourself, to achieve what your employees and organization need to succeed. It also means managing your own career. I've found about 12% of managers safely reach third base.

Home plate, the holy grail in management accomplishment, is managing change. In an unchanging environment, even a total bozo can keep his head above water by imitating others’ successful strategies. But managers need to understand what change really is, how it happens in organizations, how to adapt to it, and how to initiate it. I've found about 4- to 5% of managers safely reach home.

I'll be adding tips & methods for all the bases, and unlike the book, my weblog entries won't be in the sequential order of the bases.

ALSO

Thanks to Baseball Primer, I found a very solid newspaper mini-bio by SABR member Bill Deane on Earl Weaver (Ignore the title; the Daily Star's copy desk screwed the pooch on the headline). Earl got me started in the right direction on this Management by Baseball work, and, contrary to the common folktale people tell about him, he showed me nothing but helpfulness and shared his great ideas with me (admittedly gruffly, but who gives a spit when a measureable proven self-made success is willing to answer all your questions completely) when I was a baseball reporter and quote man for AP and UPI. Of course, I wasn't a !#@*# umpire.

Weaver should be on Mt. Rushmore.

The only thing constant in the universe is Change; It is constant only in that Change changes unpredictably -- paraphrasing Anaximander

Change is the greatest challenge to managers. Fewer than 5% master change, yet mastery of change is the total "E-ticket" for making a difference.

Managers can win, briefly, without embracing change, either because (a) they were lucky, (b) mastered some small details that the environment was rewarding at the moment, or (b) because they rapidly acted on good observation before the system could change out from under them. Rob Neyer's article "Angels' rise was surprise, but downfall is not" is, I think, describes an example of (a) and (b).

Here are the key points of his piece (go read it...I've vivisected his piece for brevity):

In 2002, the Anaheim Angels won 99 games during the regular season, and then they won the first World Series in their 43-season history.
In 2003, the Angels are 56-64 and in moderate danger of finishing last.
<snip>
A year ago, the Anaheim Angels scored 851 runs, fourth in the league (and only eight runs behind the Red Sox, who were second). They did that, mostly, with a .282 team batting average that was five points better than anybody else. The Angels were 11th in walks and 10th in home runs.
At some point or points, I wrote that the Angels wouldn't repeat their scoring success in 2003 unless they drew more walks and hit more home runs, because an offense built upon batting average is a house of cards.
<snip>
Well, the Angels are making me (and Joe Sheehan, who made exactly the same point, in more and better detail) look like a genius. They're 11th in walks (again), seventh in home runs (just barely) ... and 11th in runs scored. Why? Because while they're not drawing more walks or hitting more homers, they've dropped from No. 1 in batting average to No. 10.
The biggest differences?
Last year, David Eckstein batted .293; this year he's batting .255.
Last year, Adam Kennedy batted .312; this year he's batting .268.
Last year, Scott Spiezio batted .285; this year he's batting .256.
Last year, Darin Erstad batted .283; this year he's batting .252.
Last year, Benji Gil batted .285; this year he's batting .192.
<snip>
Should we have known that each of these players would do what they've done? No, not exactly. But each of them did play better last season than we might have expected, so we might have predicted that each of them would decline somewhat this season.
Should we lay any of the blame at the feet of general manager Bill Stoneman?
Sure. If the Angels were winning, we'd give him some of the credit. They're losing, so he deserves some of the blame.
One of these days, I'm going to compose Rob Neyer's Laws of Baseball. One of them is, "There's no such thing as a pitching prospect." (I didn't invent that one, but I'm going to co-opt it.) And another is, "You should never think you're good enough."
Bill Stoneman thought the Angels were good enough. When I talked to him last March, Stoneman expressed regret that he didn't have exactly the same 25 players that won the World Series last October.
His exact words? "I wish we were more the same."
<snip>

And because of individuals' variability and an ever-changing rate and direction of change, in baseball, as in any organization that operates in a dynamic environment, stasis guarantees slow death. I'm not an advocate of the grow-or-die cult; there are as many environments that reward focused smallness as reward lumbering behemoths, and organizations should change size and departmental ratios in response to changing markets if they want to optimize productivity. And if the organization is perfectly, absolutely tuned to the immediate environment (like insurance companies who optimised on the Clinton Years' high stock-market returns to subsidize policies and undersell the competition) it will struggle to survive, even with billions of dollars of cash flow and book value.

