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Thursday, April 29, 2004

Management By Wishful Thinking:
¿Cirilli Vanilli or Kevin Jarvis?  

Men willingly believe what they wish --
Julius "Death to Gallic Things" Caesar

If an organization faces the important (or even routine) decisions they face with a Management By Wishful Thinking (MBWT) approach, it is destined to suffer. And, as Mariners Wheelhouse blogger Stephen Nelson noted to me in a message this week, if you allow several MBWT-based decisions to cascade (that is, you try to erase the toxic effects of one MBWT decision by making another with the same technique) the toxicity compounds like credit card debt, and eventually the management effort to remediate the waste (overhead) is greater than any effort left available to do something positive (work).

I've written about MBWT before a couple of times, including in this entry. It's common in baseball, and is actually worth pursuing there in small doses when either (a) the team has no resources and options, or (b) has nothing at risk if the optimistic possibility fails to deliver. That is, you don't want to make an MBWT free agent signing for big bucks for a guy who is going to be your clean-up hitter if he's to be the only right-handed power on your team, but you might take a risk on a low-priced swing man (a long reliever who tends to pitch less important innings and can start occasionally when the starting staff is beat up) as the San Diego Padres did this year with the once-very-good Ismael Valdes.

In this off-season, the Seattle Mariners did a classic toxic waste swap. The deal was inspired because they had traded for Jeff Cirillo after the 2001 season in a deal that had a powerful element of wishful thinking in it. He was a fine fielding third baseman who had had a decent batting average and some line-drive doubles power, the kind of hitter that is usually not hurt as much by the Mariners' home park. They had signed him after two bad years but paid him a salary high enough that if the optimistic thinking around his performance didn't actually materialise, his contract would be a tar baby -- his value would be too low to trade him because no one would want to take on the blubbericious contract. Sadly, Cirillo continued to degrade at the plate to the point he became a Milli Vanilli batter -- he appeared to go through the motions, but he produced nothing.

Strong organizations face a failed MBWT decision that fails with a hard-headed approach. The hardest-headed approach would have been to cut him and eat his $6 million salary. Teams rarely do this. The fallback position is to find a team that wants to take a flyer and do cost-sharing, that is, pay a bunch of his salary so that the risk of taking the MBWT failure is lower. Another, equal fallback position is to do a toxic-waste swap, finding a team that had parallel afflictions and hoping that you might be able to squeeze value out of the roster-plaque that they couldn't. Your trading partner, of course, is wishing for the same thing.

The M's took on the worst overpaid back-up catcher in the majors, a good and accomplished bench player and the worst starting pitcher with a nine-year career, Kevin Jarvis. If you look at his career, it's a tribute to MBWT, and a miracle that any team would pay him the big bucks he gets in his contract, but not just one, but several teams have taken him on as a project and failed. His on-field performance is so consistently sub-mediocre it's redolent of Boom-Boom Beck, the most legendary long-career roster plaque ever. The very best year of his previous 9 in the league, that is, the absolute top of what you can reasonably hope for out of Jarvis is a PRO+ of 100 (that is, the exact major league average). That year for Jarvis was four years ago when he was 30 y.o. and uninjured. The highest upside one could draw to here realistically would be mop-up man, a role there are, as Steve Nelson noted, a whole bunch of $300K guys around to fill and actually benefit from.

To sweeten the deal for the Padres, the Mariners threw in about $4.8 MM cash and a minor leaguer who might end up being a useful player.

The Padres turned two MBWT contracts into one bigger one and got cash. The Mariners turned one MBWT contract into two and paid 60% more cash out than the annual salary of their best hitter, Edgar Martinez.

This is what Steve Nelson referred to as the cascading effects of compounding one MBWT into multiple ones.

BUT WAIT THERE'S MORE...

The thing that can sometimes surprise you in a toxic-waste swap is the guy you get can have a good Spring training line and you might find a team desperate enough to take him on. But when Jarvis had an extremely-terrible Spring, (4 games, 15.2 innings, yeilding 19 hits and 7 walks and an ERA of over 8.00), there was nothing left to do but waive him (send him down to the minors and hope someone would claim him and his albatross of a salary on the way) and when no one claimed him, let him pitch in the minors where he could experience success.

The MBWT that failed in Spring training persisted with another instance, though. They let him be their mop-up man in April. While he pitched well enough in five games, he pitched them out of three games they were in (by pitched them out of games, I mean when he came in they were behind but had either momentum or short leads to overcome or both, and by the time he was finished they had neither). The M's, by the time they cut him, had worked themselves into a 6-13 hole. Not his fault, but he did seal the coffin on at least three games they were in and did manage to get his 2004 ERA down to 8.31..

Why did they keep him around in April? MBWT again. They kept hoping he'd have enough good outings that some team would take a flyer on him. They had so much money invested in him (he's getting paid 40% more than Edgar Martinez) they just kept hoping they could salvage something. But having already let the Cirillo acquisition MBWT segue into the Cirillo purge MBWT, they re-compounded it with this April MBWT.

Does this mean the Mariners are necessarily a bad organization? No. They are explicit in not running the team to win pennants, but to turn a profit, so their goals are more to field a "good enough" team than a very good one. To some degree, their ticket sales have suffered from thei less than successful season start, but it's not radically affecting their Goal. They generate a ton of cash, so the cash they threw into the Cirillo deal, while it could have been better spent elsewhere won't markedly affect the bottom line. The overpaid back-up catcher is being their back-up in Tacoma, their AAA team, and hitting well enough to be a minor league back-up. And they did get a wonderful pinch-hitter

But not biting the bullet on the Cirillo deal meant they "fixed" it by acquiring two problems while shelling out more cash than the salary of their best hitter. The only positive is that the good bench player has been a good bench player for them, something they needed very desperately.

BEYOND BASEBALL

MBWT is much less likely to work out outside baseball, though it's almost a common.

I did a marketing consult for a computer company (let's call them Staleco) that had strength in a line of products the customers loved, but that were considered too staid and prone to become commodities by the investors the company was trying to attract. Staleco acquired a small firm that did software in a very different market the MBWT investors thought would be hot because they read it in the financial press (a notoriously awful way to learn about upcoming technologies -- the financial press stends to be technically unsophisticated, with the sole exception of Stephen Manes' column in Forbes -- and to get past the editors, most trends stories have to have been fed to the journal by stockbrokers with an agenda.).

