Management by Baseball

In a competitive environment, keeping antagonists off-balance almost inevitably provides a temporary advantage. Some temporary advantages have permanent benefits.

I keep several tools available in my own management toolbox for this organizational aikido, though I don't try to teach it too often, because it's not easy to do successfully and failure can be politically fatal. In baseball, the risks/costs are a little lower, but surprisingly aikido is not a ploy managers frequently deploy. Thanks to Baseball Musings, I found a lovely illustration with an explicit rationale written up in the Chicago suburban Daily Herald. I do love seeing these efforts.

According to the story:

The White Sox feel they have a secret weapon in the bullpen and they aren't eager to break out Shingo Takatsu in exhibition games. That's why the Sox are planning to keep the 35-year-old Japanese relief pitcher in the dugout when they play American League teams this spring.

With a funky, sidearm delivery, Takatsu has been baffling White Sox hitters during batting practice and his off-speed pitches have been particularly nasty. "I don't want to pitch him against any American League team down here unless I have to,'' said Sox pitching coach Don Cooper. "I'd rather make it a complete surprise attack. Nobody's seen him, so let's keep him under wraps.''

Pitchers with unusual deliveries, wind-ups or pitches (like a screwball, kuckler or eephus) tend to have an advantage disproportionate to their overall effectiveness in their first appearances against individual batters, and that advantage can extend to a few appearances. In the immediate term (his first appearance against most A.L. teams) Takatsu has a chance to be more effective if the opposition doesn't get to see him in spring training, but only "when it counts".

Now this advantage isn't eternal in most cases. Eventually when a batter has seen the guy a few times, unless the guy changes or, like Orlando Hernandez, just has 34 configurations of wind-up/angle/pitch combo to mix up, the batter zeroes in on whatever disruptive wierdness the pitcher is pulling.

Cooper's take on this is lovely because it has the immediate effect of giving his team an incrementally-better performance out of Takatsu, especially if they use him frequently but for short bursts concentrated against hitters who haven't seen him. Long-term, it has a chance to make a bigger, permanent difference, because Takatsu has been very suuccessful in the past (Japanese leagues' all-time leader in Saves), but his competitiveness in the majors is somewhat in doubt by pundits. (This is actually a little surprising to me because there have been a goodly number of effective Japanese League pitchers who did better than "well enough" since Masanori Murakami broke through the Rice Paper Curtain 40 seasons ago).

But Takatsu is being given a chance to be more effective in his early outings, and with ballplayers, like any staff in other lines of work, early success frequently breeds confidence, and confidence frequently engenders better performance.

BEYOND BASEBALL

Strategically, not showing off your strategy before you have to is a no-brainer. In a competitive or military environment, giving your antagonists a chance to play through scenarios to counter your drives never pays (unless you false-card them by shifting to a different approach while they are grinding through the development of counter-moves). In the ongoing Iraq War you saw this on both sides; each side surprised the other strategically, the U.S. surprising the Iraqis by not rolling out the carpet-bombing shock and awe offensive it promised, and the Iraqis surrenduring by not surrenduring and melting away to fight a non-traditional war instead of defending Baghdad. It always amazes me when a company puts out a press release that lays out its new strategy for everyone including competitors. Given the ineptitude of most American executive teams, the odds that they'll accurately be able to reverse-engineer your strategy quickly if you don't tell them is close to nil.

Tactically, it's trickier. If you're a manager in a predatory organization (managers work to undermine each other for sport, or play the zero-sum advancement games I call "roller derby"), this kind of aikido can make you a very dangerous person to attack.

I used to run a eight-person organization in publishing for an editor-in-chief who was a very disturbed individual. (Publishing, more than most lines of work, attracts the poorly-socialized and people with untreated emotional challenges because the quality of the product is not "measureable" the way fungible products such as food, fabric or metals are. This makes accountability rarer, and this incrementally attracts accountability-sluffers and repels accountability-embracers.) The group I was running worked most closely with another eight-person group managed by a guy I'll call Gene Mauch. The head man had told both of us that if we could get rid of the other guy, we could have his job, too. I didn't care to have my peer's job (more work, same money, plus, he did a pretty good job), but my peer was afraid he was in a "grow or die" scenario...that if he couldn't prove to our handgun-toting editor in chief that he wanted it badly enough, he would "lose".

So Gene Mauch would make a move on the department I was running. He had a host of strengths, but imagination was not among them, and he'd never managed before. When he came at us, he always came with an approach totally optimized to take advantage of the arguments/positions I had made the previous time. And, prepared for that obvious Maginot approach, I would push back again with an entirely different set of approaches. I never showed him the same set of defensive moves twice. And given the predictability of his assaults, I generally turned them into moments of humilating foolishness for him, like the Union Army's sappers creating a death crucible for their own division at the Civil War's battle of Petersburg, or like Rip Sewell's second eephus pitch to Ted Williams. After about the fifth time, he started sending his assistants to try their skill. They weren't as smart as he was. I became a guy with a reputation greater than my actual abilities, & no one but the headman himself wanted to mess with me.

Learn from White Sox pitching coach Don Cooper. Whether it's external competitors or internal antagonists, it pays to grab little edges that give you short-term (and potentially permanent) advantage.

One of the hardest things to do well in most organizations is succession-planning. Operating the present is challenging enough to most American-trained managers (and since most American managers aren't given any formal training, those struggling but trained ones are better off than most). Succession planning, what I call pre-volution, has many facets, from organizational structure, to strategy, but mostly, personnel. How do you build people to take over as the next generation of [jobtitle], what skills will they need that the incumbent has, what skills will be needed the incumbent is missing, what skills will the job require then that it doesn't now, will the organization even need a [jobtitle] by the time incumbent is ready to move on?

Baseball is a wonderful petri dish for succession planning, a window on an amazing on-going experiment, because baseball players, unlike those in most skilled jobs, have a predictable lifespan that's based on age. Yes, coal miners and construction workers wear out, too, but they are the exceptions. In most organizations stuff just happens, and as in nature, evolution, there are mass extinctions, Ouspensky-like catastrophes, exploding heads, mass hysteria and silly Dilbert-quality ineptness.

In baseball, though, everything moves faster, you have to have some plan, which means you have to examine the future and find that challenging middle ground between pretending it'll all be the same (MBWT -- management by wishful thinking), and pretending everything will go your way (MBWT of a different nature).

I used to use the computer tool Sim City to train managers who were planning-impaired. Sim City, if you're unfamiliar with it, was Will Wright's magnificent urban planning simulator, Nobel-prize quality brilliance. Because you can make it speed up and fit a decade into a minute if you choose, because you can limit resources, and you get do-overs, Sim City is an almost perfect training tool for succession planning. And baseball, with its relatively rapid pace of change is almost like Sim City.

YOU SAY YOU WANT A PREVOLUTION

Nature evolves, but good management prevolves, that is, while things in nature just happen, adequate management pushes and shapes responses consciously. The effects are most visible in baseball.

I think the Sim City Zen Master award has to go to John Scheurholtz, GM of the Atlanta Braves. He's done what he needed to do to keep his team very competitive for 12 consecutive seasons, and baseball has changed since then (the owners juiced the ball, then took it down some, successful management theories have blossomed and died, unsuccessful management theories have popped up and deliquesced).

Baseball Prospectus' recent scouting report on the Braves analyses the most recent succession issues. For the first time, the team has a massive budget cut, and yet there are indications that Schuerholtz has made some wise planning decisions for the coming season.

 Player                   2003 VORP    2004 VORP (projected)
-----------------------------------------------------
Vinny Castilla               24.7             9.0
Rob Fick                      7.8            13.0
Javy Lopez                   75.9            26.3
Gary Sheffield               78.9            44.2
Totals                      187.3            92.5

VORP, btw, is a player performance projection technique, highly-imperfect, as they all are, but one of the most interesting ones.

If you look at the Prospectus numbers, you'll notice three of the four players he let go are expected to decline in offensive production by the projection formula. He didn't try to stay in the same place by passively MBWT-ing. If the projections end up being true, and again you have to work from assumptions and intel, even if he had tried to preserve the offensive status quo, these guys wouldn't have let him maintain it.

Fine Sim City move, parallel to cutting off electricity to churches when utility capacity is strained. Now, we can't trust that these numbers are "truth", but in successful succession planning, you have to have some indicators, and at a glance it looks like the measures Schuerholtz is using are parallel to VORP's indicators.

And to press a point made in the perceptive Prospectus article, this is another big set of changes in a long parade that Scheurholtz has helped navigate gracefully. For years the Braves were a pitching team, but last year they lost a pair of their best, and they managed to win their division again remade as an offensive Infernal Machine. That's prevolution wrought elegant. Will they finally fold this year? It's always possible, but there's much to learn in your own operation by watching Schuerholtz work.

