Sunday, May 30, 2004

The New York Mets Confront
the Diseconomies of Scale  

As an organization grows arithmetically in number of employees or functions it has, the diseconomies of scale attack them. As they grow, the diseconomies' symptoms grow at a rate significantly higher. This is why in truly competitive systems, small businesses, school classes with small numbers of students, small government agencies & small military units tend to outproduce their bigger analogues. One of the key diseconomies is the increasing centrifugal force that acts against any one person holding enough knowledge to optimize decisions.

Baseball has some good examples of the challenge of knowledge management in a complex organization.

Over time, functions tend to get specialised, and cooking up multi-functional or multi-disciplinary teams (the kind of groups that tend to produce bigger innovations or important observations), becomes much harder. Ask the New York Mets.

According to a throwaway line by the baseball columnist in one of today's New York dailies,

The Mets are putting so much stock into pitching coach Rick Peterson's opinion
they are actually having him look at tapes of potential draft choices.

They actually are? Jeez, what a revolutionary idea.

It's about time. Peterson was hired during the off-season, replacing former Tiger & Astro swingman Vern Ruhle. The inference from the report is that Ruhle wasn't consulted on potential draft choices.The story doesn't explain, nor do I know why, Ruhle was uninvolved, whether he was uninterested, or too busy, or the Mets thought the big club's pitching coach wouldn't have anything useful to say, or if the Mets just didn't respect Ruhle's opinion in this area. (If it was a disrespect for Ruhle's opinion, I suggest the he shouldn't have been the big club's pitching coach in the first place -- the organization should have hired someone who could have added a useful opinion.

It's pretty obvious there's no-one better positioned to observe micro- and macro trends in major league hitting and pitching than the big club's pitching coach. He doesn't have to distribute his attention to the myriad of occupations the manager does, has half the personalities (just the pitchers and catchers) to deal with, and is more an observer than a decisionmaker on in-game decisions. The pitching coach's rĂ´le leaves more energy to devote to basic observation & applied research.

And, of course, while engaging the pitching coach in scouting decisions may be new to the Mets organization, it's not unusual in baseball. The middle 1950s Paul Richards Baltimore Orioles and their two decades of pitching prospect dominance were built on multi-functional teams, cross pollination of observations and feedback loops designed to get the knowledge of what was going on in the big club's ballparks into a medium that the scouts and minor league coaching staffs could absorb and make actionable.


Beyond baseball, the model the New York Mets just replaced is the more typical one.

When the whole organization fits into a pair of connected rooms, (most always) everyone knows everything important that everyone else knows. It's an extraordinary small organization that doesn't. As you add people, office space, more specialized job descriptions, this starts to come apart quaquaversally. The natural reaction is to throw meetings or memos at it, both of which, even when they work, attache a ton of overhead to that which was effortless at a more appropiate scale.

In the practice of knowledge management we try to address these problems by throwing procedures and sometimes technology at them, and if the organization is both willing and capable of being healthy, we can achieve significant gains, though never (yet) with the magical overhead-less smoothness of the small organization. One of the things you can always do is cross pollinate knowledge formally and let everyone know this is intentional.

If you have problems, consider this recent New York Mets' initiative, and use it as a pattern:

  1. Pick out your most irritating problems.
  2. Checkmark the ones most amplified by lack of uniform knowledge across departments or the whole organization.
  3. Build a cross-disciplinary connection between what's really going on (operational people; in the Mets' case, the pitching coach), and the strategic or other upstream departments (in the Mets' case, the scouting/drafting function).
  4. Give them incentive to succeed.

This approach, if you execute it properly (which is going to be different in each individual organization), will always have some returns. It won't solve every problem, but it will put it in a spot where you can better define its roots and, therefore, have a better chance to attack it successfully.

The Mets are in a great position -- with the New York market to tap into if they succeed they have tons of incentive to be successful, and they have a poor recent track record. Given that combination, it's harder for entrenched specialists to stand in the way of an initiative like this. But even if you have entrenched opposition, it's time to channel Sal "The Barber" Maglie or his kinder/gentler descendant Pedro Martinez, and throw the brush-back pitch, and reclaim home plate.

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