The new software didn't sell well. The investors said Staleco needed a broader line to be first to market and successfully seal off competitors. So they shifted resources off their strength to (MBWT) beef up their offerings in the new area. Of course, they had to hire programming talent and redesign all their marketing materials, a bonanza for consultants and vendors.

They started to fade in their main market. They redoubled their efforts to sell the new line. Only one problem: there wasn't a market yet for the new category. The products were popular with cultists and early adopters, but it was merely a shadow of a dream of a market. The investors believed the executive management team was to blame so they had a series of demoralizing rolling purges reminiscent of Stalinist Russia, and replaced the old Staleco team with expensive, pedigreed execs they believed (MBWT) would turn the company around.

Staleco lasted about another eighteen months. The new product line is long dead. While it had some growth, it never was a proftiable segment for anyone. The old basis for Staleco's success limps on with a small crew of folk who had been with the company for a long time, ekeing out a minimalist existence when, had Staleco just stayed with that line, they might have been about the same size today and perhaps even a little more profitable than they were when they started their MBWT pinball, frenetically bouncing from one hope-based brain spasm to the next.

Have you seen this kind of cascading MBWT chain? Or do you work in an organization that while, like most, it can make a big MBWT blunder, it can also suck it up and be realistic in its clean-up decision-making?


Tuesday, April 27, 2004

¿Who's The Frelling Manager Here?
When Bile is Dodger Blue

 

Major league baseball, more than almost any endeavor outside of fire-fighting, has the highest concentration of hyper-competitive individuals who are also proven competents. The rigor and marathon work in the minors vet most everything up to the merely-excellent, leaving cream. Moreover, to succeed, most ballplayers need to be unrelentingly competitive.

In your own organization, you probably have a few highly competitive people, and if you're lucky, they're competent, too. Occasionally, one of your competitives will put pressure on you to change your mind to do things their way instead of your way. You need to be open to this. Staffers all know some things you don't, and each is likely to better at some things than you are. That's a given, like gravity, the intoxicating smell of fresh-baked bread, or the difficulty of explaining the infield fly rule to someone who has never seen a game before. But there will be many times you have to insist on your own way.

Rarely do you get to hear a famous person do it. In the following paragraph, there's a link to a piece of audio, an instance of a manager doing just that. If you're at work and your speakers are on, do not play this. If you're offended by cursing, do not play this. If you've had a rough day at work, do not play this.

There are right ways and wrong ways for a manager to insist on making a decision. One of the worst, albeit somewhat effective short term, ways to do it is a Tommy Lasorda approach, recorded here for you to play back (warning: ultra-strong, industrial-strength cursing). In the 4th game of the 1977 World Series between his L.A. Dodgers and the New York Yankees, he goes to the mound to take a hyper-competitive starting pitcher, Doug Rau, out of the game. Rau hasn't been hit very hard, but Yankee batters are getting on base against him. Lasorda already knows he's going to take Rau out. And he pulls an unusual approach.

Two cautions on the ultimate truth of this story. First, Lasorda had volunteered to to have a radio-transmitting microphone on his uniform for the television broadcast, so he may be hamming it up for the audience. Second, he admits right at the beginning to his pitching coach that he's going to stall to allow his reliever to get a little extra warm-up, so embellishing his approach here may have more to do with burning up time than it does his general approach to Rau.

When Lasorda gets to the mound, Rau has no idea the decision has been made; Lasorda isn't committing with his body language because he's stalling and doesn't want the umprire to come to the mound quickly, so Rau has no cues. The pitcher tells his manager he feels good. The manager blows up and let's it rip, pointing out there were four hits made. Rau tries to be brave and tells his manager he can get the opponents out. Lasorda's having none of it, his mind is made up, and just in case Rau might have a shadow of a dream of a glimmer that he might have a chance to stay in, Lasorda amplifies the personal attack. Rau shifts gears...he still wants to be in the game, but instead of insisting, he starts whingeing.

Lasorda doesn't want to hear any more. "I'll make the !#$!@ decisions here...I'm the manager of the team and I gotta make the decisions to the best of my ability. It may be the !#$!@ wrong decision but I'll make it".

Lasorda is sending the correct content, but with terrible form. And he gets so carried away that when another player comes to the mound to politely intercede, Lasroda chews his legs off, too.

I was a bit surprised to hear Lasorda take this approach, not because I thought he wasn't master cusser, not because I thought he was a polite person (he was well-known for being rude to reporters, but they are reporters, not his own players). I was surprised because he always made a point of differentiating himself from one of his early managers, Clay Bryant, who behaved precisely this way to Lasorda. I wrote about that approach late last year.

BEYOND BASEBALL

There may come a time that you need to channel the Bad Tommy on this sound clip. But about 19 times out of 20, this is a terribly short-sighted approach that may give you what you want in the present at the cost of repeated undermining later.

You have some advantages if you're not in baseball. The first is that you have fewer hyper-competitives, and most of those won't be competent, so it's easier to dismiss their high pressure tactics. The second is, you have a little time in most cases, at least more than you would as a baseball manager or a fire captain.

The proper way to deal with a hyper-competitive you're either giving constructive criticism to or taking an account from or asking for something different than what they believe they should be doing is to:

  1. Tell them you're going to ask for their opinion, but that you need to say your piece first.
  2. Clearly, tersely and with no modifers (sorta, kinda, maybe, perhaps, a little), state your decision.
  3. Invite them to respond.
  4. Listen.
  5. Take five minutes away from the hyper-competitive to consider what they said.
  6. Come back with the decision (yours, theirs or something in between) and stick with it if it's going to go against the hyper-competitive's argument. Yielding at this point is destructive and will encourage everyone on staff to push back. Some will do that just for sport.

As a last resort, remember these words: I'm the manager of the team and I gotta make the decisions to the best of my ability. It may be the wrong decision but I'll make it.