You can't stop devolution, you can only prevolve your way around it. I can't remember if it was Wes Westrum or Jean Cocteau who said that.

Ever had an employee who just shined in the crisis moments and the most important assignments but sort of two-stepped his way to mediocrity for the ordinary?

Don Malcolm, the Ralph Nader of sabermetrics (bound to polarize a room into two groups: big fans and people who'd like to strangle him because of their own inner demons or limitations), published a new study to test a theory about batters who hit differently against good opposition than they do against bad. In Pedro Guerrero and the Dark Ravine, he analyses year-by-year splits of Pedro Guerrero's batting stats. Pete Warrior consistently, almost universally, hit better against good teams than bad.

Here's a slice of the information, a part of Guerrero's career, Don presented:

Year   Op    BA   OBP   SLG  OPS+  Op    BA   OBP   SLG  OPS+
1980   x   .311  .330  .495   134  y   .338  .404  .500   159
1981   x   .313  .371  .467   140  y   .283  .359  .461   134
1982   x   .339  .418  .586   186  y   .268  .339  .482   134
1983   x   .328  .417  .630   197  y   .273  .343  .450   126
1984   x   .277  .364  .462   136  y   .316  .362  .462   135
1985   x   .347  .451  .639   210  y   .286  .392  .498   154
1987   x   .351  .432  .582   189  y   .327  .411  .503   162
TOT    x   .328  .409  .566   178  y   .296  .369  .476   141

The first set of numbers are against good opponents, the second set against bad ones. The key number is OPS+ a single-number measure of offensive quality. As you can see, while Guerrero was excellent against bad teams, he was completely transcendant against the good ones during this seven year stretch, and only in one year was he just the same.

That's counter-intuitive. As a rule, better teams have better pitching --not universally, but it's rarer for a good team to have bad pitching that's easy to knock around than for a bad team. For example in the National League in 2003, three of the four teams that made the playoffs finished in the top half in ERA, and the fourth, Atlanta, missed the top half by one spot. All four teams were in the top half in fewest hits and walks and homers allowed per 9 innings, and all but Atlanta were in the top half in strikouts per 9 innings. That's one data point, & while not universally determined, it's solid as a general rule.

Malcolm has used this tool to try to see if there's some predictive measure. For example, he noted Bobby Kielty failed against poor teams while succeeding against good ones, and thinks it might presage greater success the following season, that is, that a breakdown against poor competition is possibly easily remediated if it appears the batter has solid performance against the good teams' pitching. Malcom's going to study a range of other batters to see how common this pattern is and if it correlates in a way that makes it useful as a predictor.

If it turns out Guerrero is very unusual, he might end up being remembered for more than doing to third base fielding what Hitler did to Poland.

BEYOND BASEBALL

Outside of baseball, you see this pattern all the time. It's very common in sales departments because too frequently the department has designed incentives to reward the sharks who can close big deals now. So a lot of salesfolk reserve their biggest efforts for the star venues.

Ever go to a Broadway performance in the afternoon? If the main cast members and not the understudies are on stage, you'll inevitably see one or two who are award-deserving at night performances easing through with minimum effort during the day.

I worked with a copywriter who only pulled out the stops for the marquee jobs -- she could be brilliant or mediocre/replacement level (by choice) and it correlated totally to the name-recognition of the client.

In France, the whole nation's organizational culture used to be gripped by this. Perhaps it's not such a sharp dichotomy now, but when I lived there, if you went to a fine restaurant, you got exceptional cooking, much better than the average for here. If you went to a low-end place, it was much below our average. This pattern even extended to individual menu items: they'd make a giant, Pedro Guerrero effort on the fancy specials, and two-step in an ordinary way down at the bottom of the menu with their less expensive or showy dishes.

As a manager you can control quality when you notice this pattern. You can try to balance the mojo for particular jobs by offering other incentives (gifts, recognition, etc.) on the apparently-lesser jobs. You can try to fake out the Pedro Guerrero by telling her these unimportant jobs really are marquee (short term possibility, not long). If you have multiple staff, you can just give all the high-tone jobs to the Guerrero and dole out the rest to everyone else (I don't recommend this approach). Or you can confront the Guerrero and tell her she has to show better effort on the less showy jobs.

The approach you take should hinge on what other staff you have and whether you think the Guerrero can change. But there's a lot to learn by following Malcolm's approach and trying to discern patterns. You should always be observing your staff to see what they do well and don't do well, so you can optimise your task delegation, change incentives or re-design job descriptions.

¿And while you're at it, will you PUH-LEEZE get Pedro Guerrero off third base and back into left field?

The Baltimore Orioles' front office uses a technique different from but parallel to that of the Oakland As' approach: find a way to use regression analysis of existing, available data to discover proprietary measures that might give your team a competitive advantage in personnel selection. The Orioles' technique is one you can use in your own organization if it has the courage to battle the fear-inspired resistance likely to emanate from H.R. and Legal.

According to this Baltimore Sun story, courtesy of Baseball Primer, the Orioles have exhumed an approach they pioneered (in baseball) back in the middle 1950s: using standardised tests of mental make-up. I haven't yet been able to find a copy of the test they are using, but according to the story, it's used across baseball, so all teams have access to the same data. The Orioles' difference is that Dave Ritterpusch, their director of baseball information systems, has taken enough interest in the tests to do the same kinds of things with the available data as Paul DePodesta has been doing with on-field performance data. That is, Ritterpusch has been running what appears from the story to be regression analysis, comparing early psychological test results to historical information about draftees and what kinf of success ended up achieving.

The article makes it sound like the team has created some formulae based on patterns in the data to create indicators they have found predictive. That is, they believe that for each position on the field, differentiating even starting pitchers from relievers, their test-result patterns that lead to greater probability of success.

It's a chancier strategy than the As', because the baseball events the As are using are in the external, easily measurable, world, while the Os are testing for interior tendencies and people are mutable. They don't ignore the other facets, just use this regression analysis as an additional perspective.

BEYOND BASEBALL

It's finding a niche and exploiting it. Depending on the quality of the test and the quality of the analysis, I believe this is wonderful technique.

I use a host of tools in my own practice for gauging personality and aptitudes. Some pop-psych profile systems are actually very useful when constrained to a work setting (that is, normal people at work exhibit a narrower and more consistent range of personality traits than they do in their "real" lives, so the profile systems don't need to be as complex or robust). I can recommend a couple of widely-available examples that are useful on the personality side if you write me.

In large organizations, there's usually resistance from H.R. and Legal, because they're more worried about getting sued than they are hiring and nurturing the right people and making sure they're in the right position -- that is, like bad baseball managers, they are more concerned with avoiding mistakes (not-losing) than they are with exploiting opportunities (winning).

Overcoming that barrier is important, and if you have the mojo to make more mental kinds of profiles part of your toolbox, you can greatly increase the depth of your organization's strength. And on a cautionary note, in the wrong hands, these kinds of profiles can lead unhealthy organizations to over-optimize on a small number of "types", rendering them less able to evolve or be dynamic.

Given that they are competing in the AL East Drillion-Dollar division, I think that's the least-likely challenge the Orioles are going to face with this interesting model.

You might have noticed a little coverage lately of the Alex Rodriguez-to-the-Yankees deal. A couple of readers asked me to post some management take on it. That means I need to ignore Alex, Stonebender, and the Yanks' 2004 roster.

That means we need to talk about the Texas side of the equation, because that's where all the juicy management lessons are.

BUT FOR THOSE EAST OF THE HUDSON & SOUTH OF THE CLOISTERS...

...a quick tidbit, courtesy of Baseball Primer. According to a story in the NY Post, the Yankees have been trying to trade Soriano for years, part of an ongoing strategy of bring up bright young talent, buffing them up for the press (the press is a willing co-conspirator in this endeavour, because New Yorkers in general, and Yankee fans in particular more than most New Yorkers, have a need to believe every Yankee system prospect is better than any other system's prospects), and once the baseball universe buys into it, monetizing that added P.R.-component of their value by trading the hot shot away. Think ex-Yankee hotshot Gerald Williams who was collecting a paycheck last year at age 36, having had his last net-positive season in five years earlier.

Here's a snippet from that story, which, given it came from the Post, may or may not have any element of truth in it (I love the Post, btw, and I would have taken their headline-writers to work on my stories any day, but the standard of news reporting there is one stratum below the National Enquirer).

