Tuesday, August 31, 2004
For every economy of scale, there are at least two diseconomies of scale--Angus' 2nd Law
I'm going off-topic for the first time in over a year of this weblog, but not very far off -- only as distant as the Olympics.
There's a common misconception taught in most business schools and economic cults -- The Economies of Scale. It's a bit of nonsense.
It's a fairly primitive concept that goes back to the kind of beliefs developing humans go through before they get to be five or six years old, during what the cognitive psychologist Jean Piaget called the pre-operational stage. Individuals in the pre-operational stage think, for example, that if you put water in a tall narrower glass and the same amount of water in a shorter wider glass, the taller glass holds more water because it's higher. Experimenters have shown you can actually demonstrate the truth by transferring the water from one glass to the other and showing they hold the same, but the preoperational observer will still likely believe their previous understanding and not the truth. In adult belief systems, we call this "a cult".
Bigger can be better. But it's more usual for it to be worse when the object getting bigger is a human-designed system. While Economies of Scale do exist, for very Economy of Scale there are generally two or more Diseconomies they create. For-profit businesses and governments tend to share this effect the most.
If you've ever worked in a small start-up, two to five people, creation and implementation tends to be fluid and frictionless. Everyone tends to know what they need to know about what others are doing because they share a working space, overhear each others' work talk, share ideas, or just catch things as they go by. Generally, if one person in such an organization asks a question of another, they don't hear back, "I'll get you a memo next week". If you ever saw small remote government offices working, you could well have seen something identical. Soil Conservation Service offices worked the same way, very knowledge-rich and delivery oriented.
Shop at Wal-Mart, buy a project from Bechtel, try to launch a new product at Microsoft, try to get information to the right person at the F.B.I., you have a serious overhead problem. That effortless fluidity becomes thinner and thinner as the organization's scale increases, and people start spending work trying to make work actually work. There are procedures manuals (and full-time people who do nothing more for a living that documenting them, while others distribute them), memos, web-based portals, newsletters, come-to-Vishnu meetings, there are e-mail messages and phone calls and ectoplasmic channeling seances. And this all happens no matter how wonderful and committed and pure of heart and deed the massive-organization contributors are. All that overheadof standarization and communication is an inefficiency tied directly to scale -- the enemy of quality. All that overhead is getting expended by large organziations to try to recover the effortless knowledge diffusion and ability to make quick decisions of the entreprenurial start-up.
There are people who still believe in the Economies of Scale and not the Diseconomies because they already believe in that and many people who appear important believe it, too. It's as hard to disabuse people of this as it is to disabuse a pre-operational human of the idea that the taller glass will always hold more water.
But this month's Athens Olympic Games proves the point beyond any doubt.
There are several ways to look at Olympic medal standings to gauge the winners. It's rare, but some innovative people look at medals/GDP. Most measure it by counting the most medals. Some count the most gold medals.
If you look at the table of the 2004 medals in either of the two most common measures of winning, the clear winner was the U.S.:
Nation Gold Silver Bronze Tot. United States 35 39 29 103 China 32 17 14 63 Russia 27 27 38 92 Australia 17 16 16 49 Japan 16 9 12 37 Germany 14 16 18 48 France 11 9 13 33 Italy 10 11 11 32 Korea 9 12 9 30 Great Britain 9 9 12 30 Cuba 9 7 11 27 Ukraine 9 5 9 23 Hungary 8 6 3 17 Romania 8 5 6 19 Greece 6 6 4 16 Norway 5 0 1 6 Netherlands 4 9 9 22
If you look at most gold medals, it was the U.S., which also seemed to win the most total medals. If you look at it by population, probably Australia with 1/15th the population of the U.S. and 1/2 the medals would have to be a contender, followed by Cuba at 1/25th the population and 1/4 the medals.
In reality, though, it's none of those countries. It's the old Soviet Union.
If you look at the nations that were parts of the Soviet Union before they broke up, and add their medals as a unified country, they outstrip all these other pretenders, and there's a good reason for it. First the table of ex-Soviet nations.
Nation Gold Silver Bronze Tot. Russia 27 27 38 92 Ukraine 9 5 9 23 Belarus 2 6 7 15 Georgia 2 2 0 4 Uzbekistan 2 1 2 5 Kazakhstan 1 4 3 8 Lithuania 1 2 0 3 Azerbaijan 1 0 4 5 Latvia 0 4 0 4 Estonia 0 1 2 3 TOTAL 45 52 65 162
The nations that made up the old Soviet Union inserted into the table of leaders make piroshkys out of the competition.
Nation Gold Silver Bronze Tot. USSR 45 52 65 162 United States 35 39 29 103 China 32 17 14 63 Australia 17 16 16 49 Japan 16 9 12 37 Germany 14 16 18 48
It's just a bloodbath. The Soviets, when they existed as an empire, were very competitive, but never on this scale. Since the break-up into all these independent, different nations, the amount of investment in sports has mostly gone down. The prestige of being an athlete has gone down. The social benefits of being an athlete relative to others has gone down. The factor that made this possible is...
THE DISECONOMY OF SCALE
The giant unified Wal-Mart of an empire that was the old USSR, no matter how hard they tried, no matter how skilled their coaching and development theories, no matter how much resource they dedicated to being best, couldn't ever fully achieve their quality goals because they were too frelling big, too bound by the diseconomies of scale.
After the break-up, coaching and training systems diversified. National institutes each examining multiple theories to try to get an edge blossomed. Diversity and competition reigned, and the medals, as a result, have rained, too. Certainly, there's a counter-factor I should mention...in many events there are a limit to how many competitors any single nation can enter, so by being ten teams instead of just one big Bolshoi one, there were probably more entrants from old Soviet countries than in the old USSR team days. But the athletes still had to compete and seriously to get that deluge of medals, and again, there's a diseconomy of scale in entering as one massive blubbericious mega-empire instead of as ten smaller indies.
The Diseconomies of Scale are a set of powerful gravitational fields you can never get rid of but you can fight and temporarily (overcome) sometimes. It's not a deterministic, inevitable doom thing, just a chunk of overhead you have to pay for as long as your scale is bigger than natural or you exist in a monopoly or oligopoly. In general, beyond a very small size, increasing scale is the enemy of effectiveness and efficiency.