Friday, April 23, 2004

The Quotidian Cramp: Prospectus Team Wraps,
& Doing What Needs to Be Not Done.  

In baseball, as top announcer Jon Miller would say, “Life is everyday, though we may not always be ready for it...teams have to play regardless of who's on the roster virtually every day throughout their long schedule.” At least, according to this article in Thunder Bay's Source.

That every day rhythm grinds down the players, exposing the weaknesses of individuals, both physical and mental. A lost opportunity or mistake here and there affects a game or two here or there (only 1% of the season) and it makes the difference between never even getting into the playoffs and winning the World Series. It works this way in non-baseball organizations, too, too, much to the detriment of

The length of the season, the quotidian parade of events, means baseball reporters and analysts face the same grind the players do. Columnists with thrice-weekly columns have to crank them out whether they have anything to say or not, and like a leadoff hitter with a leg cramp, sometimes they gut it out and get from first to third on a single, and sometimes they fall flat on their faces and writhe around like a bucket of sea cucumbers.

Even the best suffer the results of the grind. Baseball Prospectus, a purveyor, nay a veritable pipeline of fine information I relish, features regular, rotating three-team wraps that catch a reader up on current items of interest on each team. Which means each team gets a spot in a lineup whether there's anything interesting to say or not. Take day before yesterday's wrap of the Dodgers, Twins and Giants.

On the Dodgers piece, the (anonymous) author took on the most interesting season start, because the consistently lackluster Dodgers blew out of the gate with a 9-3 record. The author points out some interesting small sample facts, although bothering to present them is something that doesn't add knowledge (the samples were so small, that if during the period Adrian Beltre's swell-looking performance that delivered .353 BA / .361 OB were trimmed by just one hit and one walk, would have been a lot less crunchewy at .324 / .324; add two hits to Dave Roberts' weak-looking .237 / .404 and you get a lusty-looking Joe Morgan-like .290 / .436).

The article goes on to argue Jeff Weaver is having a slow start and then shows a table with one good and two bad ones. Hardly a "start" at all. This is just filler, factoids that consume toner on paper and electrons on the internet.

In the Twins' wrap, the author suggests Kyle Lohse's performance is improving because of this three start sequence.

Date ...IP H R ER HR BB K ERA ...BAA
Apr
.7 4.0 9 5 .5 1 ..3 4 11.25 .450
Apr 12 6.0 7 5
. 5 1 ..2 2 9.00 ..348
Apr 17 6.0 6 4
.4 2 ..4 5 7.88. .319
BAA = batting average against

Essentially, no. The second and third starts are both bad, but in different ways. I'm not suggesting Lohse isn't improving...maybe he is and maybe he isn't. But this table can't tell you either way. The Quotidian Cramp brought on not by lack of diligence or intelligence, but just having do deliver something.

BEYOND BASEBALL

This happens outside of baseball all the time. Organizations hold regularly-scheduled meetings to cover a set of topics, and in weak (that is, the overwhelming majority of them) I call these "Overhead Meetings". People bring their overhead slides. The meeting marches through the agenda, item by item, rarely a person with nothing real to add having the mojo to just admit there's nothing important, but usually instead filling the quotidian requirement of "a report", "an update", "a heads-up". And it's self-amplifying...once it becomes obvious everyone is going to say something whether they have anything to add or not, everyone starts to conform to the dysfunction, generating time-fill the way New York City consumes land-fill. People glaze over, consuming time, but also losing focus when they go back to work, knowing this effort is just overhead, wasted oxygen, their empty stares aimed not at the speaker but overhead, wishing they were elsewhere.

But this effort extends to things like regular organizational newsletters, monthly rah-rah meetings, press relations departments where, to justify their existence, they crank out meaningless drivel occasionally to make it appear they're actually working.

This overhead saps departments and entire organizations. The quotidian cramp will take the edge off your game if you allow it to. It takes courage to stand up in a meeting and be the only one to not time-fill, or to entirely cancel the meeting when no-one has anything to say that wouldn't fill a short e-mail message. It takes courage to cancel a newsletter for lack of substance that publication period.

It takes courage to overcome the interia of the daily grind. But it takes overcoming the daily grind to win the pennant.


Monday, April 19, 2004

Correction. Reed's Rule.  

About a week back, I wrote about how decisions made in one context can become entrenched and near-impossible to change, even after the decision's design outlived its value, arguing that earned run average in baseball was an example that illuminated the mutant goofiness of employer-based health insurance.

I argued the employer-based system originated in the 1950s, but I was incorrect. Thankfully, Dr. Matthew Reed of County College of Morris corrected me:

A slight correction on your health-care metaphor: the employer-based system arose in the 1940's, not the 1950's, as a way to get around wartime wage freezes. Since companies couldn't raise salaries to attract workers, they used 'fringe' benefits, instead. President Truman saw the inanity of this strategy, and proposed a national health care system, but was defeated because the need hadn't yet become obvious.

(By the time it was obvious, the institutional interests against change were too strong.)

I'm not sure it really changes your point (it may amplify it, actually), but

Matthew Reed, Ph.D.
Division Dean of Liberal Arts
County College of Morris
Randolph, NJ

I argued in the piece that the environment in which employer-based health care was made was a time the inhabitants thought would go on forever, much as mid-1890s hitters thought the juiced ball they tattooed around band-box stadia would endure into the great hereafter, not knowing that the league's team owners would deaden the ball and bring about the thumpless Oughts, with punchless seasons in the mid-decade 1900s.

Reed's correction & observation that it might even amplify the point is an interesting addition on his part, and illuminating.

Because employers during the war didn't believe the war would go on forever. They created this system merely as a temporary improvisation, and that makes it more agonizing that we have this Albatross around our necks, an model as unpopular & unappetizing as Compassionate Stalinism, as lingering as a $50 million multi-year Mo Vaughn contract, as fragrant as Albany, Oregon, as popular as the deep-fried burritos at Baltimore's Memorial Stadium concession stands.

REED'S RULE

If processes and systems that are almost universally detested (¿isn't it interesting that people twitch in fear about "universal health care", but are passively accepting of "universally-detested & ridiculed & proven beyond-a-doubt both expensive and ineffective health care"?) are difficult to root out, it's no big surprise that we can't root out the merely silly or passé assumptions such as the "value" of earned run average, what I will forever now call Reed's Rule (not to be confused with Reed's Rules)

Thank you, Matt.