It is interesting now how close the Yanks came to trading Soriano before this. There had been a completed deal to Houston for Moises Alou in 2001, but Alou invoked his no-trade rights. Before the 2000 season, Yankees officials were bitterly split about turning Soriano into Jim Edmonds. The Yanks agreed at one point to a three-way trade that would have netted them Matt Clement and B.J. Surhoff before it fell apart. They once nearly moved Soriano to Seattle for Jose Paniagua and Brett Tomko, held serious discussions about sending Soriano to Toronto for either Kelvim Escobar or Roy Halladay...

As a Seattleite, I have to wonder how the Mariners might have brought themselves to give up both Brett Tomko and Jose Paniagua (Joe Bread-and-Water, as he was known here) for A-Sorry.

THE TEXAS REPUBLIC: WHITE HOLE OR BLACK HOLE?

But all the coverage has been of the New York side. Surprise.

For every black hole in the universe, there's (allegedly) a white hole. It's been assumed that New York harvested all the benefits, Texas is just lead-bait, like one of those Indians in a John Wayne movie, just waiting to absorb a bullet and fall off his horse back and to the side, with an "Aiyee" and a fleshy thump. Perhaps, but unlikely. Let's look at a few things from the Texas end.

LESSON #1 - ALL HAT AND NO CATTLE

People who are good at investing other people's money tend to not be good at investing their own. Tom Hicks, the owner of the Texas Rangers, generated most of his wealth using other people's money and working sweetheart deals for public subsidies and working kickback-like favors running pension operations. That is not to be dismissed as a skill. It requires brains and panache.

But owning and operating your own business in a competitive area away from patronage requires a different set of skills. I frequently ask the question of managers assessing or considering the hiring of other managers at any level (including CEO). The question is, "If [candidate] was the assistant manager of a 7-11, would he do a great job, an okay job or would he be a failure?". I call that The Assistant Manager of a 7-11 Test. Tom Hicks wouldn't pass the test (and neither would about 40% of the CEOs at the helm of half-billion dollar and bigger corporations in the U.S.). C-level execs like to pretend this stuff isn't important, that what they do is "different". And while it's different, you have to master the Assistant Manager of a 7-11 skill set to have any chance at all of succeeding higher up.

Hicks drove that original Alex Rodriguez deal, and he got the second best player currently in the game, and a delightful public presence (though perhaps more Eddie Haskell than the Leo Buscaglia Rodriguez pretends to be). But he wasted anywhere from $40 million up by raising the ante after there were no other bidders. And you can do that when it's the public's money, or your friends in high places can recover that for you with a grant or some sweetheart deals. But not as the owner of the Rangers.

That contract made it challenging for Hicks' operation to do other things that needed to be done to keep the team competitive. Not impossible, but challenging. The Rangers are not a terrible organization, nor a terrible team (just a not-particularly-good one). But Hicks is not a real entrepreneur/manager/businessman; he's all hat and no cattle, a Potemkin hacienda-owner. His talents lie elsewhere.

LESSON #2 - THERE ARE TWO SIDES TO EVERY TRANSACTION

I'm not a big Alfonso Soriano fan, but he's not exactly Gerald Williams either. Memories of him now are mostly hyperfocused on his comically disastrous performance in the last World Series.

What did Texas get on their side of the deal in acquiring him?

1. They got a guy who was an unremarkable-fielding shortstop in the minors who was moved to second base, a position at which he is simply dreadful, and watching him play there is redolent of the last reel of the second Alien movie. Texas won't likely play him at second base most of the time, increasing his net value.

2. They got a guy who kicks serious grass in the Rangers home stadium.. Given that, it's gonna boost his home stats significantly:

A-Sorry at Arlington 2001-03
By Stadium AB R ..H 2B 3B HR RBI BB HBP SO SB CS AVG .OBP .SLG .OPS
Arlington  41 11 16 7 ..0  3 ..8 5 ..1 .10 3 .0 .390 .468 .780 1.248

Data from ESPN.COM

Scary numbers, though a fairly small sample. But do you think people they'll complain about his low walk rate rate if his on-base percentage at home is .465? Those doubles are very impressive, and the homers nothing to sneeze at.

Technically, given A-Sorry is playing half his games in that park, they might have a guy who is competing for a batting title, and putting up good power numbers, too (that is, he could look a lot like Alex Rodriguez as a set of numbers to casual observers). Those are better numbers than the other middle-of-the-lineup stud (well, Viagra stud) R. Palmeiro put up playing in Texas (though Palmeiro's sample was 19 times the size).

A-Sorry is simply worth more to the Rangers than the Yankees, because of the environment and the teams' existing rosters. Management lesson here is that some things are worth more to the person who got the asset than the one that neogtiated it away.

LESSON #3 - YOUR GREATEST STRENGTH CAN TURN INTO YOUR GREATEST WEAKNESS

There's a somehwat overblown legend about Boston's Fenway Park and its short, high left-field fence destroying good hitter because it was so tempting (and seemingly easy) to pop balls off that wall for doubles. It was very true for certain hitters, who would distort their approach to try to take advantage of the opportunity for easy pickings, and fail.

A-Sorry is going into a parallel situation. He's moving to the American League park which in which he's put up the best (by a big margin) numbers in his career.

And given his lack of discipline, he could exacerbate his Achilles Wheel, his orgone-drenched passion for swinging at cruddy pitches. Over the last three years, he's only walked in about 5% of his plate appearances, about half of the frequency considered low. In his small Texas sample, he struck out 22% of the time, very high, but not legendarily so.

If some of those strikeouts turn into hits, or even of he keeps it at that very high level, he could succeed. But if his lust for putting the ball into play hard amps up with a little better success, he could disappear entirely into the cloaca of his strike-zone dementia, disappearing below the Event Horizon of his own lack of discipline like Maxmillian Schell at the end of The Black Hole. Emotionally mature players can resist the siren call of the tater. A-Sorry hasn't yet shown he's mature, so this one is still up in the air.

Beyond baseball, you see this a lot. A company that has, for example, very effective direct mail, finds it hard to use other techniques, like advertising, or internet marketing. If they move into a zone where they've always had good success with their strength, they can hyperfocus on that and miss the required balance. And it happens with personnel, too. I worked for a company that had the most fantastic engineering department. When the company got an influx of cash, they just hired more (really fine) engineering guys, because it was their strength. They didn't need more engineers, even really good ones. They needed operations skills and some creativity in the financial side and a bit of luck, but they came off the tracks in a haze of passion for their passion.

For every black hole, there's a white hole. Which one is Texas?

The Dodgers this week chose sabermetrically-drenched Paul DePodesta, he of the Moneyball stardom, to be their G.M. It wasn't a given.

Thanks to Steve Nelson of the always-interesting Mariners Wheelhouse, I read that just days earlier, according to the Los Angeles Times, the team was interviewing another, very different candidate, Dennis Gilbert, whose diverse background would have made him unique in G.M. circles. Some of his background in the highly-abridged snippets below:

Former agent Dennis Gilbert, who has spent the last three years working as a
special assistant to Chicago White Sox Chairman Jerry Reinsdorf, interviewed
for the Dodger general manager job Saturday.

Gilbert, a Los Angeles native and longtime Dodger follower who was part of a
Jeff Smulyan-led group that failed in its bid to purchase the Dodgers last
year, was recommended for the position by Reinsdorf.

[snip] Gilbert, a 55-year-old who has a strong background in
negotiating contracts and scouting, did confirm that the interview took
place.

"I've known Dennis for 20 years, first as an agent, and then working with
me," Reinsdorf said. [snip]

"He certainly knows how to negotiate contracts, and one of the problems the
Dodgers have had over the years is they've paid [players] too much money. He
knows the market. He has a great mind, a really fertile mind, and lots of
good ideas." [snip]

Among his clients in 18 years as an agent, a period in which Gilbert broke
several salary barriers, were George Brett, Barry Bonds, Jose Canseco, Mike
Piazza, Bret Saberhagen, Bobby Bonilla and Danny Tartabull.

Since selling his stock in the firm in 1998, Gilbert has been involved in a
number of ventures, including starting an insurance practice that
specializes in policies for major league players and entertainment industry
professionals, and establishing and raising significant funds for the
Professional Baseball Scouts Foundation.

Gilbert has attended roughly 75 games a year in Dodger Stadium, and while
going through Major League Baseball's due-diligence process as a prospective
owner, Gilbert spent several weeks in 2003 conducting a thorough examination
and review of the franchise, including the front office and the farm system.

So in Gilbert there was candidate who had been a succssful agent (other side of the table perspective), prospective owner (able to empathize with the owners), lots of exposure to the Dodgers as an outsider (75 games a year attendance), some scouting background of indeterminate success (though the fact that his charity work was for scouts would tend to make scouts empathize with him, so he'd be able to tap into other scout perspectives).

Reinsdorf, his current employer, saw this candidate as a winner primarily because he believes Gilbert is a great negotiator.