A SIDE NOTE: OLYMPIC BASEBALL
For those who didn't get to see it this year, it was (at least the bits I got to see on Canadian television) very exciting. There were great upsets, tight duels that Wes Westrum would have called "real cliffdwellers" (the Aussies beat the Japanese team 1-0 in the semi-final game), and all the teams seemed to play with a lot of élan. There was no "dream team" silliness, no major league pros (with the exception, allegedly, of the Japanese team, which brought in, apparently, some all-stars), and a lot of mutual respect on the field (which is something the U.S. men's basketball teams would do well to emulate).
I personally found it sad that NBC chose to pretty much ignore baseball because the U.S. team failed to win a spot. I suspect there are as many Americans who would enjoy seeing Greece play The Netherlands in baseball as watch an American come in 32nd in the Australian Rules Synchronised 3-meter Whitewater Judo semi-finals (hey, there were Little League games shown on t.v. during the week they were playing the baseball medal games...little league games -- I'm sure there are some rotisserie baseball fanatics out there who hope to scout a 2012 draft pick, but jeez...).
If you want some sabermetric analysis and stats from The Games, Clay Davenport did one of his translations studies (to try to establish a level-of-competition comparison against the major leagues). It's over here at Baseball Prospectus; keep in mind, these translations are always composite averages, so they are usually very true for the group, while, because people are all individuals with individual variations, they are not usually very true for any single individual.
And in case you didn't hear, the gold medal went to Cuba, who beat the Aussies 6-2 in the final game. The Aussies play baseball the way they play everything else, a nation of full-tilt Minnie Minosos. And the Cubans in formal international competition always play exciting ball, even if they're not always playing great ball.
It couldn't have been a more exciting match-up, and from a pair of countries where they understand that Better is Better, and Bigger is just Bigger.
Monday, August 30, 2004
Usually, the sports media is naïve about management, both on the baseball field and in other organizations.
Occasionally, however, a pundit produces a howler of such monumental, breathtaking absurdity that it shatters the environment as profoundly as rhinoceros flatulence on a peaceful Sunday trip to the local zoo. I can only hope Buster Olney was being sardonic in his column Friday, because he has produced 2004's most stunning counter-example of good management advice.
His piece was looking back at the trade "deadline" deals four weeks later. That's a pretty silly piece to be writing (it's premature, for most of the teams who were in the race are still in the race; the small difference you can make with a deadline deal will only tell in the standings at the end of the season). But in talking about the Mets' deadline deals, Olney makes an assertion that's jaw-droppingly destructive. Here's the set-up:
THE METS: There might only be a handful of deals in the history of major league baseball that would surpass the rapid unraveling of the Mets' trades. There was Frank Robinson for Milt Pappas before the 1966 season, when Robinson went to Baltimore and immediately won the Triple Crown. And the Red Sox ascertained pretty quickly that selling Babe Ruth to the Yankees probably wasn't too smart.
With other one-sided trades, like Larry Andersen for Jeff Bagwell, it took some time for the deal to shake out. But in less than a month, we've already got strong indications that the Mets made serious mistakes.
They traded three of their top five-rated prospects for veteran pitchers Victor Zambrano and Kris Benson, deals that were supposed to improve the Mets in '04 and beyond. The Mets, barely within striking distance anyway, promptly lost three straight games to Atlanta and fell out of the playoff chase, meaning the trades provided not one extra hour of contention.
And what has occurred subsequently has made the Mets look like rookie fantasy league owners. Zambrano walked off the mound with a bad elbow that had been bothering him before the trade. The prospect for whom he was traded, Scott Kazmir, quickly impressed the Devil Rays, bounced from Double-A to the majors and pitched five scoreless innings in his first start. (Meanwhile, Jose Reyes got hurt and shortstop Kazuo Matsui was told to prepare for a switch to second base -- confirmation that the Mets blew a full season of position development with both players.)
And then here's his naive conclusion:
Then Benson mused this week to the New York Post about the possibility of testing free agency. Earth to Mets: Pay the man. Overpay him. Give him what he wants. If Benson departs and signs elsewhere -- like Atlanta -- the public relations fallout will cost the team much more than it would to keep him.
He cites three of the most one-sided deals in history in F. Robinson, Ruth and Bagwell. I don't know how these deals will pan out for either team, and neither does Olney -- it's all speculative and I suspect he hasn't seen a lot of Zambrano or the prospects the Mets gave up.
But the conclusion, that it doesn't matter if Benson is a keeper or not, while at the same time that it's critical they sign him to a deal greater than one year for a healthy per annum to save face is simply the worst management advice you can give.
ALL METS ARE OFF?
If you are getting paid to work for someone, or if you are volunteering because you care about the cause or if you are volunteering build a reputation, never, ever value public relations fallout more than your employer's organizational/financial well-being. Never.
If it's merely your own money, if you're working for yourself, feel free to, but why would you want to reinforce a decision you considered wrong?
The Mets acquired Benson for two reasons: 1) they thought they had an opportunity to edge into the playoffs if he worked out, and 2) they thought he could be a good long-term addition. As an about-to-be-free-agent, they traded for him to get a pilot project -- a chance to see him in action in their setting, in their society, in their organization, their challenging fans and media environment, to see if he'd be a good fit. Benson's a slightly better than average pitcher this year. In his short career, he's paired a couple of good (not great) seasons with a couple of bad (not terrible) ones. It was a casual experiment, an effort to improve that appears not to have helped them this season. In his six Mets starts, he has one statistically fine performance, two medium ones and three ugly ones. If you were going to evaluate him on his performance so far as a Met, you'd probably say he wasn't worth going all-out to retain. They didn't take a giant risk in getting him, and it wouldn't be like letting Randy Johnson go without an offer if they decide not to keep him.
If they think he can contribute in the future, then it makes sense to offer him a market-rate (perhaps somewhat less because he hasn't had a hot hand for them in August; or perhaps somewhat better because he's a more known quantity and quality, reducing their risk a little) deal.
I don't think the Mets front-office is amateur enough to try to keep Benson if they think he's not worth the money. On the other hand, they have a leading pitching coach in Rick Peterson, and if Peterson believes he can make Benson effective, they may opt for a market-rate deal.
If it doesn't make sense, they should ignore Mr. Olney's management advice. Completely. Never compound a decision that didn't work out with an effort to spin it to look good. Never lash your employer to a mistake because a casual experiment didn't work out.