Saturday, April 17, 2004

The Joe Torre Conundrum:
Self-Awareness as Strength or Weakness?  

Joe Torre is the most wonderfully self-aware manager in the Majors. I don't know if he was always this way, but if you read his pseudo-management book, Ground Rules for Winners, self-awareness cascades off the pages like water off a wet tarp being rolled up after a long rain delay. Self-awareness may be his second greatest strength (the ability to absorb all those damned hit points off the functionally-sociopathic King George and still look and act calmly has to get the gold medal).

Self-awareness is Third Base in the Management by Baseball model, the ability to reflect on your own ideas, emotions, experiences at work & away from it, and then act on that knowledge by preventing your own inner demons or prejudices or limitations (or for that matter, your aptitudes & abilities) from skewing your decisions or actions or plans away from external reality.

Thnaks to Baseball Primer, I found my favorite regular baseball columnist, Steven Goldman, wrote yesterday about Joe Torre and used the Bill James "manager in a box" tool to break down various components of Torre's style as a (baseball) manager. There's a great Torre lesson for managers in non-baseball organizations in the following section of the analysis:

IS THERE ANYTHING UNUSUAL ABOUT HIS LINEUP SELECTION?
He has something against catchers who can hit. With the Braves, he kept Bruce Benedict in the lineup, even though he had the switch-hitting Bill [actually Biff] Pocoroba on the bench. Not that Pocoroba was Yogi Berra, but Benedict couldn't hit at all. In St. Louis, he moved Todd Zeile, who was a good hitter but a poor receiver to third base and kept Tom Pagnozzi, who was the opposite, behind the plate. When he came to New York, Torre urged the Yankees to let go of Mike Stanley and sign Joe Girardi, then kept Girardi for a couple of years after the emergence of Jorge Posada made him expendable. This is quite odd considering that Torre himself was a defense-second catcher.

I'm going to suggest that Goldman is being arch in the first sentence...I'll argue he's really saying, "He has something against catchers who can't field".

Torre was an All-Star with the bat for a catcher, but was not an outstanding defender. I saw him play in about 20 games I attended and probably 40 more on television during his career (small but not meaningless sample for this purpose), and my wrap on his defense would be: strong arm, slow release; heavy legs, no quickness, soft hands, looked mechanically sound, good at working the umps, slow up the line to back up first on grounders, didn't make stupid mistakes or flub catchable pitches. A solid receiver who wouldn't embarass himself, but was not the poster boy for catcher defense.

KNOWING YOUR LIMITS IS GOOD

As a manager, knowing what you can and can't do well is an essential first step in applying self-awareness as a benefit. Catcher is the most mentally demanding position on the field, and requires total concentration on every pitch, which is why you'll rarely see receivers who while being immensely gifted tend to drift mentally (think Jack Clark or Manny Ramirez) playing the position, while you can find multi-year careers from guys like Bill "My Middle Name Is Better Than Yours" Bergen and Moe "I Don't Need No Stinkin' Middle Name" Berg who were mentally and physically sharp if nowhere near complete players.

So most players who take the field as catchers in professional competition pay a two-fold price in their hitting: the wear and tear, up and down, overflexion motions and more-usual-than-elsewhere catastrophic collisions tend to erode the health of most humans who play catcher more rapidly on the average than players who take other positions. And the relentless focus on every component of every event at home plate that makes for a great defensive catcher drains focus from hitting craft and investing ergs on in-game observations that help hitters.

Management gravitational field: If you're someone who hits a ton but is ordinary at your key position on the field, you're likely going to gravitate to one of two extremes. 1) The most common, that is, presume, "If I didn't need to field, then neither does this player". In other words, whatever I am/do must be the right way because that's how I am/do-it. Or 2) "Shoot, I know how painful it could be when I couldn't turn things around for my team because of my limitations, so I'm going to make sure we have this missing ingredient". In other words, the desire to dampen what one's own limits were by recognizing and accentuating the complements.

The first, majority, approach usually undermines the manager's success, and shows a lack of self-awareness, although it's possible someone has thought through the implications and decided the pattern is generally valuable.

The second approach usually shows off self-awareness.

OVER-COMPENSATING FOR YOUR LIMITS IS BAD

The challenge is the inspiration of managing against one's weakness can show either great insight or over-compensation, and rarely something "just right".

Goldman believes (I think) that Torre overvalues the thing he himself didn't do well, that investing too many at bats in defense only catchers is frittering away precious outs, and that his teams probably would do even better if he shifted towards catchers who can hit. In defense of his position, if you run the math, it's easily proven that if you're a good enough hitter, you can overwhelm any defensive disadvantages your game may have. And I agree with him at the extremes -- a 90th percentile hitting catcher who's a 10th percentile for fielding is much better for most teams than the obverse case, the 90th percentile fielder who's a 10th percentile hitter. But defence is not a straight-line function (twice the range for a player at each position simultaneously result in stopping stopping twice as many runs).

Some teams, because of the context of what they bring to the lineup and put on the field, can do net-better with, say, Jorge Posada (very good hitter, mid-range defender) over Mike Piazza (over-the-top hitter, net-negative fielding), although on paper, Piazza's statistical reality stomps Posada's into the Sixth Circle of Dante's hell, comparitively. The general case will almost always have contextual variants that make it less true, or even untrue in other contexts.

The question, for which I don't have an answer, is this: While Torre's decision is insightful and self-aware, is he over-compensating? ¿Is he autonomically over-valueing that which he felt he couldn't do himself?

BEYOND BASEBALL

You see this all the time in organizations outside baseball, and it can be pathological. I've worked as a staffer and freelancer for a bunch of weekly newspapers. Weekly is the toughest deadline environment of all. Counter-intuitive, I know, but it's true. At a typical daily, there are multiple editions, and some news that's news on a Tuesday is still news on a Wednesday, so if you miss that deadline, you can reshape the article and get it in the next day. At a monthly, of course, almost nothing is really breaking news, so if you miss the dealine, you can pretty much run the piece the following month. But at a weekly, news is as dead as Jeff Cirillo's career if you miss teh deadline by 30 minutes.