Peter Drucker, in a consult to a tool company, was told by their executives that the firm's drill bits were improving in quality and declining in price and yet their sales were going down consistently. After exploring the drill bit marketplace, Drucker says, he came back to the company and told them "Customers don't buy 1/4 inch drill-bits, they buy 1/4 inch holes", his zen saying that meant the company was so focused on the repetitive mechanics and tactics of what it was doing so well, it forgot what business they were in. As times change, the environment changes, and if you define your business as sub-components, even great sub-components, the environment will slowly move away from your business.

Stoneman fell in love with his great players (components) that brought the Angels their 1st-ever World Series victory, and forgot his business was fraught w/change. Stoneman's quote is the perfect mantra for a slow (in this case, fast) dissolution. Managers' change decisions have mechanical components and require some forecasting and more than anything else require not overoptimizing...creating a Soviet Five-Year Plan and expecting the 5th year targets to be as accurate as the 1st or 2nd years'. You allow slack for inaccuracies, and you set up mid-course corrections.

I know most of the insurance companies that used investment income to subsidize policy prices either didn't have a contingency plan in place or had one but didn't have the organizational courage to keep them from belly-flopping into the pits of financial torment. They forgot what business they were in (the insurance business) and drifted into the "making money off float" business, like really-big-time check kiters.

So scary, so avoidable, so frelling typical.

Part Two -- The Seductions (& Giant Sucking Sounds) of Metrics

As I mentioned yesterday, in business endeavors w/quantifiable results (manufacturing and sales, for example) there's a near-erotic fascination with "metrics". Sadly, too many of the folk who create them are not numerate. Those who have a "tin ear" for numbers are likely to grab onto metrics with their eyes closed, clenched tight, ignoring the realities, in favor of the numeric artifact that is a shadow of a dream of a reflection of reality.

The larger the organization (business, government, non-profit) the more the metrics are institutionalised, embraced without serious examination.

Seduction #2: One Size Fits All -- Dodger Stadium & Environmental Permits

Most people with management responsibilities who try to use numbers to support their evaluation of performance fall back on the simplest schemes they can. Many of them are not numerate and most are overworked (or lazy enough to behave as though they were), so it's simplest for them to embrace wholly a single number.

Baseball front-office types allow the one-size-fits-all mentality to undermine the usefulness of undermine their ability to evaluate player performance. Here's how.

Each ball park has a set of factors (including distance to fences, altitude, relative humidity, prevailing wind direction and strength) that affect performance of players. The Colorado Rockies' park amplifies run production (more for left-handed hitter than right-handed), and because baseball statistics are like double-entry accounting, this both increases apparent hitter proficiency and diminishes apparent pitcher proficiency. For a few years, before other teams' front-offices caught on, the Rockies were able to trade away hitters with fab-looking numbers that pretty quickly faded when they were no longer playing half their games in Denver.

Here are a pair of examples where you can compare hitters' Colorado output and what happened after: Jeff Cirillo and Dante "The Inferno" Bichette. It's not universal...there are some players who did as well not playing for the Rockies, but most of them were not-good in either setting.

The Dodgers' stadium has the opposite effect, draining run production and making the pitchers look good & the batters look weak. For a long time, the Dodger front-office seemed to be ignorant of this (remember that this was the team that in 1993 traded the most excellent contemporary pitcher, Pedro Martinez, for a never-was infielder), though they know now how their stadium affects the performance of average players.

You have to evaluate baseball numbers in context. Having an ERA of 3.00 playing your home games in Los Angeles is a humongous difference from having the same ERA playing your home games in Denver. The average baseball front-office is just starting to catch on to this, though non-baseball organizations have an awful time with this concept:

It's all about context.

I worked for a consulting firm that was doing work for the U.S. Environmental Protection Agency's division that handled enforcement of water discharge regulations. Each of the thousands of major facilities that discharged into waterways received a complex permit with many specifications, and then was responsible each reporting period, to properly fill out a form for each individual outfall pipe indicating what they were allowed to discharge and then what they actually had discharged. It wasn't working well because people unintentionally, or less frequently, intentionally, filled out the forms incorrectly. To oversimplify, the project was to take the thousands of permits and codify them so a computer would pre-print a report with everything printed correctly according to the permit's specs (except the current results, which were entered by the responsible person at the facility). Permits ranged from the tiny Peever, South Dakota sewage treatment plant with one outfall pipe and a six page permit, to the largest paint & chemicals factory in the world, National Lead in the St. Louis area, which had 17 outfalls and dumped dozens of chemicals, including hydrochloric acid, lye and mercury, and a permit so massive it made a Tolstoy novel look like Pat the Bunny in comparison.