Thursday, August 26, 2004
As discussed in the first two entries (here and here) in this series, employee-centered management is a way to increase organizational effectiveness, especially so when the talent is the product. Baseball is the beacon for this kind of management in part because baseball has had a 20-year head start on other endeavors, but also because it is so open, making its experiments, both successes and failures, public lessons.
The baseball field manager who seems to understand the employee-centered model best is the Cubs' Dusty Baker. He is both an active tactician (while it's popular among sabermetrically-inclined fans to diss Baker's decisions, others, Leonard Koppett most notably, think he's very skilled both at using "The Book" and varying off of it) and a real "players' manager". As a players' manager, he puts them, their development, their interests, their careers at the forefront.
Employee-centered management is, in execution, more complex than just employee-centered or not so. There are other twists that go along with it that can give the the basic approach a lot of different textures. These twists require a manager's attention because the employee-centered approach, while universal in baseball and another
DYNAMIC TENSION: EXPLOSIVE LIKE AN ENGINE OR LIKE A FAULTY GRENADE
One of the twists on player-centered management is:
- Inbred team-building (Us vs. Them) <-----> Expansive team-building.
That is, the application of Us vs. Them inspiration to make the team/group be more competitive against outsiders while being more cohesive and mutually supportive within the team. Campaigning like this with a group can increase cohesion and competitiveness, and it naturally is a sensible approach to support the employee-centered idea that the team members are especially valuable.
It can backfire, though, when the manager drifts into what I call binary thinking.
Binary thinking, a very common management failure in lots of areas, presumes that things are either all one way or all the opposite. Big organizations fall into binary patterns because managing them is so complex that to simplify the task, they usually bind themselves to simplistic rules. Hiring freezes. Zero-based budgeting. Hiring only MBAs. No free pizza at company meetings. Like a manager who always calls for the bunt with a runner on first and no-one out, or the manager who never calls for it, it guarantees less success than the environment is offering and, over time, guarantees underperformance. The failure to understand and act upon the reaility that every situation has its own aspects that have to be judged and reacted to is a landmark weakness of contemporary management.
So a manager who believes that more Us vs. Them inspiration is better than none and that therefore you can't have too much of it (binary thinking) is lighting a fuse. There are all kinds of human systems that show this.I won't rattle on about them, but without a healthy perspective, little sub-societies that achieve through fueling extreme Us vs. Them passions produce situations where the team gains and the organization loses.
If the manager is inflating her players by deflating others (like a zero-sum games), the team loses its flexibility, it's ability to deal constructively with other groups in its own organization, its ability to listen and learn from others.
I don't think Baker's leads his Cubs like this, but this kind of binary extreme Us vs. Them can generate incidents like the report of Moises Alou going after the team's media entourage for not being rah-rah enough. It can create in the players a view that the team's greatness should go unquestioned, that there are two (binary) choices: You're either with the Soldiers of The One True God (in this case, the Cubs) or The Great Satan (in this case, everyone else, or perhaps just the Cardinals). If you think I'm exaggerating, you haven't worked in a serious range of organizations. (And yes, many of the most irritating and undeserving and poorly-socialized twits in the world work in sports media, but they are part of the greater endeavor, the pipeline of info and unsubstantiated speculation that juices attention to the team and sales of vital memorabilia like Cuno Barragan game-worn sweat bands, ad philium)
How does this happen?
It happens because a manager needs to inspire the team and uses his own internal neurosis to both build loyalty to himself while creating a fear/anger about the outside. If the manager is "smart" about it, this duality drives the team members to his cause (even if its just an invented one), leading them to try harder. He can even play some brinksmanship games with paranoid overtones (They're trying to get us/me, and we need to make this happen so we don't get toasted). And it does work to varying degrees, depending on the personalities of the people on the team, but a little seems to always work to some measurable degree.
In some cases where I've seen this approach, the manager had come from an abusive family where the dominant parent was emotionally- or even physically dangerous. The kids band together to protect each other, sometimes with the tacit help of the other parent. This isn't always the origin, though.
A little of this approach yields some extra results, but at some point, doing more of it doesn't deliver more value. If you have success with this as a manager, and want to play with it, start including other, adjacent workgroups, into the definition of "Us" Build alliances with other groups that depend on your work and you theirs and talk them up to your team. See if you can talk up your team to them.
But watch how far you take it. Don't erode the ability of your players to see their own weaknesses or erode their willingness to learn from others. Be prepared to put on the brakes at some point and let your staff know the boundaries of the battle. And don't make a common mistake and try to apply the Us vs. Them approach in a non-employee centered setting -- the message becomes "you're not special and they're all out to get us" -- trust me on this one, it's not a winner.
It's a really fine thing that Baker has the Cubs thinking of themselves as a unified team. It's potentially bad if they lose their sense of perspective (like they did in last year's NLCS game 7) and start imagining the fans are against them or the umps are against them or that somebody stole their strawberries.
Monday, August 23, 2004
In the previous entry, I kicked off this multi-part discussion of Dusty Baker's 2004 Chicago Cubs, an insightful reader's concerns and questions, and asserted that employee-centered management is, in execution, more complex than just employee-centered or not so. There are other twists that go along with it that can give the the basic approach a lot of different textures. These twists require a manager's attention because the employee-centered approach, while universal in baseball and another handful of cutting-edge endeavors, is one most employees haven't experienced much.
In this post, I'll discuss one of those variables and the reader's question about the Cubs that relates to it.
THE PATERNALISTIC / MATERNALISTIC
<-----> EGALITARIAN SCALE
THE RESULTS-FOCUSED <-----> HARMONY-FOCUSED SCALE
There are a broad range of employee-centered management approaches and one of the things that differentiates them is how egalitarian or parental each is.
A parental model creates an environment that is nurturing but prescribed. The rules are designed to benefit all, but rules there are and they are meant to be followed for the good of the employee, the department and the organization. The egalitarian model, in contrast, empowers employees to varying degrees. At the extreme egalitarian end of the scale, employees are empowered to do anything not explicitly prohibited.
Very few employee-centered organizations are at either absolute extreme. Most mix styles on this scale based on individual aspects of work.