Reporters tend to push deadlines and are MBLMHE (Management By Last Minute Heroic Effort) type personalities. Editors, people who manage reporters tend to be reporters who were promoted. Ergo, most editors are people no good at personal time management themselves.

Editors assume that all reporters are as bad with deadlines as they themsleves are. Editors, therefore, generally lie to reporters about the real deadline. It builds this pathological complex compound infrastructure of obvious lies in an organization that makes scheduling and deadlines a dysfunctional malignancy, undermining in the general case, and an existential nightmare for writers like me who happen to be really good at meeting deadlines (I'm sort of the Tom Goodwin of reporters...my production is not better than most of my peers, I just get to home plate a lot faaster than any of them).

One more case. A company with a good process for quailty control but that that has been sued once 15 years ago for product liability will become terribly gun-shy and over cautious about every product they release, creating all kinds of overhead processes to "trap" potential problems. Sort of a 180 degree opposite of the Ford accountants' decision to let the Pinto gas tanks explode under people driving the car because it was cheaper to pay out law suit awards than it was to change the design.

Are there managers in your organization who ignore weaknesses of their own when they appear in other staffers? Are there managers in your organization who pathologically overfocus on their own weaknesses and turn them into giant piles of overhead?


Wednesday, April 14, 2004

Decisionmaking Diamondvision-Style:
The Scoreboard Made Me Do It  

About the only actual advantage most American males have as managers over most American females is when the males were about 9 years old, they knew not only how to calculate batting averages, but had the realization that it was as important to ongoing survival as, say, memorizing the names and "Days" of every single saint would have been to a medieval peasant. That kind of demented mental exercise builds the habit of playing with numbers, which leads to increased numeracy. That, in turn, leads to a level of comfort with, even attraction to, roughed out metrics.

To be adequate as a manager you have to be operationally effective (First Base in the MBB model), and the decisions you make in that zone almost always involve some level of working out rough-draft numbers.

If you're not comfortable roughing out numbers, let me tell you, it's all about tricks and techniques. When I was a kid, I grew up half the time in Great Britain, where not only was there a required Math class, but an additional one called Mental Arithmetic, equal in emphasis & also mandatory. Now let's agree the the Brits' need for this was much greater before they changed their currency, because there were 4 farthings to a penny, 12 pennies to a shilling and 20 shillings to a pound and 21 shillings to a guinea, and buyers and sellers were expected to be fluent in all this. (A trivial but succulent factoid about the old British currency: it you weighed any combination of the five different silver coins, a pound of them was worth...a pound).

Mental Maths was all about tricks and techniques, creating in the mind a toolbox of short-cuts and a basic electronic calculator for doing the four basic math operations. Math is not an essential part of every deicsion you make as a manager, but those techniques and short-cuts are a vital foundation for every decision you make that involve resources, time, budget, sequencing of tasks, personnel assignment, contigency planning and when to give everyone the afternoon off. In short, to be adequate at operational management, you have to have an adequate level of numeracy. I believe from my management consulting practice that this easy mastery of basic numeracy, the ability to exercise a natural feel for scope and ratio, is one of the main reasons that European managers on average are far superior to American managers.

If this doesn't come naturally to you, if you never had Mental Maths in school, going to the old ballpark can be a great booster shot.

DIAMONDVISION DERRING-DO, ER, DEREK-DO

In his most recent Breaking Balls column at Baseball Prospectus, Derek Zumsteg does the very thing the Mental Maths teachers used to do. Using practical, real-life examples, he shows you how to break down a problem into pieces, explains the short-cuts, and informs you when to round things off. Those are the essential techniques. Once you practice working with these kinds of tools, they'll become part of your toolbox.

His examples all come from the scoreboard: Batting average, or how often does a batter strike out or walk, for example.

Once you master his, you can create your own. If, for example, I want to know what kind of extra-base power a hitter has, I use a scoreboard measuring technique I call 2b3bdex. I take the doubles (times two) add the triples (times three) and divide by the number of at bats. Anything below 10% is wimpy (the batter either doesn't hit the ball hard, doesn't run well, or both). Anything above 14% is quite good, and anything above 20% is legendary. I don't try to figure this out past rounding to the closest whole percent (after that, it's not information, it's just noise, which is why I always laugh at the idiotic defaults in computer programs that round percentages to the hundredths of a percent untill you program it to tell you otherwise).

Is 2b3bdex a valuable metric? Not significantly. If you know a lot of other things first, it's useful added texture and chiaroscuro on an individual, revealing an aptitude (or lack of one) that doesn't appear even in a fat, number-glutted Mr. Creosote of a statistical presentation like Baseball Weekly. But calculating the dex is excellent exercise, some gentle jumping jacks for the cerebrum that makes it easier to deploy at work when the situation demands running through dozens of options in a short moment.

Zumsteg's article, by itself, won't turn you into a great decisionmaker. But Derek makes it as fun as you're ever going to get it outside of a British school (hold the boiled brussels sprouts, savage canings by predtory sadist headmasters, & blanc mange; pass the treacle pudding & one-month long Easter vacation please).

If you can do it with baseball numbers, you can do it at work. If you know a manager who doesn't already have some fluency with these mental shaping techniques, send him to Zumsteg's article now.


Saturday, April 10, 2004

Why The Unearned Run =
America's Healthcare System  

It is the customary fate of new truths
to begin as heresies & to end as superstitions
-- T.H. Huxley (1880)

One of the greatest dangers to effective strategy is tradition based on good sense. The more common-sensically apt the tradition was at its inception, the more vile and dysfunctional it will become over time. There's a good reason for that.

In baseball, there's this rule traditionally used to measure and evaluate pitchers' performance: Earned Run Average. And it was a brilliant rule when it was invented. It was invented for the 1888 season, an exciting year for futurists, because the first of the modern science fiction novels, Looking Backwards by Edward "Pudge" Bellamy, was published that year. In it, he looked back on changes over time as seen from the future, the end of the 20th Century in fact.