There were about eight of us performing the codification of these permits, translating complex regulatory and chemical and biological data onto forms the computer could transform into the printed reports. The consulting firm had a contractual responsibility to measure group-wide and individual "performance" (a term not defined in the contract). The consulting company behaved as though it was venal and stupid. They decided to evaluate "performance" as how many permits per day you codified. Ignoring context, they gave you incentive to take the small simple ones and shirk the big, complex ones. In addition, because quality was not part of the criteria, a couple of the coders sped through permits that needed close attention.

Their payback? Everyone grabbed for the easy ones, increasing our output in the present, making it look like we were way ahead of schedule. The Consulting firm, not understanding what they hath wrought, reported to the EPA that we were way ahead of schedule and asked for a bonus. The EPA audited and, seeing what work had been done and what was left to be done, thought the company was trying to pull a fast one on them. And the audit discovered a higher-than-expected error rate.

It's all about context.

So later, when the EPA dumped the consulting firm, the group of us codifying formed our own company and bid for the rest of the job. I instituted a pay-for-perfromance system that had a low base and a high bonus based on a context formula that took into consideration quality, difficulty of permit and, yes, quantity. Our error rate was 54% lower and our volume (quantity) was 29% higher per hour.

But most big organizations won't consider context in their metrics. It's more work, and most managers feel (some rightly) they won't be recognized for creating better metrics.

In business endeavors w/quantifiable results (manufacturing and sales for example) there's a near-erotic fascination with "metrics". Measurement with numbers is a great idea I endorse thoroughly, but too many of the folk who create them are not numerate. Those who have a "tin ear" for numbers are likely to grab onto the most measureable factors or the most well-known numbers or the most obvious (the most obvious are usually the most well-known).

And those numbers frequently are JPI (just plain irrelevant), sapping the organization's mojo and torque in a myriad of ways. One of the most obvious endeavors where this happens is baseball, which is a clear baseline example from which all businesses can learn.

Seduction #1: Measuring the Measureable -- Radar Guns and Gross Sales

Many people fall back on simple numbers to justify their decisions. One can avoid resposnsibility this way...if it doesn't work out, one can say "The numbers were such and such; who'da thunk it wouldn't work out?!". Such managers grab for that-which-can-be-measured when the full picture is complex, requiring pattern-recognition. Take baseball scouts' passion for radar guns. One of my pseudo-godsons, The Big Train, got a small chance to pitch for scouts at one of those mass meat market tryouts. He told me how the stadium scoreboard flashed the speed gun numbers three times the size of Vishnu and that, wierdly, many of the scouts, instead of watching the kids pitching just watched the scoreboard printing a numeric artifact transmitted from an electric appliance notorious for its inconsistency and imprecision.

Ryan Metcalfe recently wrote an article called "Radar Love: Baseball's fascination with speed diminishes chances for crafty young pitchers" for the Marin Independent Journal that was referenced at Baseball Primer.

To excerpt the essence of his piece:

Major League Baseball is replete with successful pitchers who throw below-average fastballs or are less than 6 feet tall. In fact, some of the most successful active pitchers - Atlanta's Greg Maddux, Seattle's Jamie Moyer, the Giants' Kirk Rueter, the New York Mets' Tom Glavine and Anaheim's Aaron Sele - rarely, if ever, break 90 mph on the radar gun.

However, not many scouts are looking for the next Rueter or Maddux, nor are their general managers asking them to. The scouts carry their radar guns and rarely send back reports on pitchers who throw slower than 90, and teams continue to draft kids who throw 95 but don't really know how to pitch.

"There are a lot of guys out there that don't throw 90 or even close to 90 and they get people out," said Giants announcer and former pitcher Mike Krukow. "I think those kind of guys should get a better look because if you can get people out, how you get them out doesn't matter. (A's reliever) Chad Bradford doesn't throw 85. Kirk Rueter doesn't throw 85 consistently, but his winning percentage is phenomenal. If you were looking at Jamie Moyer, you wouldn't sign Jamie Moyer. If you were the scout who recommended him [JA note: and he failed], you would probably lose your job, yet he is one of the most proven winners in the league.

