Management by Baseball

As a consultant, when I'm getting to know a manager, one of the first things I try to do is gauge where she or he is on the Opportunity <-->Risk Avoidance scale. Faced with a choice or crisis or sudden change of environment, the risk-avoider will try to minimize damage and try to re-establish the last satisfactory status quo. Faced with the same, the opportunity seeker will look to find what can be exploited from the situation.

I don't ask direct questions about it, mostly just derive it from other things we talk about or that I observe, and I usually have a pretty precise idea after a half-day of interacting with a group. The reality in big organizations is, there's not much of of a spectrum. The bigger the organization, the more established it is, the more likely it believes it has something to lose, the more risk-avoidant it becomes. The vast majority of managers in big organizations (business, government, etc.) will take a fairly extreme risk-avoidance position. Anyone who is halfway towards the middle from there will be labeled a "Bolshevik" (no kidding; at Boeing, this was the term used for non-extreme-risk-avoiders, albeit one used with a certain element of affection towards the individual), and their career trajectory was limited by their choice. If they never had a decision go "wrong", they could progress, but the first time it didn't turn out well, that was a Scarlet Letter woven upon their sternum. With the same decision gone "wrong", the risk avoider would not suffer so much. Classic CYA gravitational field.

There's an interesting factor at work though, a Commons. Because while any individual's net benefit in a big organization is usually higher avoiding risk than pursuing opportunity, the more risk-avoiders there are running the show, the higher the reward for the individual (or organization) that diverges and takes an opportunity-seeking path. In any line of business or governance or on the battlefield, the winners of the big victories are the opportunity-seekers.

Because being a mild opportunity seeker doesn't have a lot of rewards, there aren't many of them in circulation; the ones who pursue that naturally tend to either minimize their internal tendency or simply take the reins in their teeth and run full-tilt with it. The result is a "J" curve, somewhat like a bell curve turned upside down, and with one extreme bigger than the other.

The rookie General Manager of the Los Angeles Dodgers is Paul DePodesta, the actual protagonist of Michael Lewis' book Moneyball. DePodesta is an extreme opportunity seeker (if you read the book, you know this already).

As of last week, the Dodgers were in first place in their division by 3-1/2 games, cruising along as the 2nd winningest team in the National League. The risk-avoider decision-maker does as little as possible in that situation, nurturing the status quo. "If it is not in disrepair, do not call the repair person," as Louis XVI was reported to have said a week before his execution.

DePodesta, opportunity-seeker that he is, pulled off a couple of deals on his way to a third, bigger one, and now the Pastime's punditocracy has got its panties all a-twisted.

The Dodgers got a horse of pitcher in Brad Penny, a 50th-percentile 1st baseman best-platooned in Hee Seop Choi, an archetypal back-up catcher in Brent Mayne, and a slugging, wall-banging center fielder with power and good baserunning in Steve Finley, as well as a prospect DePodesta likes. They gave up their primary catcher, Paul Lo Duca, who had a great season 3 years ago, a below average hitting platoon OF with some power Juan "Re-" Encarnation, a below-average hitting and slightly below average fielding OF who's an excellent base-stealer Dave Roberts and the super-setup man, Guillermo Mota, as well as a choice prospect.

This set of deals was a table-setter in an effort to get the difference-maker many competitive teams craved: Randy Johnson. In the end, there wasn't time/mojo to close a Johnson deal, so DePodesta is holding some pieces that were not part of his plan at the beginning of last week.

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The Pundits (exception: Peter Gammons) seem to be unified in the opinion that the Dodger G.M. screwed the pooch. Here's Ken Rosenthal (The Losers = Dodgers). Here's Jayson Stark (Biggest Losers #1 = Dodgers). And here's Buster Olney ("They have messed with success"). I haven't even looked at the L.A. media.

I believe the punditocracy is wrong; there will be no way to tell until the prospects careers are resolved. But if the Dodgers don't survive the first round of playoffs or falter and don't get there at all, DePodesta will be flailed as all opporuntity-seekers are in risk-aversion dominated environments.

The carousel of deals didn't end the way he had hoped it would, DePodesta didn't get the brass ring, but he team is not clearly weaker than when it started. He doesn't have a starting catcher right now, he has a pair of back-ups he can platoon.

This is not, by ittself, a critical problem for a playoff, or even championship team. The 1927 Yankees, some believe to be the greatest team ever, went to the World Series with three career back-up catchers, plus at 3rd base they had a no-hit-no-field journeyman who spent most of his best years as a utility-man. Of course, there's no Ruth, and no Gehrig on the 2004 Dodgers, but an ugly weakness at one or even two positions doesn't doom a team.

DePodesta can still deal for a catcher, though his rivals can make life more difficult for him in August than they could in July, by aborting his attempts to get waiver clearance. He has a better offensive and defensive outfield, a good hitting 1st baseman, and a solid young pitcher for this and future years (I strongly suspect Brad Penny will win more games over the rest of his career than Randy Johnson will).

The Dodgers total future value (discounting the prospect he yielded and the one he got) looks net positive. The National League West rivals made no deals that would make anyone's hair go instantly all Lyle Lovett, either. This is not likely to be a crisis, and probably not a set-back either; just a case where a team didn't close the deal it really wanted to make and now has a slightly different set of current strengths and weaknesses than it had previously, while having a slightly brighter future.

BACKSTORY

Understand, DePodesta has a bit of life experience to reinforce his willingness to take the risk he did, to "mess with success".

The counter-reformation rap against his old team, the Oakland As, and its G.M. Billy Beane, is that while those teams made the playoffs four years in a row, they didn't succeed in winning a playoff series. So beyond being an opportunity-seeker by nature, DePodesta is almost certainly determined to overcome that stigma, determined to win a playoff series or even the World Series as a way to silence critics. Perhaps this distorted his judgement some, increasing his willingness to pull the trigger on the first two deals without a guarantee of the third. But given his team gave up one player with World Series experience and got two back, given he has an extra starter now, given he has just about a net-balance on the deal in current terms, I suspect he saw his risk as low and his potential reward as high.

BEYOND BASEBALL

There is always a political cost to being an opportunity-seeker. Those who are determined not to be "tall poppies" probabalistically have longer careers and few accomplishments. Big organization politics tend to eat up opporunity-seekers sooner or later. Have many of that type succeeded in your organization?

But winning a World Series, as in any significant endeavor, isn't about playing it safe, even for the New York Yankees. Whatever doesn't make you stronger kills you. Standing pat is an option only in a static environment.

I believe DePodesta made the right gamble based on benefit/cost potentials. We won't know for a few years.