LOOKING BACKWARDS

Michael Wolverton at Baseball Prospectus this week wrote about the Earned Run Average scoring tradition and dissed it as being fruitless. He's right, of course, but he managed to throw out the 1887 baby with the 2004 bathwater. His argument is that it has no validity, which is not true; in reality, it has no validity in the current baseball-playing environment. In spite of what he thinks, it did at one time. That's very important to know and acknowledge (which he didn't in his piece, though he probably knows it), because that's the reason it's going to be so hard to get rid of.

Here's the essence of Wolverton's piece (I recommend reading the whole thing -- I'm bound to quote some things out of context here in the interest of brevity).

Errors will happen. Good pitchers will minimize the damage caused by them. That is, a good pitcher will allow fewer runners on base before the errors happen (so there aren't runners to score on the errors), and will allow fewer hits and walks after errors happen (so the runners who reached on errors won't score).

This isn't a hypothesis, it's a fact. Preventing unearned runs is a skill that pitchers have, and it usually comes hand-in-hand with the ability to prevent earned runs. I took all the pitchers since 1900 who pitched more than 2,000 innings, and compared their earned run averages (ERA) to their unearned run averages (UERA). (In both cases the values were normalized to the league averages for the years in which they played). A couple of results:

  • The correlation between ERA and UERA was 0.36 -- not overwhelming, but pretty strong. That suggests pitchers who are good at preventing earned runs are also generally good at preventing unearned runs.
  • Of the top 50 pitchers in career (normalized) ERA, 46 of them were better than average at UERA.

What this means is that when you throw out unearned runs, you're throwing out part of the pitcher's performance. In other words, ERA is understating the run prevention abilities of the best pitchers in the league, and overstating it for the worst.

By his measure, the better pitcher is the pitcher with the lowest RA (total run average, that is, earned and unearned both). One challenge is he used data since 1900 -- not including the context in which the rule was established (although it went away for a while and then reappeared in 1917). That's like saying there was no voter fraud in Chicago in the 1950s because the incidence of it is undetectable in Boise in the 1960 to 2000 period.

Had he had/taken the time to look at 1887 (the last year before the rule was put into effect -- what is past is prologue and all that), I think he'd have seen the 1888 virtue of the scoring rule.

The 1887 season was representative of its time in that there was a pandemic of fielding errors. Burnt toast gloves not even worthy of a Mexico City barrio playground, groundskeeping practices as random and dangerous as those found in a contemporary Fallujah city park, widespread use of performance-altering subtances (alcohol, opiates) all combined to make baseball defenses the WMDs of that decade.

Just as a taste, I'll contrast some info I built between 1887 and 1987 National League averages.

.........Errors/ .....Steals ...Total Runs ..Earned Runs ..% of Runs
...........Game ......./Game ... .../Game ......./Game .....UNearned
1887
......3.6 .........2.6 .......6.1 ..........4.0 ..........35%
1987
......0.9 .........1.0 .......4.5 ..........4.0 ...........9%

I included stolen bases, because the debate raged about whether a run was earned against a pitcher if the run resulted from a stolen base, a much more important aspect of the 1887 game than it is now and something perceived then as not being the pitcher's "fault". From 1890-96, runs that would not have scored without a stolen base to advance a runner who ultimately scored were considered Unearned.

The 1887 rules builders were trying to isolate out what a pitcher's pitching meant. It wasn't clear then. It isn't now, by the way...Baseball Prospectus is still rasslin' with the enigma 117 years later, gawd bless 'em.

And while Wolverton's findings tend to support his thesis (a 0.36 correlation) that good pitchers will suffer less damage from errors, that is that preventing unearned runs is pitching, pure and simple and no different a skill than preventing earned runs, that just wasn't true in 1887. If it was true, you'd expect the pitchers with the best skill at preventing runs of any kind to also be better at preventing unearned runs. That wasn't true in 1887.

I took all the pitchers with at least 120 innings (the season was 120-something games for most teams, so I'm lowering the criterion for qualifying). I divided into three groups for Runs Allowed Average (RA, earned and unearned together) highest-third, middle-third and lowest third. I also measured them by percentage of those runs that were unearned and divided them into thirds (high, middle, and low). If Wolverton's ideas held for 1887, one would expect the best RA pitchers to also be the ones least affected by unearned runs.

Of the 10 qualifiers with the best RA:

3 were in the best third for (lowest) percentage of unearned runs
3 were in the middle third for (lowest) percentage of unearned runs
4 were in the worst third for (lowest) percentage of unearned runs

Being good at preventing runs didn't correlate well with preventing unearned runs.

Of the 10 qualifiers with the worst RA:

6 were in the best third for (lowest) percentage of unearned runs
1 were in the middle third for (lowest) percentage of unearned runs
3 were in the worst third for (lowest) percentage of unearned runs

Being bad at preventing runs didn't correlate well with allowing unearned runs.

So the rule happened. For a reason that was logical and reasonable in the context in which it was made. And that's making ERA as a criterion for performance almost impossible to get rid of, even though the current context, as Wolverton explained, makes it useless and untenable. Undoubtedly, if you nose around your own organization, you can find old sensible decisions that because of their very validity when they were writ in stone are almost impossible to dump now even though in the current context, they're asphyxiating the organization's life-force. I'll cover the most obvious example we all get to see, the dead octopus in the middle of the room, the Danny Ozark coaching 3rd of institutions, the Special Olympians Edition of Fear Factor...that is, a bad idea so obvious even Bud Zelig would be hard pressed to pursue it.

BEYOND BASEBALL - THE HEALTH CARE SYSTEM FLUSTER-CLUCK

The current context for the design for the U.S. health care system is as useless and untenable as the Earned Run Average.

The underpinning of the idea was to tie it to employment. The assumption was made in the 1950s when the economy and employment was growing, and tended to be long term for most white-collar people and union members (the middle class). Employers as a class were diverse, health care providers as a class were fragmented and, therefore, competitive. This tended to keep cost inflation down. And if you lost your job (your health care), you would likely find another job soon.

People dreamed this would go on forever, like burnt toast mitts and potholes in the outfield must have seemed to baseball players in 1887.