For example, John "Little Napoleon" McGraw was a maniacal control freak during his tenure as Giants manager/owner (1903-32), dictating not just the normal baseball paternalistic details such as beddy-bye time, but down to what food ballplayers would eat. His pre-game drills were brutal, and he supervised personally a couple of chosen victim/players every day. But he left many in-game decisions to his players, breaking the mode for the era. So individuals were trained to judge when to call for moves we consider the manager's call today, such as the steal or the bunt. In contrast, McGraw's contemporary Connie Mack, reversed McGraw's pattern. Mack liked to hire responsible individuals and give them (relative) personal freedom. But Mack dictated every in-game tactic, down to positioning fielders for specific hitters.
As reader Phong Hyunh said:
I have huge issues with the way he seems to give a "free-er" license to his players than the typical manager.
For instance, how can you not reprimand Carlos Zambrano (and Latroy Hawkins and Kerry Wood, for that matter) for his juvenile, bush league antics on the mound. And the recent story that Moises Alou publicly criticized the team's TV announcers for being too critical of the team, to the point that some on the team didn't want Steve Stone and Chip Caray to travel with them on charter flights. It seems that the team has drifted perilously towards being a bunch of crybabies.
The mound antics are public, open, and we know what those pitchers do in games. We don't know what the Alou comments really were or whether the request to have Stone and Caray separated from the team was stated or in what terms, but these kinds of things do happen in baseball and outside of it, so for the purpose of the discussion let's assume the stories we've read are true.
When you're running a group or entire organization, the benefits of employee-centered management are numerous and mostly enduring. When healthy people who work for you know you consider their interests in your decision-making, they are more enthused/productive, and more likely to cut you slack when you ask them to do something they don't want to do or think is not the best way to do something. Not all employees are suited to egalitarian systems. My own experience with maternalistic organizations like the U.S. Army indicates to me that they actually act as magnets over time, drawing and keeping a disproportionate number of people who need to be parented and repelling eventually, those who need more autonomy.
As a young manager, I quickly saw, enacted and reaped the benefits of employee-centered approaches. I shallowly assumed that employee-centered mandated Egalitarian implementation. And because I was (and still am) strongly biased in favor of hiring independent, self-driven women and men, I had a collection of headstrong people who weren't given many restrictions. I was very focused on Results over Harmony (a later entry in this series will cover this scale). I saw every rule as overhead, drawing attention away from getting work done.
My groups consistently over-performed, but because I didn't impose a lot of rules as long as they were crushing quality and quantity targets, they probably caused a lot of distress not only to slacker or naturally mediocre groups we dealt with (who cares?) but also to diligent groups who worked with us that were more "by the book" or concerned with Harmony.
When we were running environmental consulting projects for the U.S.E.P.A., I added to our team a Renaissance Fellow, architect, planner, designer, college linebacker, perfectionist. He was a volcanic talent, hyper-brilliant, and wholly determined to succeed - and I had always believed that if you had talent and determination, you had to be a winner. The last two facets (perfectionism, linebacker) combined to make him a very difficult guy to work with, because, as it turned out, on a job where "good enough to work" was sometimes good enough, he wanted every deliverable to be of Nobel Prize-winning caliber regardless of how long it took. He blitzed on every play, which is why I called him "Blitz". If the Bush Junior administration had had Blitz running NASA in 2003, the space shuttle would have landed safely. But this project was not about space missions, and he made everyone's life miserable. For example, he stuck his nose into other employees' work looking for flaws and then reporting them, and he believed he had this right because (like a linebacker stunting) there weren't a lot of rules outside of the usual work regulations, and I hadn't imposed specific rules that said he couldn't.
Like a right-handed hitter who can tattoo left-handed pitchers but was weak against righties, he had clear strengths and weaknesses. I was able localize his assignments mostly to spots where his proclivities advanced the group's effectiveness. But my basic setting of allowing talented people to do what they like as long as they produced, very effective in the grand total, was dysfunctional here.
BACK TO BASEBALL
I didn't have the alternative of imposing rules just on him and not others -- well, I did, of course, but varying rules by player is almost certain death to team coherence. You have to make small exceptions for people with disabilites or in cases where someone has a sick child or spouse -- that's accepted, but you cannot give exemptions to stars just because they are stars. The Boston Red Sox' two sets of rules, one for their franchise player Carl Yastrzemski, and one for the rest of the team, was a festering sore that undermined team spirit in small but persistent ways.
Did it cost the Sox a win or two a year? No way to measure it, but in organizations I've consulted to that practiced this behavior, changing it to a uniform set of rules has always improved group performance, usually by getting a 15-25% increase from the 20-35% of the fellow employees who really care.
The Cubs' Moises Alou feeling like he could attack the team's announcers for not being booster-y enough is a parallel example. Maybe Alou was right that it undermined the team's effort, but this is exactly the kind of mission one goes through channels to deal with. Like Blitz, it appears Alou not having a sense of responsibility to the organization as a whole gives an impression to an outside observer that the organization is unraveling, and worse, unraveling over trivia.
If this happened, Baker needs to make clear to Alou that harnessing the announcers is not his job, and that he should focus on his very important jobs -- batting in the middle of a lineup of a team trying to get into the playoffs and playing left field with focus (Alou's defense appears to be an issue -- the Bartman foul ball notwithstanding. For all major league starting left fielders, he has average zone factor, dead-last range factor --- which can be an artifact of many things out of his control -- and the lowest fielding average among starting major league left fielders -- also not a concrete stat, but if the stat says he's the worst, he's very likely not better than average. Note though that official scorers have a strong effect on fielding average, and if Alou has ticked off his home field one, Alou may be getting no benefit of the doubt in half his games. And you'd have to think Alou, with his alleged criticism of the t.v. talking heads, is capable of ticking off his co-workers.)
It looks like Baker has few rules, and strong tendency to stress results over harmony. Not a bad model...during his eleven year tenure, he's has had much success, but would a few more behavior rules help?
Freedom permits creativity, juices inspiration, pushes productivity and egalitarian tones in employee-centered environments tend to create rate-busting effectiveness. Maternalistic / Paternalistic tones in employee-centered environments rein these in some, but the scale isn't binary -- a level of understanding that some rules, especially dealing with issues outside the immediate getting-work-done, are a necessary piece of overhead and that everyone will need to be attentive to them. Even just a few rules can focus people on the idea that rules exist and they need to be attended to.