My first reaction was disgust, in part because I dislike Reinsdorf's history and significant responsibility for some adversarial (against players and fans) positions as an owner, and his significant responsibility for making the Joe Lieberman of Baseball, Bud Zelig (why Lieberman? Inept, Greedy, Nice Guy To Those Who Know Him Personally) the Commissioner. My first reaction was Bean-Counters on the Loose (Fineman Films, 1974), the thought that Reinsdorf really believed that a master negotiator (Gilbert is a much "better" negotiator than say, Scott Boras, whose scorched-earth policy means teams come back to him only when they have to) was a person you wanted to rebuild a proud but increasingly-tattered franchise. The Reinsdorf thought being that if you could just drive down player salaries and scouting costs and minor league agreements and all the things G.M.s can affect on the cost side, you could create a profitable franchise. If you read this weblog often, you know it's unlikely that any organization that has as their mission "maximizing shareholder return" will ever achieve excellence except in the net profit department, that if gross or net are your raison d'etre, your focus on winning as a goal is necessarily diminished, and therefore becomes less likely.

But once my churning chelm settled down, I realized Gilbert's set of aptitudes would be unique among G.M.s/competitors. And there were some very good aptitudes and ways of looking at things. For example, he may or may not have been a good scout, but he learned the scouting way of looking at data. That's a filter, a set of tests, a way of examining and processing data. So was his experience as an agent, and so was his experience as a prospective owner. And he's both outside the Dodger organization, while at the same time he allegedly attends 75 Dodger games a year, which makes him fairly knowledgeable about what existing players do and don't do well.

Uniqueness in itself is a positive, especially in a closed system such as baseball. As Richard of the Just A Gwai Lo blog believes, one can profit just by being in the minority (and it helps a lot to be correct). Richard & I both believe some of the success of the DePodesta-Beane team in Oakland derives from their being alone in pursuing a strategy. And yes, the sabermetric approach has more followers now (Toronto, Boston, perhaps St. Louis, perhaps others not advertising), and the comparative advantage of the approach is bound to fade a little with each subsequent addition. So a unique strategy based on negotiation and the loyalty and diligence of scouts might work well even if it wasn't THE optimal strategy.

I'm really glad the Dodgers chose DePodesta. It'll be interesting to see how the cognitive grandson of Allan Roth guides the franchise. But Dennis Gilbert would have been an equally interesting, and unique, choice to watch manage a baseball franchise's front office.

Executives outside of baseball take note: There are a hundred ways to solve most complex challenges. As Richard says, sometimes just being in the minority and having a workable/right solution is, in itself, the optimal approach.

In previous entries on the Paul DePodesta presentation to non-baseball managers on change management (off-line as I write this), I've covered a few of his techniques & insights. This post continues that series, and is not the last.

Let me note that yesterday, the Los Angeles Dodgers, the first organization to hire an official team statistician (Allan Roth), chose this highly numerate young man to be their new G.M.

If you haven't read the previous & don't want to, here's some table setting:

Paul DePodesta, the Assistant GM of the Oakland Athletics featured (not extensively enough) in Michael Lewis' Moneyball, is one of the most interesting of the new statheads in baseball front offices. What separates him from the others is not that his stats are better or deeper, it's that he understands the key, final, most-difficult-to-master concept in the Management By Baseball model: Change.

He understands that to successfully manage and push change, you have to change he changes you deploy, even as you're concurrently fighting to install them in the first place.

To understand the system he was working within better, he kept asking naive questions. And in return, he got a lot of opinions.

The response to all this questioning was somewhat expected. There were opinions layered on top of opinions. A lot of people were saying, "I think it's because," or "maybe it's this," or even "that's the way we've always done it". My industry is comprised on human capital -- the players are our assets. So subjectivity plays some role. But the enormity of the subjectivity was staggering. [snip]

Opinions are great -- don't get me wrong. They're great for starting research projects. Then you go study and see if you can prove the opinion or not. But when placing multi-million dollar bets on future outcomes, opinions are wholly unsatisfactory. Opinions as conversation starters are fine. Opinions as conclusions are very bad.

I started research projects to discern the objective "why". I wanted to know why certain teams won and why otyher teams lost; why certain drafts produced big stars and others didn't.

This was the naive question put to work.

DePODESTA INSIGHT: OPINIONS ARE FOUNDATION, ANALYSIS DELIVERS ACTION

He knew he wanted to instill analysis into the mix. He knew he'd need measures, But like many managers outside of baseball who are trying to develop and direct changes sensibly, he was faced with "information overkill"...too many unintegrated numbers and no established systematic way to balance and blend them. DePodesta threw himself at an old sabermetric drill, using Markov technqiues to find probabalistic relationships between baseball events and run scoring.

I was able to figure out that a man on first with nobody out is worth "X" runs and a man on second with two outs is worth "Y" runs. From there I was able to jump to understanding what it means to have someone who can hit a lot of doubles. What was the value of that event and others? I went a step further and asked who the people were who could add these value-enhancing skills to our team.

The result is a model that can assign some marginal value to each thing that can happen on the field. Then, you can apply that model to calculating a rough value for each player, as well as shape in-game strategies and plan training effort (to maximize training in the components that have the highest rewards).

And to go along with the probabalistic model, he imported an analogy to buffer the fear most people have of change.

DePODESTA TECHNIQUE: BE THE HOUSE

The analogy was a casino analogy: "Be the house".

Any individual bettor might win any individual bet against the casino (the house). But the odds are in the house's favor. Chain together enough events, stack in enough betters making enough bets, and probabalistically it's overwhelmingly likely the house will come out ahead.

Because baseball has such a long season (so many events), if you can just identify and grab enough small edges, you can "be the house" and win, as DePodesta aimed for, 60% of your games. It means failure (40% of the games are losses) is permissable and therefore no cause to panic, because you're going to (at least you set yourself up to think this way) win in the end.

Every season we play 162 games. Individual players amass over 600 plate appearances. Starting pitchers face over 1,000 hitters. We have plenty of sample size. I encouraged everyone to think of the house advantage in everything we did. We may not always be right, but we'd be right a lot more often than we'd be wrong.

BEYOND BASEBALL: TWO DePODESTA APPLICATIONS

In many organizations (clearly not all), there are collections of things that were once processes, alive, evolving, that have ossified into habits, supported by opinions. As in baseball, they are supported not by rigorous examination or testing (that may have been done when they were first established), but by habit, involuntary gesture. In anthropology, we call these "survivals" like the behavior (almost involuntary on the part of the speaker) of saying "God bless you" in response to someone sneezing. More often than not, the speaker doesn't truly believe that at the moment of sneezing, the sneezer is subject to being possessed by an evil spirit, the reason people in the 12th century were trained to say "Gode blesse ye" to prevent such nefarious doings. (Aside: Perhaps I'm being optimistic when I say "more often than not". I go to a wide-demographic site called Iwon, and they have polls for their visitors. One was about evolution versus creationism. The results indicated about 20% believed in evolutionary biology, about 20% believed God created all life the way it was in 4000 B.C., and about 40% believed the totally impossible Baked Alaska that really it was both at the same time. So perhaps a plurality of American believe, along with the Bundi of Borneo -- yes, the bones in the nose dudes -- that sneezing makes one subject to possession by evil spirits).

So putting a yardstick to presumptions, finding out where the support for behaviors is a habit and not the result of ongoing examination, is a fruitful way of turning up opportunities to be aggressive.

And "being the house" can be productive, too, in many settings. Not all shops are like this, for example, the auto mechanic place up in Everett that mostly does tune-ups for Porsches and Audis. Close-enough is no-good, only perfection is acceptable because the equipment wasn't made to be even slightly tolerant. And, because there are not a lot of transactions over which to accumulate an edge.

But more likely than not, you have some processes in your own organization that are repeated frequently and where perfect is not perceptively better in any way to "close enough". These are great targets for re-tooling, because if you can figure out a way to "be the house", that is, install a strategy that's a winner over time, you can reap constant rewards. And you can buffer staff fears about occasional "losses" which always accompany change but must not be allowed to halt it.

BUT, please note, you have to keep measuring results. Unlike a casino, the environment shifts subtly even when your assumptions were totally correct. But sometimes, your assumptions are going to be flawed, because data can tell you only so much.

As baseball researcher Don Malcolm will be the first to remind you, the model DePodesta created for the Oakland A's (more on that in the next entry in this series), worked well, but not well enough. The model paid tribute to in Moneyball was heavily re-tooled. Yes, the As still have more than their share of unathletic bodies, but their success in the last couple of seasons is more attributable to three "ace"-quality starting pitchers and defense that was improved over the original model that rejected defense as an overpriced hood ornament. Through observation, DePodesta learned that attributes like defense and team OBA were not linear functions charted against success, but non-linear one (for example, you can yield on defense only so far before the model decays and goes China Syndrome).