Now, the context has changed. The number of health care providers making administrative and medical and pricing decisions has gone way down, enervating competition. Middle class employment is contracting, and there are fewer employers making administrative and health care shopping decisions, eroding choice. The high costs of oligopolistic providers exacerbated by auto-mechanic style charges tables are crippling entrepreneurial businesses' ability to afford to buy health care for their employees and stunting growth in every part of the economy (perhaps even in health care, though it's not looking that way at the moment). It provides incentives to export jobs and to strip-mine employees (try to maximize short-term extraction and then moving on to new human resources).

Almost no-one loves this system: patients, doctors or employers. And for good reasons. The outcomes are awful (U.S. is 1st in expeditures per capita for health care, 21st among developed nations for life expectancy from birth, 18th-best in infant mortality). In short we're paying a ton, and getting mediocrity at best. While there are a fair number of people who are willing to suffer through the status quo, it seems more are afraid of the alternatives as opposed to actually liking the current system. And yet, among developed countries, there are 20 better market-based and socialized health systems that produce more health for less money than ours does.

And yet to change this system requires the same massive level of effort to overcome interia that fixing the Earned Run Average traditions in baseball does, & for the same reason: it was so sensible when decisionmakers put it in place.

How about your organization? Are they Looking Backwards when they could be looking at the present? Do you have any of these survivals? What are you doing about them?


Wednesday, April 07, 2004

Hoisted On Others' Petards:
The Mike Moore Meltdown  

If you've managed in enough groups, sooner or later you're bound to run into what I call a Mike Moore situation.

You come to the position and a fresh personnel decision has been made, usually by your own boss, that the organization is in love with and it' s a stinker. Sparky Anderson, a successful manager who won a World Series managing a team from each league, faced His Own Private Mike Moore. In the off-season before the 1993 season, the Tiger front office acquired Moore, 33 year old pitcher with a long losing record on bad and good teams.

The Seattle Mariners had drafted the Oral Roberts grad with the first pick of the 1981 draft. In seven seasons for the struggling Ms, his Won/Lost record was 66-96, and he had better than league average ERA twice. He had a reputation then for having a very good arm, a very average head and a total unwillingness to take coaching or ask for help most of the time. Moore was a first draft pick, and he acted as though he believed he must be that good and didn' t require the aid of figure of lesser stature, like a manager or the coaching staff.

By 1988, Moore's last year before becoming a free agent, he led the American League in runs allowed by a pitcher. The Oakland As acquired him for the 1989 season. The A' s had one of the most well-known pitching coaches with one of the best reputations for turning around pitchers, Dave Duncan. Moore reportedly allowed Duncan to help him harness his skill and then responded with his career year (19-11, 2.61 league-leading ERA). But his next three years with the A' s were up and down, slipping back and forth between his arrogant pattern and his trainable one.

When his free agency came up again after the 1992 season, the As wouldn' t give him the long-term offer he was looking for. The Tigers signed him to a 3-year, $10 million contract. The story is that Sparky Anderson didn' t particularly want the strong but troublesome Moore. Moore was reasonably successful his first season in Detroit. He threw a lot of innings, leading the league in games started, and his 13-9 record was a better ratio than the team' s 72-68 record in games that weren't his decisions). On the cautionary side, he gave up 35 homers, the highest number of taters any AL pitcher allowed that year, and he struck out only 89 batters in 213 innings, a big shear-off from his past pattern.

Moore got worse quickly, but the front office had pumped all this money to the aging, stubborn starter and Anderson was expected to roll him out on a regular basis to justify the investment. By 1995, his ERA had ballooned to 7.53 and batters were tattooing him with a .318 average and 24 homers, propelling him to a 5-15 record. Sparky, even with his personal credibility as a manager, either didn' t have the political capital to stop the team from riding Moore' s career death spiral into the crater, or he chose not to invest it what could have been an ugly political fight with the front office.

BEYOND BASEBALL

Outside of baseball, this getting stuck with someone else' s foolish decision happens with personnel, and it happens with technology decisions even more. In a growing or flat economy, information technology managers and executives tend to have high turn-over rates.

Hiring organizations, faced with a rapidly-evolving technology environment, feel like they need to hire people with direct experience in the efforts they are about to launch. (Notice I said "feel"; this is usually not soemthing they've actually thought out are analyzed; it's based on feelings like fear or hope). But significant technology projects takes years, sometimes close to a decade, to become firmly rooted in an organization. But the demand, and the expert' s ability to cash in on her expertise, depends on her getting ahead of the technology curve by being an early implementer. Secondly, it also pushes her to leave for a bigger paycheck before the project is established and running smoothly.

So people tend to be rewarded with better career opportunities of they grab at unproven technologies and then leave before the risky project is finished. Someone gets hired to finish these projects off. Sometimes, the incumbent had imploded and everyone knows the new ERP system was a mistake or just more costly than the benefits are worth. Worse, sometimes the run-away lover of an incumbent has effectively masked the shortcomings to protect his career mobility, Either way, managers taking an assignment frequently inherit these techno-time bombs, these Mike Moores that no-one in upper management wants to have to admit were their babies.

In the ideal world, you unleash audits of all inherited projects: where are they relative to budget, what are the goals and objectives and how well does it look like the project is going to meet them? Like Sparky Anderson, you may just choose to retire rather than put up with more Moore.

There are more aggressive alternatives. Some managers choose to struggle with their duds. For example, Lou Piniella and José Mesa, who worked out of the Seattle Mariners' bullpen for a couple of years. Acquired by the front office to put a marquee name at the closer slot, Piniella was expected to make Mesa the closer, a slot in which Joe Table was merely average but the team needed someone very good. And when the organization needs really good and you're getting just average, the result feels apocryphal-y awful. After a series of senseless Rodney King beatings (with José being the one wondering why we couldn't all just get along), the Mariner manager finally eased him into a less exposed role, though he acted as athough he believed he had to leave him exposed until it was quite apparent to everyone in the front office that the gap between what Mesa could achieve and what the team needed as a closer wasn't getting smaller. To most observers, that was too long from a practical point of view, though Piniella probab;ly read the politics of the situation better than fans did.

