Management by Baseball

Sometimes you do a terrible job. But sometimes, a terrible job does you. Most executives can't tell the difference.

The existential nightmare I once had was: I woke up and I was Mayor of Basra, Iraq. I'm very self-cofident about management situations; I know only four people I'm confident are as good or better than I am. But Basra -- that's different. The waking reality is the city wasn't rebuilt from the shellacking it took in the First Gulf War before the additional damage it received in the Second War on the Iraqis last year. Electricity is not restored. The water/sewage systems are shaky...on their best days. Public health system, a shambles. Police and fire service, a joke. Supplies almost non-existent, and tax revenues in the toilet because the people with any wealth to tax are also the most well-armed. The country's mortal enemy, Iran, a nuclear powered, oil-rich nation run by wacky religious fanatic TaliBaptists, just a few leagues away. Some of the residents are heavily-armed and fellow-believers in the whacko religious beliefs of the mortal enemy. And the main difference between the Basra Mayor job and managing the lowly Montréal Expos (owned by the men who own the Expos' daily enemies, and a franchise being resource-starved intentionally so it can be a human punching-bag for those rivals), is when the Expos fail, no lives are ruined.

Sometimes life works out the other way, and you get to have a job in a situation where everything is aligned to make you successful: good staff, decisions made before you got there that are bearing fruit now, an economy like in the mid-90s that put a stiff tail-wind behind most every effort.

Baseball has wonderfuly clarifying examples of this effect.

THINK GLOBALLY, BAT LOCALLY

If you want a tail-wind, something that makes you look good, be a company that has domestic oil reserves right now. The crude lurks underground, you own it, and the price trend is going up. You don't have to do anything fancy, you just sit on it and your value swoops up. Call it the Vinny Castilla effect.

Mr. Castilla is a nice ballplayer who looks like a minor diety. Instead of sitting on untapped crude oil, he hits about half the time in Denver, Colorado, where thin air dampens the break on breaking pitches making them easier to connect with, and thin air more lightly resists the flight of well-hit balls. When he plays in Denver, his OPS is about 1.170, like Barry Bonds in a pretty good season for him. When he bats outside of Denver, his OPS is about .660, about 12% below the league average. Here are his full 2004 split statistics that contrast his performance between his home games and his away ones.

It's a little unfair to compare Castilla to the companies that own domestic oil reserves, because he's a pretty good ballplayer -- just not as good as his consolidated stats make him look.

Of course, baseball is a zero-sum game. For every batter bludgeoning balls from Bali to Brussels, there's a pitcher in pernicious peril. Denny Neagle was a perfectly fine pitcher who had the self-confidence to sign a long-term deal with the same Colorado Rockies Castilla plays for and it melted down his career, not only qualitatively, but quantitatively because trying really hard to succeed in that environment put unusually high stress on his pitching arm (not to mention his ego).

I haven't yet had a dream that in waking life I pitched for the Rockies -- and with luck, I won't.

But employee performance is something you should always put in context if you want to see achievements with any accuracy. The salesman who kicks booty because his region has better customers or a better regional economy, the plant that has newer, better equipment, the vineyard that got great weather are all examples. The good and the poor are both affected by outside forces you need to normalize your perception of performance.

TODAY'S TAIL-WINDERS AND FALLING-TIDES VICTIMS

When you evaluate your staffers performance, or your own performance is being evaluated, you don't always have the benefit of clear-headed metrics to put your achievements in context. Baseball does. Thanks to Baseball Prospectus, we have the Pitcher's quality of opposing batters report. That report gives us context on pitchers performance by pointing out which moundsmen have faced competition much higher or lower than league average. Who's been lucky so far and who hasn't? As of this morning:

Twelve pitchers who faced the most challenging hitters
(hardest on top)
NAME------------ TEAM PA--- AVG --OBP --SLG
Jeremi Gonzalez --TBA 166 0.278 0.353 0.464
Chad Gaudin ------TBA 108 0.277 0.354 0.445
Jose Contreras ---NYA 214 0.273 0.347 0.452
Doug Waechter --- TBA 214 0.272 0.349 0.449
Lance Carter -----TBA 129 0.274 0.351 0.443
Rob Bell ---------TBA 120 0.273 0.348 0.446
Vic Zambrano -----TBA 392 0.273 0.350 0.442
Jamie Walker -----DET 117 0.273 0.347 0.445
Paul Abbott ------TBA 222 0.274 0.352 0.440
Gil Meche --------SEA 208 0.275 0.350 0.440
Brian Anderson ---KCA 323 0.271 0.349 0.438
Kerry Ligtenberg -TOR 115 0.274 0.348 0.439

Twelve pitchers who faced the least challenging hitters
(easiest on top)
NAME------------TEAM- PA---AVG---OBP---SLG
Victor Santos ---MIL 229 0.246 0.312 0.374
Al Leiter -------NYN 236 0.246 0.313 0.382
Tyler Yates -----NYN 173 0.247 0.310 0.388
Randy Wolf ------PHI 268 0.244 0.313 0.386
Eric Milton -----PHI 324 0.246 0.312 0.396
Jay Witasick ----SDN 146 0.246 0.315 0.393
Andy Pettitte ---HOU 157 0.245 0.319 0.392
Horacio Ramirez -ATL 253 0.248 0.319 0.393
Wayne Franklin --SFN 106 0.249 0.316 0.399
Tyler Walker ----SFN 109 0.255 0.320 0.394
Doug Davis ------MIL 386 0.255 0.321 0.394
Matt Riley ------BAL 123 0.251 0.322 0.394

If you were planning on evaluating these staffers, you'd use this kind of data to adjust the traditional metrics they're measured by.

It's the same outside baseball. Just as Prospectus' staff thought up this way to help evaluate and adjust individual performance, you should be thinking through ways to measure the context against which individuals are performing.

That might be time-series data (how did the unit perform before individual was there as opposed to now?), daily contrast (how does their unit perform when each individual contributor is not there relative to times when they are?) It's going to be different in each endeavor, but my clients and I have been able to build measures that have some value in every case, and I believe it's possible in almost every endeavor.

I'm not telling you it's easy to do. Only that it's completely necessary if performance matters to your organization. After all, even your highest performer would look like an abject failure if she was Mayor of Basra.