In my next entry in this series, I'll continue this exploration of DePodesta's insights & techniques, specifically related to how he worked to make the change happen, the (very successful, and contrary to the way I usually try to do it) organizational development approach he took.

It doesn't happen often enough, it requires luck and knowledge both, but there are times as a manager when you think through something quickly and just hit it right on the head. In baseball, it's a manager's Bernie Carbo moment, when with a World Series game on the line, you call for a pinch-hitter, and he essentially wins the game for you with a homer (if you read the play-by-play game line for the famous 1975 World Series game six that has the Carlton Fisk homer video byte, you'll realize it was Carbo's homer, not Fisk's, that was the deciding blow; Fisk's, for the home team in extra innings, was statistically almost a foregone -- or even fivegone -- conclusion). In baseball research, it's a Lloyd Waner moment, which I'll get to in a minute.

You gotta love those events, the total sweet spot, George Brett swinging as hard as he can and getting 100% of Goose Gossage's hardest fastball, whether in baseball or in management. They don't happen all the time, but the satisfaction of them persists, and serves to defend the psyche when things aren't going so well.

I was once consulting to a small, intentionally lean group in a wonderfully aggressive organization that had new management that wanted to prove to the world that the old regime was bad (it wasn't...not even close). Because the laws of physics, gravity specifically, apply to fecal matter on a steep embankment, one can expect that fecal matter to move in the obvious direction. In this outfit, the program managers were getting pressure from above to do "more with less", and they, in turn, were trying to deliver to impress the new executive team by "making it happen". But program managers, unles they roll up their sleeves and pitch in, don't do the work that makes things happen; they just beat the drum rhythm faster. And this group I was working with was already hyper-optimized and pushing hard.

Worse, the program managers were playing a zero-sum game, each wanting all the resources for their own program,and having no incentive to be concerned about anyone else's program.

I needed a tool to (a) protect the lean group from the Tragedy of the Commons madness of the program managers, (b) squeeze an extra 2-4% measureable effectiveness out of them that would indicate enough "progress" that the new executive team wouldn't think they weren't "doing more" in response to the marching orders sent down from on high, and (c) trump the efforts going on in the rest of the company in a way that made the group untouchable for a while. I'd used lots of tools in similar situations, but never the particular one I used here. I was just guessing based on a combo of some real factors and intuition.

In this case, the tool was merely an electronic Project Management package that output Gantt charts, the kind of tool no one else in the entire multi-million dollar company was using (and in most cases, had never tried to understand before). The group's manager already did this kind of work in her head quite effectively. But the tool addressed all three challenges, in this case, perfectly, George Brett swinging as hard as he can and getting 100% of Goose Gossage's hardest fastball. The intentionally-giant Gantt print-outs were the The Great Wall of China, unarguable, especially by the program managers who didn't know how to produce them themselves. The tool helped the manager and me do some creative re-sequencing that did squeeze out a couple of extra percent of production without burning people out. And it made the group look so much more technically sophisticated in comparison to the rest of the company that the executive team left them alone for two rounds of layoffs that resulted in big bonuses to the executive team.

I hit that 100%, and like a game tying line-drive gapper in the bottom of the last inning, it felt beautiful coming off my bat and has resided in my memories ever since as one of those perfect moments I'll carry to my grave.

100th-PERCENTILE HAPPENS SOMETIMES

It does. The perfect storm. Brady Anderson's 1996 season. The script for the movie The Usual Suspects. Bob Beamon's Olympic long-jump. Sometimes, against the laws of entropy, the dance of random chance lines up all the random factors in your favor and perfection occurs.

In my entry a week ago, I was trying to make an analogy about 'focusing on outcomes', and I chose to make an analogy out of a batter who hit for high average, but was actually an offensive drag compared to average for his team. I was in a hurry and just plucked Hall of Famer Lloyd "Little Poison" Waner out of my memory as a poster boy. I knew he was an decent example, but I was just guessing based on a combo of some real factors from memory and intuition. I didn't check my database or anything scholarly, I just grabbed the least-useful non-pitcher in the Hall of Fame.

It turned out that Little Poison is not only a good poster boy for high-batting average, net-offense-negative performance. In response to a message from someone wanting to know the all-time best batting averages that had OPS+es at or below average, I ran a query against my normalizing database and it turns out frelling Lloyd Waner's 1930 season is, by a megaton, baseball's all-time leader in the pattern I was trying to describe. Sometimes you're the windshield, sometimes you're the bug. Sometimes you're George Brett.

And because the message writer wanted a top-ten list in this category, I produced it and share it here, a trifling but tasty piece of statistical trivia.

Here are the top 12 seasonal batting averages of all time (minimum 200 plate appearances) that are associated with no-better-than-average hitting usefulness, with the RPRO column representing a measure similar to OPS+, normalized so the league average equals 100, with higher numbers being more valuable:

BA	Year	Apps	First	Last	RPRO	Roba	RSlg
0.362	1930	265	LLOYD	WANER	99.7	105	95
0.330	1925	237	HOMER	SUMMA	100.2	106	94
0.327	1996	210	ROBERT	PEREZ	95.9	101	91
0.324	1930	326	MONK	SHERLOCK	97.5	106	88
0.324	1998	308	AARON	LEDESMA	96.3	101	92
0.319	1897	566	KID	GLEASON	98.7	102	95
0.318	1930	390	JIMMIE	WILSON	99.2	103	96
0.317	1930	378	AL	SPOHRER	99.1	101	98
0.317	1930	248	BENNIE	TATE	98.4	106	90
0.317	1922	631	HY	MYERS	97.0	96	100
0.317	1934	618	BILL	KNICKERBOCKER	99.9	99	102
0.317	1994	390	FELIX	FERMIN	93.0	99	87

Stats notes for those who care: RPRO is my measure Relative Production, which is very close to OPS+ but does not adjust for park factors. Apps are approximated plate appearances.

An interesting bit of synchronicity: Five of the players on this list are all from the same single season, 1930. As I noted in that earlier post, it was a legendary year for offense, a year in which a last-place team hit .315 as a team (and that includes the efforts of the pitchers at the plate). Even more impressively odd, three of those five 1930-uns were catchers: Ace Wilson, Al "The Human Spore" Spohrer, and Bennie "Lost Freight" Tate. Given that there were over 50,000 qualifying player/year seasons for this "measure", it's interesting that almost half of them were from the same year.

I love these moments of perfection. Lloyd Frelling Waner...human lesson in management, and opportunity for perfect moment. If there was a Hall of Fame for Synchronicity, he'd be in it.

We don't know who discovered water, but we can be confident
it wasn't a fish -- Father John Culkin

In my previous entries on the Paul DePodesta presentation to non-baseball managers on change management, I rang up a few of his lessons. This post continues that series, and is not the last.

If you haven't read the previous & don't want to, here's some table setting:

Paul DePodesta, the Assistant GM of the Oakland Athletics featured (not extensively enough) in Michael Lewis' Moneyball, is one of the most interesting of the new statheads in baseball front offices. What separates him from the others is not that his stats are better or deeper, it's that he understands the key, final, most-difficult-to-master concept in the Management By Baseball model: Change.

He understands that to successfully manage and push change, you have to change he changes you deploy, even as you're concurrently fighting to install them in the first place.

DePodesta started in the Indians' front-office, but the Tribe was successful, and successful organizations have the least impetus to change. So when the then-struggling Oakland As offered him a promotion, Asst. G.M., he took it. In thye past six seasons, the As had finished 161 games under .500, and as he said, "were really in full crisis mode...attendance was in a freefall." Given the choice between comfort with success or chance to work for a lower-budget organization "in freefall", what did he do?

What did I decide to do? I moved to the Bay area. This was the perfect opportunity because losing had become the expectation in Oakland. If we tried something really innovative and it didn't work, all we'd be doing is fulfilling expectations. To use a scout's term, there was a lot of upside. If somehow we figured out how to put a playoff caliber team on the field for pennies on the dollar, the baseball world would have to take notice.

It wouldn't be easy for us. First of all, no small market team had ever made the playoffs in the post—strike era. The A's like everybody else in baseball had ceased to do one very critical thing—to ask the naïve question: “If we weren't already doing it this way, is this the way we would start?”

Management guru Peter Drucker introduced this simple test decades ago and yet our public and private institutions are replete with things as they are because that's pretty much the way things have always been. Why is the workday 9—5? Why do we have the Electoral College? In baseball, why do people still believe that trying to bunt and steal bases helps in scoring runs? [snip]

So once I got to the A's I began a subtle, under-the-radar mission to ask the naïve question all over the A's organization. As you can imagine, some people didn't like it. Remember that the baseball industry is run by these old time guys with leathery skin who chew tobacco. Imagine Jack Palance in a baseball cap. And here's this young guy asking all of these questions like, why is our scouting system the way it is, what about our contractual strategies?