Like Piniella, you may be able to finesse your problem and push your low-work-value employee into a less exposed position (or trim down your low-return technology projects so you squeeze most of the benefits out of a smaller effort).

To avoid the giant sucking vortex of management mediocrity, though, action of some sort is required. Take a walk or take it on.


Sunday, April 04, 2004

21st Century Baseball's Über-Enigma:
The S.F. Giants' Nijinsky-like Anti-Gravity  

One technique widely-used in professional management is MBE (Management By Exception). Usually, organizations use it to identify something tactical that requires attention (Why is our blem rate higher on Tuesday mornings? Why is our net income surging in the Upper-Midwest? Why are cancer rates so much higher in Houston-Baytown metro area?).

It requires a world view that dictates you know what's "right" or "expected", you pretty much ignore most of the possible demands on your attention to focus on the things that are deviations from the right or expected.

Many managers who have engineer personality types or who just have a strong need for simplicity will use MBE as a primary tool, the benefit being one looks only at the numerically-measurable things (aliasing-out ambiguity and soft information) and only at the minority of those that seem "out of range" (like David McCarty slugging .800 or Adam Kennedy slugging .230 in spring training), meaning you look at even less. Given all the things one might have to mess with, it's a simplifying, if simplistic, way to winnow things down to a small set.

TWISTED PFIESTER

I like to use the MBE tool myself on occasion to explore strategic anomalies, for example when a competitor is doing something terribly wrong by most or all key standards of organizational behavior or approach and yet succeeding. If you think about it structurally and thoroughly, you frequently come up with a big surprise or two.

Sometimes it's that the key approach everyone assumes is a foundation of success is merely an artifact that neither helps nor hinders (it's standard behavior to say "god bless you" when someone sneezes, but I'll assert it neither decreases nor increases the frequency of possession by evil spirits). In these cases, you can sometimes simplify or tune processes to take advantage of this knowledge.

Sometimes it's that there are other, not-used elesewhere approaches to success. In these cases, there might be strong competitive advantages in harvesting resources that others undervalue, are phasing out of their repertoire or that no one else has discovered yet.

In the first decade of the 20th Century, Jack Pfiester earned the nickname "Giant Killer" by running up a 15-5 record against one of the strongest franchises of his time and his own Cubs' biggest consistent rival. The Giants over that five-year period played 459-307 baseball, the equivalent of being a 97-win team every year in a 162-game season. Big exception, that Pfiester should have been able to so regularly pound the Gigantes so effectively.

The opposite might be said of current Giants' GM Brian Sabean. In his first big deal as GM, he traded Matt Williams, his second best player (and only other everyday big asset) of a very good year to the Cleveland Indians for proven mediocrity Jeff Kent, promising middle reliever Julian Tavarez, and roster plaque Jose Vizcaino. Everybody, me included, was convinced the man was mad.

Williams never had another great season, Kent turned into an all-star with a bat equivalent to Williams' with five good seasons, Williams turned into a pumpkin, contributing only one good season. And Vizcaino gave them a good year of leather-work at short before becoming a free agent.

That was the first of many moves over the last six years that regularly leave astute observers, both of the sabermetric and traditional bents scratching their heads. Almost universally, his moves seem random or negative, trading lots of young talent for temporary help, signing for more money than what they seem worth as starters guy who seem like they should be 4th outfielders, or getting overvalued players like the legendarily limited Neifi Perez.

As a result, a ridiculous percentage of the team's overall production is tied up in a single, old player, Barry Bonds.

And yet.

And yet the Giants keep on contending, even getting to a World Series.

Everyone piles on. Every year it's the same as intelligent observers criticize what Sabean does and doesn't do. He trades away prospects for short-term ordinary-ness. He pays too much for it. And the team keeps on rolling well enough to contend, even over time when such a strategy, on the face of it, should lead to enervation.

Baseball Prospectus' most recent team update on the Giants, written anonymously, has three sections. The first questions Giant front office passivity in addressing overall roster moves. The second paragraph questions the decision as to who to play in right field, especially in light of inexpensive options that had been available on the market. The third paragraph rakes Sabean for addressing his emmentaler bullpen problem by the acquisition of Milwaukee Brewer rejects. Typical.

Baseball Primer's team season preview of the Giants, by Ken Adams & Don Malcolm (both much smarter guys than I) also offers much documented pessimism, although leaves in the possibility of the team contending again with around 85 wins. They note the team's #1 pitcher is on the DL for an indeterminate amount of time, their marquee closer is injured for a while, that the front office didn't manage to sign the closer's fill-in for last year, and that both the replacement starters he got for this season are proven mediocrities. They do run a chart Malcolm likes to use comparing last year's performance with career peak and average, that that holds out some hope for some improved offensive seasons.

Player         '03 OPS+   Peak OPS+  Career OPS+
Pierzynski        114        114          105
Snow              112        135          105
Durham            111        116          103
Perez              65         85           63
Alfonzo            90        150          111
Bonds             231        275          179
Grissom           104        124           93
Mohr               86        102           91
Tucker             92        117           95

In general, it appears the Giants' fate rests on the relative transcendent abnormality of Barry Bonds' offense, driven by incomparable skill, helium-abuse, edame or whatever.

MBE CASE STUDY

I've been waiting for someone to make an MBE case study of Sabean's methods. Every year, the exception in what it is he does looms larger and larger, making the obviousness of the case loom larger, too. But no solid guess with a foundation of analysis for fact has come forth.

The closest answer, the one I have to hold onto until someone makes a dedicated study is the Adams/Malcolm hypothesis: That Barry Bonds' offensive performance is so many standard deviations beyond what any one player has produced since Babe Ruth retired that it warps and destroys "laws" that observers presume are natural or normal.

If you look at the Sabean exception challenge, it seems possible that he has managed to find a seam built on that most fragile-looking of bases, the one-man show. It's not a great explanation, just the best current one.

Does your line of work have an organization that spits in the eye of all accepted processes and still kicks booty? Do you methodically analyze their approach to see what you can glean? Are there mad scientists creating weapons-grade lactose out of stale Velveeta or building pennant-contending teams out of Neifi Perez and Brett Tomko?


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