In the next entry, I'll talk about the third scale, and this one is the trickiest, because when not properly handled, it can turn an employee-centered group into a time bomb as scary as an August José Mesa relief appearance. Scarier than Count Floyd's 3-D showing of Dr Tongue's Evil House of Wax.
Saturday, August 21, 2004
With very few exceptions, successful modern organizations understand that in non-commodity endeavors, the talent is the product. And if the organization doesn't already understand that, its success is likely on the endangered list..
Baseball is a wonderful example of an endeavor where this is crystal-clear. If you could wave a magic Louisville Slugger and remake the game, keeping the uniforms and stadia and announcers and concessions the same but removing the Major Leaguers and replacing them with skilled Rec league players, game attendance (and radio listenership and t.v. viewership) would plummet to perhaps 25% of what it is now. The talent is the product and baseball's openness makes the organizational & management effects easier to decode and track.
The baseball field manager who seems to understand this model best is the Cubs' Dusty Baker. He is both an active tactician (while it's popular among sabermetrically-inclined fans to diss Baker's decisions, others, Leonard Koppett most notably, think he's very skilled both at using "The Book" and varying off of it) and a real "players' manager". As a players' manager, he puts them, their development, their interests, their careers at the forefront.
I recently got a long, intelligent message from Cub fan Phong Huynh noting this attribute as a positive. He also noted challenges that come as a result. The abridged message follows:
As a lifelong, true blue Cubs fan, I am excited about what's going on w/ my team and their overall competitiveness. However, I want to ask you about Dusty Baker's managerial style.
I give him much credit for infusing a sense of optimism that was so badly needed for such a moribund franchise. However, I have huge issues with the way he seems to give a "free-er" license to his players than the typical manager.
For instance, how can you not reprimand Carlos Zambrano (and Latroy Hawkins and Kerry Wood, for that matter) for his juvenile, bush league antics on the mound. And the recent story that Moises Alou publicly criticized the team's TV announcers for being too critical of the team, to the point that some on the team didn't want Steve Stone and Chip Caray to travel with them on charter flights. It seems that the team has drifted perilously towards being a bunch of crybabies.
As a manager, that's not an attitude I'd want my team to have or be perceived as such. It looks especially troubling compared to their archenemy, the Cards who seem to get the job done (fantastically at that) w/o griping. What's your take on this?
MY SHORT TAKE
In concept, you can create a single scale of how player/employee-centered a manager is in the way he or she makes and modifies decisions. At its simplest, I believe Baker's player-centered approach is the correct one for any organization where the talent is the product.
It is not in execution, however, a simple linear scale that ranges from very player-centered to not player centered. But there is no single pattern for employee-centered management. In reality, there are several specific manager approaches you have to take into consideration. The most important are:
- Paternalistic/Maternalistic <-----> Egalitarian
- Inbred team-building (Us vs. Them) <-----> Expansive team-building
- Results-focused <-----> Harmony-focused
I don't know if we can know all the facts behind the stories Huynh passed on -- baseball reporters get things wrong sometimes though either a desire to get the story into print/broadcast first or because they misunderstood something. And sometimes they distort or even fabricate a story for various business or personal reasons. But the issues Huynh talks about are typical of some of the challenges I have seen both as a consultant and in my own employee-centered management.
In the next few posts, I'm going to go over the aspects of people-management I bulleted above and use Dusty Baker's approach as described by Phong Huynh as an example to illustrate them.
Wednesday, August 18, 2004
Thanks to Baseball Think Factory's news links page, I saw Baseball Prospectus' Steven Goldman's latest column was about the Yankee equivalent of whatever doesn't make you stronger kills you. ¿The Yankees? The organization you'd never let loose at a church rummage sale because they'd just pull up the Mercedes 16-wheeler, open the cargo door & buy everything including the lease-buyback rights to baptismal, all without negotiating?
EVEN THE YANKEES
Yes, those guys. In Goldman's view, they have mismanaged and ignored their bench, and it does affect their chances of winning in a short series. I agree, and there's a lesson for every organization in a competitive environment, an arena where anything less that 1st is the equivalent of coming in last.
The bigger knock is on the organization's thinking, and it has been true for years. The Yankees have so much dough, so much prestige invested in their front-line players that they seem to give little thought to their reserves. Specifically, they don't devote a lot of thought to answering the question, "Why is this guy here?"
Players are sometimes on the Yankees not due to merit, but because an overemphasis is placed on having bench players who accept their lot as reserves. At one time, it was the team's goal to stock its bench with players overqualified to be replacements. It made trouble for the manager, because the players sitting next to him were almost always angry with him, but it also meant that when they were finally called upon to step in for an injured player they would do their best to excel. Today's Yankees don't have that, in part because of the death of the minor league system, in part because this may be the price you pay for Joe Torre's famously harmonious clubhouse.
A common response to this sort of argument is, "Who cares who the backups are? The Yankees are up by 62 games and these guys have limited chances to affect things. The Yankees are good enough."
This is dangerously complacent thinking. It's based on the assumption that there will never be a day when the roster will not be called upon to give its last full measure of devotion in order to win a game. Putting aside that, like the Boy Scouts, a ball club should "always be prepared" in their quest to give those that bought tickets or tuned into the game broadcast what they're paying for, a sincere winning effort, the same set of circumstances can roll up in a World Series game or any other kind of must-win contest.
The Yankees paid for their inattention to reserves in the 2001 World Series. In Game 2, the Yankees were down 4-0 against Randy Johnson in the top of the eighth. Shane Spencer and Alfonso Soriano opened the inning with consecutive singles. After Scott Brosius, who had spent the second half of the season living out Phil Ochs' "Rehearsals for Retirement" and should himself have been pinch-hit for, was called out on strikes, the pitcher was due to bat. Needing a three-run homer worse than Phil Rizzuto needs a cannoli, Torre went to his bench and called upon … Luis Sojo. Sojo hit into a double play. Rally dead, game dead, series well on its way to being dead.
Contrast that with Game 1 of the 1954 World Series, when the Giants beat the Indians on Dusty Rhodes' bottom of the 10th, three-run pinch homer, or Game 3 in 1949, when Johnny Mize's pinch-hit single beat the Dodgers.
ANY team can suffer for lack of attention to even the most apparently-minor competencies, if the competitive environment dictates whatever doesn't make you stronger kills you. Even the Yankees. It's not about the most resources in that situation, it's about the finest balance and a manic hyperfocus on perfection normally exhibited only by a French cheese inspector.