The challenge is that prospective pitchers come with only two clearly measureable differences: pitching speed and height. And while both of these are advantages in pitching performance, neither is a giant factor once a hurler achieves a certain minimum (Height seems to be a long-term deficit at some point; I don't yet have publishable data, but I'm working on a study of major-league longevity by height, and early indications look like guys above 6'4" are more injury-prone). And it's true that pitchers who master high-speed pitching (and have some control and another pitch they can throw for strikes) are more effective in both the short-term and the long term as a composite average. But as Metcalfe points out, there are plenty of very successful guys with long careers who don't have either of the easily-measureable metrics. But no scout ever got fired for touting Ryan Anderson, a 6-foot-10, high-90s fastballer who struggles with control and is as fragile as a frog your science teacher just dipped in liquid nitrogen.

Scouts exchange quantity of good prospects signed in exchange for the CYA metric.

In business we see this all the time.Take sales folk. Most usually, their commissions and/or respect are measured by the most easily-measured metric: gross sales. Most sales folk working within this structure will focus on selling the most gross dollars, ignoring net margins (the actual life's blood of a for-profit organization), consideration for the customer's needs (the long-term viability of repeat business) and the strategic importance of the particular products sold (the long-term health of the company).

Most businesses could devise incentive systems that rewarded net, repeat business and tweak commission percenatges based on how important individual products were to long-term strategy. And because sales folk tend to be very good at "working the system" of commissions, a company would be creating a gravitational field towards health and away from dysfunction justified by a simple number.

Most companies won't. They're too busy looking at the big scoreboard with the speed gun numbers to notice what it takes to make a winner.

The only thing my father & I have in common is that we're completely different -- Dale Berra

I got a terse note yesterday from a surfer I'll call "Manny Sanguillen" for reasons that will become obvious to fans of the former Pirate catcher. Manny asked a solid question, though it was phrased as a percussive comment, and in a tone I have to describe as pointlessly hostile.

Sanguillen wanted to know why he should be interested in Management by Baseball since it was merely derivative of the writing Michael Lewis had done in his hot book Moneyball. So Manny, here's why: because to paraphrase Dale Berra, the only thing Moneyball & Management By Baseball have in common is they're completely different.

The thesis (non-explicit but totally obvious) underlying Moneyball is "Everything Baseball Needs to Know About Franchise Management, it Can Learn From Wall Street". It applies lessons Lewis has learned in his years as the Western World's finest and most readable insider financial journalist. The book takes those lessons and shows how a small (but growing) cadre of youngish professionals have taken those lessons and used them to squeeze value out of resources that others undervalue, all driven by their own lack of resources. Lewis doesn't know a ton about baseball, but, extra-bright guy that he is, he learned a goodly amount while working on the book, easily surpassing the average fan's understanding. So how's Management By Baseball different?

The thesis of my work, about 170 degrees away from Lewis', is: Everything You Need to Know About Management You Can Learn From Baseball. It applies lessons I learned as a baseball reporter and management consultant. The work takes those lessons and shows how people can become better managers in any kind of organization by applying lessons learned from the National Pastime.

Some of the people I interviewed for my work had already talked with Lewis. Perhaps Lewis interviewed some people I had already spoken with. So Manny, we're pretty different...bearing just about opposite takes on common subjects.

Having said that, if you haven't read Moneyball yet and you want to learn many gripping things about the way teams scout and acquire players, do succession planning and manage resources, as well as get some gossip on some current baseball people off- and on the field, I strongly urge you to buy it & read it. It's both insightful and fun.

Oh, and if you haven't figured it out yet, I called my vicious note-sender "Manny Sanguillen" because the Pirate catcher was notorious for taking a vicious swing at virtually every pitch thrown near him. Our Manny is one of those surfers who can't pass on taking a vicious swing at anything he reads.

The actual Sanguillen once swung at, and connected with, a pitch after it had bounced in front of home plate, on the hop. This may be apocryphal (baseball reporters sometimes make up quotes when they don't get good ones, and they don't get good ones very often), but when asked by a reporter after that game why he'd swung at a ball that had bounced already, Sanguillen allegedly replied he only laid off pitches after they bounced twice.