DePODESTA TECHNQIUE: CHANNELLING DRUCKER/INFILTRATING CONSCIOUSNESS

DePodesta cies Drucker in that clipping, and to a lot of people, Peter Drucker is ho-hum. Professors and business people use his name all the time, like a totem. He's about a million years old. Don't let that fool you -- he's the single most-perceptive organizational observer who actually applies his knowledge. He's not some ivory tower theorist, Drucker's a practitioner. And his rules of operation are very simple, making them universal. He gives them away for free, but people hire him anyway, because people just can't do them as well as he can. If you ever get a chance to hear him present, take it. He's remarkable.

Drucker drives change by fighting interia, by applying the naive question, glacially, unstoppably. Take nothing for granted, examine all rules, fight all gravity.

So when DePodesta got to Oakland, an outfit in a rut, but with hopes of success, he channelled Drucker.

The next time you get a slack day at work, try it. Step back from the implicit, quotidian ordinariness of everything and ask naive questions, like

• Why does that time card that takes over ten minutes a week to maintain still have a place here?
• Why do I need to get a signature in advance and waste four days to buy $21 of office supplies?
• Why is the coffee in the lunch room so undrinkable?
• Why does Finance have approval rights over the content of this already-budgeted marketing program?

Just channel Drucker all day. It can be depressing if you let it be, but drive your mind that way just for one day. You may not have a lever a fulcrum or a place to stand to make the obvious changes, but even just oopening your eyes to it can help you as you move ahead in time, not accepting plaque or overhead on new initiatives.

Then start asking the naive question (even if you know the answer). Keep asking politely, as persistently as the three year old who asks "Why?" over and over, but in a better-socialized way.

You may not be ablke to do this yourself. Unlike DePodesta, you may be an old-timer in the organazition. You might need to hire someone new, or get a consultant to do this. Most consultants are good at this (standard consultant procedure is to come in, harvest knowledge, package it, charge you for what staff told consultant), even if most of them aren't good at delivering good advice based on that knowledge. But if you can get someone to ask the questions, and you aren't the one to answer them, it can be a very Socratic experience, it can wake up, and sometimes galvanize into action, the people being asked.

I'll continue the exploration of DePodesta's insights & techniques in my next entry.

In my previous entry on the Paul DePodesta presentation to non-baseball managers on change management, I rang up a couple of his lessons. This post continues that series, and it is not the last.

If you haven't read the first and don't want to, here's some table setting:

Paul DePodesta, the Assistant GM of the Oakland Athletics featured (not extensively enough) in Michael Lewis' Moneyball, is one of the most interesting of the new statheads in baseball front offices. What separates him from the others is not that his stats are better or deeper, it's that he understands the key, final, most-difficult-to-master concept in the Management By Baseball model: Change.

He understands that to successfully manage and push change, you have to change he changes you deploy, even as you're concurrently fighting to install them in the first place.

DePodesta started in the Indians' front-office, which had been very innovative in pairing two old models with one new one to create a significant, recogizable advantage for the team. One old model was to invest in scouting and developing good players internally; the new one was to sign them to long contracts earlier in their careers, before their market value moved up very significantly, and before you really apparently needed to lock them in. The other old model was to use your excess young talent (signed or otherwise) as trade value to pick up pieces you hadn't successfully developed yourself (because no organization consistently produces the exact balance of positions and aptitudes it needs).

Until John Hart & the front-office team around him put this into play, the Tribe had had a long period of relative futility. In 1954 (111-43) and 1955 (93-61), they were extremely competitive. And then the rains came...through 1994, they hadn't won 90 games again, a 30+ year stretch of sogginess in which even a giant rat chasing Max Alvis around the home stadium wouldn't provide significant amusement.

But 1995 started a seven season stretch in which the Indigenous Americans whupped up on their division, took six div. flags and went to the World Series twice.

And this doomed them.

DePODESTA INSIGHT: SUCCESS OSSIFIES THE ABILITY TO ADJUST

Winning is the enemy of adaptation. As DePodesta said in the presentation:

I was grappling with a significant issue: the Indians were very successful at this time. We kept winning the division year after year, selling out every game in our stadium and the owner took the team public at one point and was making more money than any other owner. Thomas Kuhn wrote in The Structure of Scientific Revolutions, “As in manufacture so in science—retooling is an extravagance to be reserved for the occasion that demands it.” There was no crisis in Cleveland, at least not on the surface.

How was I supposed to innovate a supposedly smooth running machine? There was, however, a crisis underlying our success. Our lofty expectations had stifled our innovative spirit. Everything we had done to be successful, we stopped doing. We were hanging on instead of trying to move forward. We signed veteran, big name players who everybody knew. Our team got a lot more expensive and started growing older. Though I was seeing all this, I didn't have much of an audience in Cleveland.

The ability to plan and push ahead change is great, and unusual. Angus' Law, the rule of 85-10-5, is that 85% of organizations cannot adapt intentionally and successfully, 10% can do it once, and only 5% can change their changes effectively.

The Indians, DePodesta thought, were in the 10%; having successfully made a change, surfing the crest of the new wave, they felt like they had this management strategy thing licked. Eventually, it's almost inevitable that nature will start changing the probabilities to invent an ebola virus to keep you from getting too cocky, venture guys will stop having quality investments to make but be awash in so much cash provided to them by impatient rich people wanting to get richer, competitors will decode your elegant system for exploiting edges.

DePodesta understand that it's not just about change, it's about changing your change, moving on, starting the process of examination and development of new changes even while you are deploying today's innovations, innovations that external change are undermining with every tick of the clock. As he said in his presentation

So is our current operating system 1.0 the answer? Probably not. We still have a lot of questions and solutions that are over the horizon that we haven't gotten to. Fortunately for us, the bulk of the baseball world is still working on upgrades to Subjective 1.0 rather than what we're doing or even finding a completely different system. Being innovative doesn't mean searching for upgrades over inefficient systems. It means searching for entirely new ways of doing things. We don't spend a lot of energy tweaking current systems that are inefficient.

BEYOND BASEBALL

Every organization struggles with this, and the bigger it is, the more the Diseconomies of Scale undermine its abilities to forge ahead and adapt.

People who are seen to be great innovators, DeLorean, Jack Welch, Bill Gates, Rommel, J.C. Penney, Arthur Morgan, Horace Mann, Click & Watson, people like that usually have one great innovation in them. They might milk it for a while by using sheer force of personal or organizational power to batter or better their competition, but the environment, by changing persistently in unpredictable ways, eventually moves the bull's eye to a place their mastery of hitting a specific spot is no longer productive. These folk are a dime a dozen compared to the handful of people who innovate innovation, as it appears DePodesta is trying to do.

Have you been in an organization that made changes as significant and successful as the Cleveland Indians did? When did they start re-tooling a little? When did they start their next big make-over?

In the next entry we'll take a look at a DePodesta's technique for finding out what needs changing, something you can apply in your own organization.

One of the favorite whipping boys of the sophisticated baseball fan population is Chicago White Sox G.M. Ken Williams. He's made some odd deals over the years and some good ones, too. More than most G.M.s, his performance is affected by an intrusive, aggressive owner. I'm agnostic about him, and if you pay attention to him, he frequently has something that, by contrasting himself with both the committedly old-school G.M.s and also with the committedly new wave G.M.s, reveals some interesting management petits-fours. Yesterday he had something revealing to say about third base in the Management by Baseball model: Self-awareness.

In an interview with the suburban Daily Herald cited by Baseball Primer, the reporter asked him about "competing" with the Second City's other team, the Cubs (they don't compete in the standings, and they play each other just a few times a year) in acquiring players who will attract fans' attention:

More specifically, how nice would it be to change places with Cubs counterpart Jim Hendry, who is operating with a budget in the $90 million range?

Williams bristled at the question.

"If anyone gets into that frame of mind around here, I'm going to have them replaced,'' Williams said. "Thinking about what you don't have, or thinking about how little you have, that's just not conducive to being productive and being creative.''

Emphasis mine.

This insight is both very powerful in the general case, and can be very limiting if you're not careful with it.