It's wearing and hard to sustain an organizational society where everything has to be as close to the 99th percentile in every way every day. But the message Goldman is giving managers through his Yankee analysis is precisely parallel to the Cardinal lesson from the last entry.
In a binary win/lose environment, whatever doesn't make you stronger kills you. You have to attend to every weakness, limiting factor, gating factor. Unforgiving environments don't forgive. That weakness will show up at a critical juncture sooner or later and you'll end up needing to pull out a victory armed with nothing more likely to succeed than Luis Sojo.
You might succeed with that move, but why limit yourself when a little attention could have built a better-staffed group where every hire was thought-out and complementary?
Monday, August 16, 2004
doesn't make you stronger kills you
In baseball, as in most endeavors, "winning" doesn't share the same definition for all organizations.
Let's look at some individual teams' specific definitions for the 2004 season. For the Milwaukee Brewers, starting a sustainable upward trajectory and examining their young players was the "win" goal. For the Tampa Bay Devil Rays or Pittsburgh Pirates, just playing .500 ball this year early in their development cycle, is a moral victory. Ownership and fans will view it that way. For the Baltimore Orioles & Houston Astros, anything less than divisional contention was going to be viewed as a loss. For the Philadelphia Phillies, making the playoffs was the "win".
For the Cardinals, at least at the All-Star break, it has been getting to the World Series and possibly even winning it. I suspect that for the front office and players, that's the "win" and that anything less is just another form of loss. Very binary.
That binary win/loss set-up, where an organization can only win by being first and in no other case, isn't all that common outside sports, but it does exist. If you opened a new retail or manufacturing or service business, say a tavern or a metal fabrication shop or a dental practice, and in your market area you had, like a baseball team, 29 competitors, you probably wouldn't have to be the largest in after-tax margin or customer satisfaction or gross volume to "win". Sure, there are some entrepreneurs who, like George Steinbrenner, have the personality that drives them to always be #1. And there are some others who believe that striving for #1 status in a chosen metric is a necessary component for continued success. In most cases, I tend to agree with them, though not with their usual chosen measure of success, which too frequently is gross sales or market share...both very Soviet-style focused on Bolshoi-bigness as opposed to qualitative. In tomorrow's entry, I'll give you a small baseball test you can give to people to see if they tend more towards Soviet-style or more entrepreneurial thinking.
The Cardinals have been having an extraordinarily good season. It's certainly outstripped the pundit consensus for them. I suspect it's even exceeded the front office's optimistic projection. At the two-thirds point of the season weekend-before-last, this was their position in the League:
|2004 National League Standings|
|E A S T -||W||L||PCT||GB||RS||RA||STRK||L10|
|NY Mets||52||58||.473||11||492||487||L 3||4-6|
|St. Louis||72||38||.655||-||589||449||W 5||8-2|
|W E S T -||W||L||PCT||GB||RS||RA||STRK||L10|
|L. A.||65||45||.591||-||506||442||L 1||7-3|
|San Diego||59||52||.532||6.5||493||460||L 2||3-7|
|San Fran.||60||53||.531||6.5||567||564||W 1||4-6|
The Cards were not just in a controlling position over their Central division, they were the best team in the entire League by 7 games.
If you look at the metrics, team statistics, you can see why. Offensively, as of today, they dominate the 16-team league in the big stats, third to the environmentally exceptional Colorado Rockies and the Giants in on-base percentage, and second in the league (to those environmentall-exceptional Rox) in slugging percentage. They do well in the small metrics, too. They are fourth in stolen bases as measured by Net Steals (steals minus 2x caught stealing). Fourth in fewest double-plays grounded into.
Therefore they are, unsurprisingly, second (to you know who) in the ultimate measure of offense, runs scored. Add to that they are 3rd best in fewest runs allowed. Statistically, they are the best team-as-a-whole in either League.
They did all this without any major deals during the season, and that's understandable to those who buy into the conventional Confucian dogma of "if it is not broken, do not attempt to repair it".
WHATEVER DOESN'T MAKE YOU STRONGER KILLS YOU
But in that binary situation, where being #1 is the only alternative to being a total loser, Confucian stillness can be fatal. Teams that are playing this well can get too relaxed (2001 Mariners) or smug (1995 Angels). Whether it's chemistry or the individual consciousness of key individuals or physical wear-and-tear, few teams embody the start-to-end excellence of the 1998 Yankees who had the best season record and rolled through the playoffs and World Series.
The G.M. of the Cards, Walt Jocketty, knows this, so he fixed what wasn't broken. Given that he has a team that already has two of the most all-out, pedal-to-the-metal demonic competitors (what I call "hockey players") with both talent & baseball savvy in Scott Rolen and Jim Edmonds, he went out and got the aging poster boy for that model: Larry Walker. He got Walker and some cash to pay for his high-relative-to-current-market salary from the aforementioned Rockies, a team going nowhere, for an interesting minor-leaguer & a couple of players to be later specified. It helped the Rockies offload salary and get more playing time for a surprisingly good young player, Matt Holliday, who may or may not amount to something longer term.
It gave a Cards another hockey player but one with a lot of hunger for winning. Walker has played on some good teams, but only once, nine years ago, did he get to a playoff series, and then, only a single series. I'm a little biased -- Walker's one of my absolute favorite players to watch, but I think Jocketty got the single best non-pitcher he could have for this particular situation: trying to alter the recipe of an already-successful team while making it more competitive for the next few months. Moreover, because the Cards are already a healthy organization, the teams were able to convince Walker to waive his no-trade clause, required to make this deal and something Walker allegedly has invoked in the past when the Rockies previously tried to trade him. So the Cards know he really does want to play for them.
By changing the recipe, the front office has been able to achieve a few things:
- The move adds offensive quality to the line-up.
- It puts one of the savviest and accurate-armed outfielders in the Cardinals right field position (where arm is more valuable), moving a slightly-better-than-average Reggie Sanders over to left.
- It juggles the batting lineup, forcing the hitters and fielders to re-focus on new situations (for example, how fast is the guy in front of me on the basepaths? where should I stand in the cut-off for that guy, given his pattern and arm?).
- It provides the team as a whole with a new social/communal task of integrating a new contributor.
Jocketty has made some measurable improvements, but he's also given this winning machine other reasons to pay attention, stay sharp, be a team.