Take how we hire talent in the late 20th- and early 21st centuries. What’s the environment? Mainstream U.S. economic wisdom holds that we’re exporting unskilled jobs to lower-pay labor markets and that’s allegedly great because we’re growing skilled jobs here. Those skilled folks will benefit additionally because lower-pay labor will produce goods for Americans at lower cost, so we’ll be earning more and paying less.

Skilled people, by definition, know how to do something valuable. But universally, organizations strive for "at will" employment, where the employer may discharge the employee at any time without cause, without notice, and generally without a golden (or even tin) parachute. In exchange, the employee may resign at any time without notice. “At will” is a rational hiring model for low-value-added, commodity business with a dynamic labor pool, like seasonal farm work. They need pickers, but only for a short period, and the skill differences among workers have little effect on product quality or quantity. In a fair market, pickers and growers will adjust prices to find efficient pay for work. The at-will ability of the picker to pack up her machete in the middle of the day and move to a better-paying spot, or for the grower to give the ax to lower-performing workers if good weather stretches the time for harvest, lubricates the efficiency of a fair market.

With skilled jobs, though, why would we hire people at will, a strategy clearly meant for fungible jobs? Baseball doesn't.

Synchronistically, “at-will” was invented by Horace C. Wood, a creative legal scholar, within a year after the founding of the National League in 1876. Baseball, cleverly using a system that's 180 degrees from "at-will", signs the talent to contracts with specific duration, because, like reliable Java programmers, competent project managers, creative accounting whizzes, smooth salesfolk, or the members of ZZ Top, major leaguers are skilled employees. They are, in baseball management’s opinion, the best 1,200 people in the world at what they do.

When an organization spends $35,000 looking for, finding, interviewing, selecting, and making an offer to a person they hope will be one of the best 1,200 Java programmers, why does it strive to work out an at will set-up with her? Look at it rationally. You hire someone with special talents. In exchange for the potential benefit of laying them off in a downturn or when stock analysts need to be fed a bit of ledger de main, one surrenders control over their efforts. The cost of leaving is not just in recruitment, but in knowledge walking out the door. The company can count on training the replacement, leading to lower initial productivity and schedule slippages. Even the creative accounting geniuses at Arthur Andersen can’t tell how much this costs.

Baseball knows, though. In 1876, baseball was reeling from five years of labor chaos. Skilled players moved from team to team in response to offers of better pay, or the chance to play alongside better teammates, or in front of more fans. In 1994, American employers were reeling from the effects of skilled employees changing organizations at the drop of a bat to garner better compensation, more interesting work, or better chances to build skills. In both eras, executives were ballistic about skilled labor instability.

In baseball, the solution was enforceable contracts. This solution worked for the owners for almost 100 years. In business, the “solution” was… at-will employment? This solution failed completely for employers. It made the situation worse until the skilled-sector economy crashed in 2001.

Great managers take advantage of others’ counterproductive compulsions. Ex-Cleveland G.M. John Hart recognized one of these compulsions and revolutionized baseball personnel patterns, advancing even beyond the enforceable contract model. Before Hart, teams acted uniformly. Bring up a prospect. Keep his salary as low as possible for three years until he’s eligible for salary arbitration. Pay goes way up. At six years he becomes a free agent. Pay goes way, way up. Let him go. Now, you’ve lost half the player’s highest-skill years to another team, and you need to find and pay for another guy.

The Indians’ front-office, however, invested in a smokin’ farm system, generating a lot of fine young players. Then they short-circuited the cycle, signing players to longer-term contracts before arbitration, essentially capturing talented players’ best years.

Baseball teaches us to sign talent to contracts of fixed duration and dump the dysfunctional “at will” delusion.
Follow your Hart, scrap your Wood. Organizations that have employees that represent hard-to-replace (or expensive-to-replace) value should sign the talent to enforceable contracts. There' are side-benefits to this approach, too, but you've already guessed what they are.

ALMOST EVERYTHING I NEED TO KNOW ABOUT MANAGEMENT,
I LEARNED FROM BASEBALL

What's this about?

• How do you start an organization from scratch?
  Take a page from baseball’s 19th century origins.

• How do you adapt to changing markets and social conditions?
  Learn from the man who invented Babe Ruth.

• What are the simplest ways to turn around a weak department?
  Pick up Dick Williams’ proven tactics.

• How do you redesign corporate strategy in response to your competitors?
  Learn Joe Torre’s secret advantage.

Managing the Mechanics

Managing Talent

Managing Yourself

Managing Change--and Driving It