WORK WITH WHAT YOU'VE GOT

One of the challenges that's universal in management is to winnow out your emotions from the situation at hand. I work very hard to get managers to "think" instead of "feel". Feelings have their place, but no manager should ever rest with "I feel like this is a good program", any more than they should feel Santa Fé is the capital of New Mexico. Some things, especially management decisions, need a foundation of facts, and, even adding shading and the subtleties of human perception, those facts and anapysis of their pattern should be the basis for a decision. So I frequently will say in meetings, "It's fine to hear how you feel, but don't waste our time with that. Tell me what you think". Once you're done with the analytical core, you can use your feelings to fine-tune the overall effort.

If you inject your feelings to early, you're subject to the 3rd most damaging & widespread flaw in American management practice: Letting your personal-life emotions (good and bad) bleed into a decision or your relations with people at work is a chronic disaster.

I worked for a while for a manager of a documentation department at an aerospace company and she had terrible anxiety attacks. On days the bad chemicals were really churning in her brain, she'd make bag bid decisions based on her anxieties. She'd also pick fights with her staff. When I worked at Microsoft, I had a "manager" who was chronically depressed, and on the days it was bad, he wouldn't negotiate the work we did for other departments because in his depressed state, he just "knew we'd never meet any of the deadlines anyway, so what did it matter". I consulted at an international financial firm and the manager I was brought in to help was seen to be erratic, both brilliant and terrible, in an unpredictable way. I could find nothing in his work that explained it, so I moved on to the next assignment there, but after I'd been there a while, we had some lunch and he told me he had a terminally-ill child and it was exerting tremendous pressure on him. I relaized that some days he really wasn't able to process information because he couldn't compartmentalize such dire life tragedy, but he made decisions anyway rather than putting them off or delegating them. In that case, he and I went back to his management and worked out techniques for him to be able to stall not-urgent things and delegate urgent things, and a side-benefit was he eneded up giving good mentoring/training to a subordinate who later used that platform to become a vert good manager herself.

It's important to know how your feelings are at the moment of a decision.

It's equally important, as Williams noted, to work with what you have and not let emotions like resentment or depression color what you do. It's a waste of time that you could apply to actual problem-solving, and it'll lead you to mistakes that are easy to avoid.

BE PREPARED FOR CHANGE

At the same time, you have to invest some of your energy budget in contingency planning. ¿What if oil prices get detached from the U.S. Dollar and are anchored to the Euro, driving prices up to $39/bbl.? ¿What's my fallback position if my clean-up hitter gets injured? ¿What would be the best use of a 10% departmental budget increase?

I can't really tell if Williams has taken his "work with what you have" too far. I think not. Later in the article, the author writes

When he bought a home two years ago in Plainfield, a remote Southwest suburb, Williams admitted he enjoyed using the drive time to analyze all facets of his job.

And while stuck in traffic, the thought of operating with a much larger payroll has often crossed his mind.

But rather than cry poor, the 39-year-old Williams is trying to make the most of his plight.

"It doesn't matter if you have $100 million, $50 million or $25 million,'' Williams said. "The goal is the same and that's winning. Having more money, we might play those kind of games internally. But I think it goes beyond baseball. In any company, business or personal life, sometimes we get so bogged down with worrying about money that it takes away from what you're trying to accomplish. And that's exactly what we're trying to avoid.''

It seems to me he's struck the right balance. Be in the present, don't let resentment or envy or other personal emotions shape decisions, but remember that things will change and give a little thought to contingency planning. Perhaps he shouldn't be the Muggable Mary of our sabermetric community.

I wish more managers outside of baseball worked in the zone Williams seems to have found.

We don't know who discovered water, but we can be confident
it wasn't a fish -- Father John Culkin

Paul DePodesta, the Assistant GM of the Oakland Athletics featured (not extensively enough) in Michael Lewis' Moneyball, is one of the most interesting of the new statheads in baseball front offices. What separates him from the others is not that his stats are better or deeper, it's that he understands the key, final, most-difficult-to-master concept in the Management By Baseball model: Change.

He understands that to successfully manage and push change, you have to change he changes you deploy, even as you're concurrently fighting to install them in the first place.

Thanks to a link made by Joe Sheehan at Baseball Prospectus, I was blessed with a Paul De Podesta essay on "The Genesis, Implementation and Management of New Systems". It's fantastic. Long, for a web-article, even compared to some of mine, but a delightful exploration of organizational change.

DePodesta's position is not much like the basic stance Lewis took in Moneyball (baseball can learn from investment disciplines), but quite like mine (all organizations have a lot to learn from baseball, because baseball is such an open, public, measureable endeavor).

This one article includes eleven insights and techniques for change management, for designing, pushing and polishing change in an organization combining all of the "bases" in the Management By Baseball model.

This will end up being a multi-part discussion, because there's just to much grist here, but I'll start today

DePODESTA INSIGHT: OUTSIDE BASEBALL BEATS "INSIDE BASEBALL"

Changes make working models outmoded, marginally less efficient. The more you know about the current models, the easier it is to work effectively within them and by being an insider, lose your perspective that you would have as an islander, and outsider. As DePodesta says in his article:

When I joined the Cleveland Indians in 1996, the baseball world was really rich for reform. Fans were still holding a grudge from the strike, salaries were exploding and small market teams were disappearing from the competitive landscape. In short, crisis was emerging and the existing operating paradigm in baseball was totally incapable of solving these new problems.

All of this was very bad for baseball at the time, but as it turned out, very good for me. In retrospect, I had a distinct advantage over everybody else in the industry at the time in that I knew absolutely nothing. I'd played baseball in college but that was about it. Because I knew nothing I observed everything critically and took nothing for granted. I spent my first few years with the Indians analyzing all of their systems, from contracts to player development and scouting. Because I had no preconceived notions over how an organization ought to be run, this was an education for me.

To see what needs to be done, you have to be able to pull yourself far enough away from the status quo's unquestioned assumptions to see reality for what it is. Ignorance alone is not enough, though-- you have to drive yourself to understand what the situation is, and what factors got it to it's current shape and texture.

BEYOND BASEBALL

One of the hallmarks of change is inventions. The U.S. Department of Commerce used to do a study every decade of the most important inventions of the past ten years. That list was always heavily over-populated by people no one had heard of, companies that were not leaders in their fields.

Outsiders are the ones who devise breakthroughs, and frequently they can because they don't let internalized presumptions limit their approach.

DePODESTA TECHNIQUE: INTEGRATING OBJECTIVE MEASURES INTO A SUBJECTIVE SYSTEM IMPROVES IT.

He found the existing paradigm for talent scouting and acquisition was overwhelmingly subjective. In a subjective system, the most self-confident, assertive sounding voice usually wins. Here's a little more from his piece:

In our industry we make a lot of educated guesses on the future performance of people under very stressful situations. Subjectivity will be an element in any decision we make.

The incredible thing is that in subjectivity there are a lot of biases that come into play—emotional opinions or focusing just on outcomes, or even worse, focusing on the most recent outcomes. In baseball it can even take into account the player's physical appearance or worrying about what the press is saying all the time.

Evaluation is really at the core of decision—making whether the field of endeavor is baseball or picking stocks. It was clear to me that using clearly subjective evaluation was shoddy at best. The psychological biases I mentioned, and more, were all in play. Imagine if you made a huge investment in a company after just meeting the management and never even glancing at a financial report. Your entire evaluation would be something like, “the CEO seems smart; he's got a good body on him; and I'm still really angry with that last company that lost all of our money so I'm going to do something and I'm going to do it now.”

The emphasis on the words "focusing just on outcomes" was mine. Context and luck can strongly affect individual outcomes. Let's take an example, an absolutely average batter, Lloyd Waner. Waner broke in in 1927, on the miniscus of some of the most explosive offensive years in baseball history.

Year Ag PA ........BA *lgBA .OBP *lgOB. SL *lgSL OPS *lgOPS* OPS+
+------+--------+-----+----+----+-----+-----+----+-----+-----+---
1927 21 683 100 | .355 .299| .396 .358| .410 .412| .806 .770| 110
1928 22 720 106 | .335 .295| .377 .361| .434 .420| .811 .780| 108
1929 23 726 122 | .353 .307| .395 .371| .479 .447| .874 .818| 114
1930 24 274 .41 | .362 .312| .376 .370| .427 .464| .803 .834| .94

Here's the beginning of Waner's career. A key number is on the far right, OPS+. OPS+ measures the overall effectiveness of a batter's contribution as a ratio of that of the league as a composite. So 100 is exactly average, 100 is 10% better than average, 94 is 6% less productive than average.

In 1927 Waner's batting average was .355 (.355!) and he looked great, but his other contributions, walking and hitting for power were lower than average. Even hitting .355, he was only 10% better than average (and understand, pitchers hitting count in the league average composite). The outcome was he had this high batting average and his team went to the World Series, and his brother who looked a lot like him was the team's offensive star.