It doesn't guarantee they'll win in the playoffs -- nothing the front office does at this juncture can do that, only the players can. But it does provide a number of small edges, it does provide more supports for winning this binary game the Cardinals are playing.
There are two basic lessons to take from Jocketty and the Cardinals' acquisition of Walker.
First, even very successful teams need improvements and tuning because in a competitive situation, whatever doesn't make you stronger can be the source of your demise. (This isn't really true in a non-competitive situation, if you're a monopoly or, like the U.S. armed services or Microsoft, because of your massive resource advantage, you can essentially put out of commission any competitor you choose, excellence or not. Very few organizations, though, have either of those two luxuries). Whether it's smugness or a lack of a day-to-day need to excel or simply a loss of sharp focused attention, competitive organizations need to shuffle the deck a little to stay fresh.
I've seen good workgroups sour slowly. It happens way too often. They don't need to be demolished, like a Godzilla attack from the original Sim City. They just need to stay challenged. A handful of common techiques include adding a new senior person (as the Cards did) who can bring additional prespective and expertise into the group's tool box. You can add a junior person to learn how to be successful or to acquire domain expertise (be sure to allow everyone a little extra time for this longer-term investment). You can expand the team's span of control, giving them new, related tasks to handle. In an organization that has teams that are struggling you can (I love this one) lend them out as internal or external consultants to struggling teams so the two teams can collaborate together on improvements (remember, you need to create some slack for this, and make sure you're letting the successful team get public credit before you try to use them as consultants).
Second, healthy organizations attract healthy contributors. That's a corollary of Angus' First Law of Organizational Development: Almost all human organizations are self-amplifying. Just as highly-politicized slacker organizations tend to get more and more that way, as do socipathic organizations and ones driven by bunco projects, healthy organizations have the ability to attract serious contributors.
If you're a healthy organization, use that to acquire the Larry Walkers who might be available. If you're not a healthy organization, it's time to start doing something about it.
Thursday, August 05, 2004
Wednesday, August 04, 2004
In most workplaces, public relations can yield more recognition than competence. And competence can be overlooked.
There are a couple of nifty baseball examples of successful managers who are generally under-appreciated. One of the most noteworthy examples wrote today about one of the other most noteworthy examples.
Larry Dierker, SABR member and former manager today wrote a column that while not the most elegant piece of writing, aimed to make a strong argument I've been meaning to get around to for a long time. His assertion: Bobby Cox, the skipper of the Atlanta Braves, is a heck of a manager. Before we go to the subject, Cox, let me point out Dierker's managerial record:Year League Team G W L WP Finish
1997 NL Cent Houston 162 84 78 .519 1
1998 NL Cent Houston 162 102 60 .630 1
1999 NL Cent Houston 162 97 65 .599 1
2000 NL Cent Houston 162 72 90 .444 4
2001 NL Cent Houston 162 93 69 .574 1
TOTAL 810 448 362 .553
Five seasons, four division titles, a .550 winning percentage, and ended his last season in 1st place. Dierker knows something about managing a baseball team.
In Dierker's piece about Cox, he argues the key point that always convinced me Cox, for his almost Lake Wobegon quality lack 'o charisma, knew what he was doing: he manages a team with fairly high turnover in personnel and overall style, and manages to either promote their winning, or, if you're cynical, just not get in the way. Either way, that's great management.
In the last 13 years, Atlanta has won its division 12 times. In strike-shortened 1994, no-one won, but Montreal finished the aborted season with the best record. Cox' teams have won in Atlanta-Fulton County Stadium, a high-powered offense enhancer, and in Turner Field, a pitcher's park. As General Manager John Schuerholz brought up developed talent, traded players he couldn't afford and replaced them with others he could, the team has changed complexion multiple times during the 13 year run. They went from the most incredibly fine first three starting pitchers to losing two of them to free agency and one to an injury. Schuerholz, like any great management talent, used the tools at hand to cobble together a rotation. The injured starter, John Smoltz, still pitches well, but couldn't go as many innings, so they made him their (now very successful) closer. (Dierker details many more moves in his article, if you're interested).
They never let themselves be constrained by their self-image. Many organizations would have seen themselves as a pitching anchored team, and struggled to get back to that. Not the Braves. With less pitching, they traded for more hitting, becoming primarily an offensive team last year. This year, after almost universal predictions that this would be the year they tanked, they are in the middle of a pennant race and at this moment have a small lead.
Dierker adds that he thinks Cox' demeanour is part of his success:
During all the years I have followed Bobby Cox's Braves, I never have seen them in turmoil. Sure, they have had their minor tiffs, but Bobby makes sure they stay minor. His players always seem to be prepared physically, and they always seem to strike that uneasy balance between being loose and relaxed and focused and determined. After managing so many stars for so many years, you would think there would be at least one season in which the team would implode. It hasn't happened.
It's true Cox has the advantage of a team with a great front office that views the task without prejudices that would constrain lesser talents. And that means Cox regularly has better talent available to him than the average field manager has. But he, like Schuerholz , makes the most of what he has, shifting tactics to match ballparks and personnel to maximize what he has.BEYOND BASEBALL
That's the most you can expect from any manager: that she or he will optimize the resources at hand, and when faced with change, change the way they do things to match those changed resources.
Moreover, he has the kind of attitude and calm can-do attitude that enlists his players, and this is vital outside of baseball, too. Many shops that militantly collect serious talent tend to decay into internal-competition modes, zero-sum games where the competitive compete to be the best, not just by excelling themselves, but by trying to undermine their peers to make themselves look better in comparison. Cox' Braves collect serious talent and seem to be able to pull together for mutual advancement.
Will the Braves win again this year? I'm not much of a prognosticator. I do know they are competitive this year when everyone thought they wouldn't be. Again. Flexibility and teamwork are the hallmarks of this organization.
I agree with Dierker -- you can't succeed over-and-over like that without good management, in baseball or beyond. And that requires embracing change and making sure you give people more incentive to succeed than just making them fear for the consequences of failure. That's how you grind out excellence year-after-year.
Monday, August 02, 2004
As a consultant, when I'm getting to know a manager, one of the first things I try to do is gauge where she or he is on the Opportunity <-->Risk Avoidance scale. Faced with a choice or crisis or sudden change of environment, the risk-avoider will try to minimize damage and try to re-establish the last satisfactory status quo. Faced with the same, the opportunity seeker will look to find what can be exploited from the situation.
