Management by Baseball

If a nation values anything more than freedom,
it will lose its freedom.
The irony of it is that if it is money or comfort it values more,
it is destined to lose that, too.
-- W. Somerset Maugham (1941)

Comfort is the greatest enemy of successful organizations.

That's understandable. "If it ain't broke don't fix it" is not only a pandemic nostrum, it makes some practical sense, and that makes it more dangerous when fixing is necessary. It's always easier, extremely-so in larger organizations, to just do whatever they do the way they already do it. So success breeds comfort with the status quo in process and strategy, that in turn creates an inertia field.

The irony of it is that comfort with the process and strategy status quo also affects unsuccessful organizations, and the larger they are, the more likely they are to be trapped by it until there's a resulting cataclysm. Amazing, or as Vizzini says in The Princess Bride, "It's INCONCEIVABLE".

But conceivable it is, and there are wonderful examples in baseball that illustrate the process. For decades, the poster children for the odd recombinant mix of comfort and lack of success were the Chicago Cubs and the Boston Red Sox. What the teams shared were home stadia that significantly enhanced the probability of certain kinds of offensive events over a long season, that, in turn, created distorted batting and pitching stats for many team players and the team as a whole. So when the teams failed to achieve as highly as they thought they should, management looked at the numbers, underestimated (or perhaps even ignored) the way the context of home stadium factors distorted "reality" as measured by the statistics, and then got comfortable with what they should have been uncomfortable with.

According to Anthony Giacalone's Looking Forward to 2004: Texas Rangers team overview in Baseball Primer, the Texas Rangers are following this pattern, this amazing, counter-intuitive Bizarro-Superman World weirdness. As Giacalone writes in this really informative piece (read the whole thing for an insightful analysis of the entire Ranger roster):

Bill James once wrote that we need to start with two premises when dealing with parks like The Ballpark at Arlington, or like Wrigley and Fenway used to be: one, these parks distort the records of their players, which is generally known but universally underestimated, and two, teams that play in these parks pay for believing everything which is not true. "Park illusions," James elaborated several years later, "create unequal and misplaced pressures upon teams and players, which in the long run yield results which are precisely opposed to the characteristics of the park." A team like the Rangers, which plays in a great hitters’ park, will always score runs no matter how good their offense is. So, over a period of years they will not address their offensive needs, allowing their offense to slip into mediocrity. Conversely, their mediocre pitchers, who might put up league average ERA in another park will tend to have an ERA in the 5.00s in Arlington and will quickly be replaced. [snip]

The conventional wisdom about the Rangers, even among stat-friendly analysts, indicates that we haven’t come very far in the last quarter century. The Rangers were fifth in the league in runs scored in 2003, better than two playoff teams. However, their pitching was dreadful – dead last and a quarter of a run worse than the next worst staff. Ask any sportswriter, babbling SportsRadio pundit or bantering head on SportsTV and they’ll tell you that the Rangers can’t win because they have no pitching. Which is true, but only to an extent. The Rangers can’t win because they can’t pitch AND they can’t hit. In 2003 Rangers hit .246/.316/.405 on the road; in 2002, .254/.319/.416. That, my friends, is a bad offense, thirteenth in the AL in runs scored on the road in 2003 and better than only Detroit’s.

[snip] the point has everything to do with players like Shane Spencer (.176/.300/.255 on the road in 2003), Juan Gonzalez (.257/.307/.379 on the road in 2002) and Andres Galarraga (.221/.296/.377 in 2001 road games). The Ballpark at Arlington masks some really bad older players and allows them to muck up an offense for years. But worse for a team is the effect that a park like Arlington’s has on the evaluation of young players. Here’s an example. Michael Young may or may not end up being a good player, but the Rangers seem to think that he will and are talking about giving him a five-year contract extension. Why? On the surface he seems like a nice player. After all, he hit .303 with 14 homers last year. Unfortunately, those numbers are mostly an illusion, a refraction of his real talent viewed through the distorting prism of a offense-oriented home park. In his three big league seasons, Young has hit .227/.263/.345, .245/.287/.359 and .262/.291/.367. [snip] Hank Blalock hit below .190 on the road in 2002 and .262/.301/.435 while away in 2003. Last year Teixeira hit .217/.303/.343 on the road; Laynce Nix, .189/.223/.300. See? This park makes things very confusing. Everyone you know thinks that Teixeira and Blalock are can’t miss guys, but their road numbers are butt-awful.

[snip] And the pitching would be equally as confusing if the Rangers had any major league capable starters right now. Doug Davis, for example, is no great shakes but he sure was a lot worse in the Rangers’ home white that in their road gray. From 2001-2003, Davis posted a 4.18 road ERA in 209 road innings. Now there might be a lot of noise in those numbers and the Rangers might have been swayed by other things, but I can’t picture another team releasing a 27-year old lefthander while he was sporting a career 4.18 ERA.

BEYOND BASEBALL

Outside of baseball, I see this a lot.

A company struggling because of a weakness they can't see, a weakness masked by what appears to be success. I consulted to a high-tech company for a while that had the most incredibly productive R&D department I've ever seen. The company needed to change, because while results had been very good for years, the trajectory was changing, and sales people were having greater and greater struggles selling to the largest accounts. Because high-tech companies are driven by responding to or getting ahead of change, all the change efforts were focused on getting R&D pointed in the right direction, killing projects viewed as too creative (that is, seen as risky) and producing what the biggest, highest-buying customers thought they wanted.

In high-tech, of course, no matter how fast you move, by the time you actually release a product, the customer has usually evolved and usually wants something slightly, greatly, or completely different. R&D was not the problem.

The sales department was the problem. Totally. No one inside the organization could see this because of the environmental factors. First, in high-tech when you are successful and then your sales start to tail off, it's a "safe" assumption that your technology is no longer serving the market. Second, as long as the sales are rolling in (as long as the team is scoring 6 runs a game), it doesn't look like sales needs fixing. But the sales department was a mess masked by high sales volumes. The department head had a personality disorder. He liked (as employees) men much better than women. So when an account was developed by one of the departmental women, he'd transfer it to one of the men. It created discontinuity in the relationship-building with the purchasers at the big clients while undermining the women's ability to make money, and since most sales people are motivated primarily by money, this tended to offend the women, who tended to transfer, slack, or leave the company.

In addition, this sales department had, in spades, a distortion that is pretty common in sales departments: they listened too closely to their largest customers and not enough to their fastest-growing ones. Smaller organizations tend to grow faster than larger ones, and tend to be far more capable at absorbing change (in everything, including new technological approaches). So sales growth is easier to harvest from smaller, faster-growing companies that larger, higher-current volume ones. But it's easier for a saleswoman to make her numbers selling to Chrysler than it is to Smart Car (and the same is true for the department as a whole).

Both distortions fried the chicken that came home to roost.

Not only was the sales group not able to take good advantage of the growth area of the market, it was bringing back feedback exclusively from a handful of slower-growth customers with whom they didn't have tight personal relationships (because of the staff reassignments designed to help politically-favored appointees). The company was relying on salesfolk for gathering the information on which to base R&D's direction (tends to be a mistake, because this always guarantees a bit of backwards-looking, as opposed to forward-looking, bias). And the salesfolk gathering this info tended not to have built up a deep enough relationship with the buyer to get the buyer's most thoughtful and engaged response.

Comfort can undermine even organizations that aren't really succeeding, if the comfort is the result of context distortion. Just as the Cubs, the Red Sox, and the Rangers.