In 1928, Little Poison, as he was known, hit .335 and looked great, but the league that year hit .295, Little Poison walked far less than average, and had far fewer extra base hits than average. But his outcome looks great on paper. In reality, it's only 8% better than average.

In 1929, he hit .353. same pattern. The league hit .307, and a rising tide lifts al boats statistically, even perfectly average ones.

In 1930, he managed to hit .362 while underperforming the league composite average by 6%, a remakrable accomplishment. To appear so macho and to be such a drag on his team's overall average production is pretty sad. The "outcome" was Lloyd Waner hit .362, but when you roll in context and the vagaries of chance, his actual performance was ordinary.

Outcomes are important, but you can be fooled if you don't examine them in context, if you ignore the white nosie in your measures.

BEYOND BASEBALL

Beyond baseball, this happens all the time. For example, during the 1995-99 period, it wasn't hard for brokers to make nice-looking returns, say 20% per year in a stock market that went up 27% per year compounded during that time. Chimps with dart boards could make decent returns, because like National League baseball in 1930, the it was so easy to get a hit, it made ordinary performers look stellar.

Another example: A heavily-funded political candidate who wins an election might not be a better campaigner than the people she beat, but the outcome might be affected by a disproportionate amount of money on the winner's side. The outcome though is that the winner looks like "a winner". Yes, she won, but was she the best campaigner? No way to know, because there are too many other factors.

I'll continue this exploration of DePodesta's insights & techniques in my next entry.

Baseball, like most forms of non-artistic work, is overstuffed with available information for many sources. Just as a baseball researcher might use Baseball-Reference.com or Baseball Prospectus' stat line-up or CBS Sportsline's array of numbers or buy custom research from single-man expertise shops like Eric Enders, people in the military world might use Jane's Books or free intel from their own government's agencies or send out gatherers/spies of their own or buy it from free agents, or, as sometimes happens, just make it up if they can't find anything that serves their current mission.

Each sensible creator of new information, individually, is a blessing, because she might deliver something of value that no-one has thought of or nailed before. Further, he may present something marginal that while in & of itself doesn't add much value, it opens the eyes of another researcher to a way of looking at things that enables him to produce something original and valuable.

THE CHALLENGE IS

The challenge is The Diseconomy of Scale. Yes, I know people commonly talk about the Economies of Scale, but general scale worshippers come to their conclusions from a personality predisposition that worships size, a very typical early-childhood condition that most people pass through, while some get stuck there cognitively (see the work of Jean Piaget and other structuralists on learning theories -- citations available if you write me). For every economy of scale, there are three to thirty diseconomies of scale. Generally, "More is Less."

There is so much information available, some of the valuable stuff can "disappear" in the overwhelming volume simply because no-one, not even someone with an obsessive-compulsive personality leaning, can find it all and then remember where it is.

BUT THANKS TO

But thanks to Jonny German (great baseball name, eh? Sounds like a fleet-footed 4th outfielder of the 1920s) we have a new resource for sorting it out. Like many of my favorite reference books (The Encyclopedia of Dictionaries, The Reader's Guide to Periodical Literature, et.al.) it's not creating any new content/research, it's consolidating and making navigable the infernally obese wealth of existing resources.

German's site, Batter's Box, has a looooong article on various on-line resources and on which you can find which statistics (traditional and sabermetric). If you're interested in the numbers end of baseball, bookmark it. It's an (already-meaty) work in progress.

BEYOND BASEBALL, TOO OFTEN

Outside of baseball, there's rarely a Jonny German to save your bacon. Past the Age of Enlightenment, there hasn't been a lot glory in providing value by consolidating existing resources. Part of the constraint has been organizations don't like to provide resources to synthesize or organize the info they already hold. Most finance people find it hard to understand or attach a value to the knowledge that inevitably pops up when existing knowledge is moved around and re-aligned in new relationships. And since most big organizations are dominated by finance people and the people who faun over them, and since many of the people who are attracted to big organizations are "color-blind" to the Diseconomies of Scale, leadership is rarely going to fund the Jonny Germans to clarify, organize, make into reference library quality knowledge.

If you think your own organization is suffering from too much information, take at least a five minute walk through Batter's Box and see what German has done. It'll give you one idea of how to short-cut search time when you're looking for that one kind of data you need move decisively.

How often have you seen (or even worked in) a functionally incompetent department and the executive team brought in a manager who was going to "fix it all"?

Mostly it doesn't work. Mostly when it doesn't work, it's because the expectations for the new manager are excessive and the resources made available are too low.

Sometimes, though, it does work, and when it does, it tends to work for a pair of reasons: 1) the hired manager happens to have the exact aptitudes required to attack the problems that are the depatment's current limiting factors, and 2) something that in baseball they call "chemistry", that is, whatever attitudes and talents the new manager brings to the recipe change the attitudes and intensity and team-abilities of the individuals in the group.

MOTOR CITY MAYHEM

The Detroit Tigers, they of the totally miserable 2003 (legendarily bad, actually) have signed Ivan Rodriguez to a high-end salary, four year deal.

There are ton of reasons why this was not a good deal for the Bengals. Without elaborating at length or arguing either side,

1. He's at an age where most elite catchers start to tail off sharply, so a long contract is a tar baby.
2. He's been in decline offensively since 2000, though last year he flattened out and didn't decline further.
3. His defense, formerly way over the top, looks as though it's now middle or high-middle.
4. The salary given was high given this year's free-agent market, and if the market keeps going down (an unsafe presumption) the length of it could make it a "worse" application of money.

From a statistical point of view, the deal as finalised is pretty unsightly.

Old-line baseball men might defend the deal. They like to believe in "character" and "chemistry", not-measureable intangibles that affect outcomes. They hold to a belief that certain guys who, in and of themselves, do tangibly little to help their team win actually do create a better chance of winning through their way of being.

Mostly, that's an excuse for intellectual laziness or innumeracy. BUT...

THE CATCHER WAS AN EGG-WHITE

BUT...the team lost 119 games last year. We know statistically that in the general case, if you don't have good players, you can't have a good probability of winning. By adding a B-/B catcher to an F- team, well, to lift a Chuck Palahniuk quote, "You might as well try to paint a house that's on fire."

That's the general case.

I believe though that in this specific case, that if I-Rod doesn't go suicidally depressive between the weather and the losing, he's potentially more valuable to the Bengals than he is to most other teams. And, no, it's not his "winning character". It's something I believe doesn't have very much value in the general case: It's chemistry, literally.

All our systems, our sims, tend to greatly-distort or even break down at the extremes. The Tigers last year were at such an extreme (3-5 Rule V guys, >110 losses) that typical statistical analyses may not (or may) be reasonable. They were just too many standard deviations from the norm to conform to general rules.

On a team with some "veteran leadership", adding more is a low-yield strategy, yes, but on a team where most of the guys would get carded entering a tavern and with no-one who's a legitimate chance to be elected to an All-Star team, a single I-Rod type guy can have a disproportionate additive value, like an extra egg-white in a cake recipe.

I-Rod could be an extra egg-white, an ingredient while not tasting like much or weighing much itself, changes the chemistry of the recipe, and makes the whole thing rise more than it would have otherwise.

It's not magic. It's simply human behavior. Bring in a guy with a career the other ballplayers respect and look up to, and when he offers his own lessons, the set he's mastered, he's likely to get listened to more. If the team was a third place team with a bunch of jaded vets, he's not going to turn it around much at all. But the liklihood of his being listened to, "followed" to some degree, goes up, becuase the situation is so bad virtually everyone knows they must be open to change and learn to do things better.

BEYOND BASEBALL

This is a lesson you can apply outside baseball. I frequently encourage young managers I'm mentoring to take on the really ugly assignments if they want to make a mark. There are a couple of guidelines I like them to lay down, though.

First, everyone should already know the department really sucks, and be able to admit it. If management is harboring illusions or even just doing the CYA thing of acknowledging privately but puffing publically, it's no good.

Second, the higher-ups have to be made to realize that if you take a terrible department and make them medium, that's a vast step forward for the organization, because that's a big delta.

Third, dire situations require broad authority. Don't let yourself get into a power-sharing role where you can't make things happen quickly, or happen at all.

And fourth, and this is optional, campaign to be given serious resources (enough to turn your department into a real winner) if you can get performance up to some acceptable measured level.

A single person can make a heck of a lot of difference. It's easier to make a heck of a lot of difference when you're taking over a department that's already gone cherry-pie time, because mere adequacy is a Mark McGwire home run distance from where they started, and because people are more likely to be willing to learn what you have to teach. And because if you don't succeed, you're less likely to be judged harshly, if that matters to you.

You could be like Ivan Rodriguez, just be being good and being in the recipe and working hard, altering the outcome, making the whole thing rise more than it would have otherwise.