I don't ask direct questions about it, mostly just derive it from other things we talk about or that I observe, and I usually have a pretty precise idea after a half-day of interacting with a group. The reality in big organizations is, there's not much of of a spectrum. The bigger the organization, the more established it is, the more likely it believes it has something to lose, the more risk-avoidant it becomes. The vast majority of managers in big organizations (business, government, etc.) will take a fairly extreme risk-avoidance position. Anyone who is halfway towards the middle from there will be labeled a "Bolshevik" (no kidding; at Boeing, this was the term used for non-extreme-risk-avoiders, albeit one used with a certain element of affection towards the individual), and their career trajectory was limited by their choice. If they never had a decision go "wrong", they could progress, but the first time it didn't turn out well, that was a Scarlet Letter woven upon their sternum. With the same decision gone "wrong", the risk avoider would not suffer so much. Classic CYA gravitational field.
There's an interesting factor at work though, a Commons. Because while any individual's net benefit in a big organization is usually higher avoiding risk than pursuing opportunity, the more risk-avoiders there are running the show, the higher the reward for the individual (or organization) that diverges and takes an opportunity-seeking path. In any line of business or governance or on the battlefield, the winners of the big victories are the opportunity-seekers.
Because being a mild opportunity seeker doesn't have a lot of rewards, there aren't many of them in circulation; the ones who pursue that naturally tend to either minimize their internal tendency or simply take the reins in their teeth and run full-tilt with it. The result is a "J" curve, somewhat like a bell curve turned upside down, and with one extreme bigger than the other.
The rookie General Manager of the Los Angeles Dodgers is Paul DePodesta, the actual protagonist of Michael Lewis' book Moneyball. DePodesta is an extreme opportunity seeker (if you read the book, you know this already).
As of last week, the Dodgers were in first place in their division by 3-1/2 games, cruising along as the 2nd winningest team in the National League. The risk-avoider decision-maker does as little as possible in that situation, nurturing the status quo. "If it is not in disrepair, do not call the repair person," as Louis XVI was reported to have said a week before his execution.
DePodesta, opportunity-seeker that he is, pulled off a couple of deals on his way to a third, bigger one, and now the Pastime's punditocracy has got its panties all a-twisted.
The Dodgers got a horse of pitcher in Brad Penny, a 50th-percentile 1st baseman best-platooned in Hee Seop Choi, an archetypal back-up catcher in Brent Mayne, and a slugging, wall-banging center fielder with power and good baserunning in Steve Finley, as well as a prospect DePodesta likes. They gave up their primary catcher, Paul Lo Duca, who had a great season 3 years ago, a below average hitting platoon OF with some power Juan "Re-" Encarnation, a below-average hitting and slightly below average fielding OF who's an excellent base-stealer Dave Roberts and the super-setup man, Guillermo Mota, as well as a choice prospect.
This set of deals was a table-setter in an effort to get the difference-maker many competitive teams craved: Randy Johnson. In the end, there wasn't time/mojo to close a Johnson deal, so DePodesta is holding some pieces that were not part of his plan at the beginning of last week.
GIRLY-MEN GONE WILD ($29.95 + shipping and handling)
The Pundits (exception: Peter Gammons) seem to be unified in the opinion that the Dodger G.M. screwed the pooch. Here's Ken Rosenthal (The Losers = Dodgers). Here's Jayson Stark (Biggest Losers #1 = Dodgers). And here's Buster Olney ("They have messed with success"). I haven't even looked at the L.A. media.
I believe the punditocracy is wrong; there will be no way to tell until the prospects careers are resolved. But if the Dodgers don't survive the first round of playoffs or falter and don't get there at all, DePodesta will be flailed as all opporuntity-seekers are in risk-aversion dominated environments.
The carousel of deals didn't end the way he had hoped it would, DePodesta didn't get the brass ring, but he team is not clearly weaker than when it started. He doesn't have a starting catcher right now, he has a pair of back-ups he can platoon.
This is not, by ittself, a critical problem for a playoff, or even championship team. The 1927 Yankees, some believe to be the greatest team ever, went to the World Series with three career back-up catchers, plus at 3rd base they had a no-hit-no-field journeyman who spent most of his best years as a utility-man. Of course, there's no Ruth, and no Gehrig on the 2004 Dodgers, but an ugly weakness at one or even two positions doesn't doom a team.
DePodesta can still deal for a catcher, though his rivals can make life more difficult for him in August than they could in July, by aborting his attempts to get waiver clearance. He has a better offensive and defensive outfield, a good hitting 1st baseman, and a solid young pitcher for this and future years (I strongly suspect Brad Penny will win more games over the rest of his career than Randy Johnson will).
The Dodgers total future value (discounting the prospect he yielded and the one he got) looks net positive. The National League West rivals made no deals that would make anyone's hair go instantly all Lyle Lovett, either. This is not likely to be a crisis, and probably not a set-back either; just a case where a team didn't close the deal it really wanted to make and now has a slightly different set of current strengths and weaknesses than it had previously, while having a slightly brighter future.
Understand, DePodesta has a bit of life experience to reinforce his willingness to take the risk he did, to "mess with success".
The counter-reformation rap against his old team, the Oakland As, and its G.M. Billy Beane, is that while those teams made the playoffs four years in a row, they didn't succeed in winning a playoff series. So beyond being an opportunity-seeker by nature, DePodesta is almost certainly determined to overcome that stigma, determined to win a playoff series or even the World Series as a way to silence critics. Perhaps this distorted his judgement some, increasing his willingness to pull the trigger on the first two deals without a guarantee of the third. But given his team gave up one player with World Series experience and got two back, given he has an extra starter now, given he has just about a net-balance on the deal in current terms, I suspect he saw his risk as low and his potential reward as high.
There is always a political cost to being an opportunity-seeker. Those who are determined not to be "tall poppies" probabalistically have longer careers and few accomplishments. Big organization politics tend to eat up opporunity-seekers sooner or later. Have many of that type succeeded in your organization?
But winning a World Series, as in any significant endeavor, isn't about playing it safe, even for the New York Yankees. Whatever doesn't make you stronger kills you. Standing pat is an option only in a static environment.
I believe DePodesta made the right gamble based on benefit/cost potentials. We won't know for a few years.
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