Management by Baseball

I've been getting mail asking for Ozzie Guillen management insights, and I'm working one some new material that requires combing through play-by-play logs...very exhaustive, but exhausting, research. In the meantime, I pulled this out of the archives for your edutainmentificationizing

Good management shouldn't have to involve office politics, but in most organizations, it does. In unhealthy organizations, a manager will spend more time actively planning and executing political ploys, as well as work shaped to support those political ploys, than she will work that's aimed at the organization's mission.

That's overhead. And specifically, that particular form of overhead is one of the key Diseconomies of Scale. The general (not universal) trend is the larger the organization, the larger the percentage of resources dedicated to internal political aims rather than the mission.

There's a certain kind of political weasel I particularly dislike, that just triggers a chemical reaction that probably is worse because I went to military school and spent more time than I should have in the Army: The Martinet. The know-it-all, perfectly-dressed, precision-worshipping, sharp-tongued hyper-critic. Someone like Buck Showalter.

Now I don't exactly dislike Showalter, nor do I think he's a poor manager. But if I was in his organization or an opposing manager, his drill-master act would get on my nerves. And if he was playing a zero-sum political game with me, I'd be tempted to really get into it with him -- when he came after me, I'd just want to go mano-a-mano with him.

There's a much much more effective way. One can't use the technique as a consultant, but it's a great one to use when the martinet is in the same or a collaborating organization. That's needling. Not overtly hostile. Sarcastic, ironic, sardonic, or some mix of the aforementioned flavors. The way Ozzie Guillen does it.

VENEZUELAN ACUPUNCTURE
Guillen is in his rookie year as a major league manager. He's pretty stressed as his Chicago White Sox, expected to be really competitive, have lost their two best offensive players (Frank Thomas & Magglio Ordoñez) to injuries, and at this point are playing .500 ball and have no rational shot at the wild card. And in a town like Chicago, he won't get much slack from the press or fans. Earlier this month, he took a verbal hammer to an ump who had a poor day with his calls, and paid a fine for the privilege. The fine may have awakened his more creative needling side.

According to the Daily Southdown (courtesy of Baseball Think Factory):

Guillen took exception to comments Showalter made after the Sox beat the Rangers 7-3 on Thursday night. Showalter's comments stemmed from an incident that occurred during the game.

Guillen noticed in the first inning of Thursday's game that Rangers roving pitching instructor John Wetteland was coaching first base. Steve Smith, the Rangers' regular third-base coach, was serving a suspension for arguing with an umpire in an Aug. 25 game, and Rangers first-base coach DeMarlo Hale moved over to coach third.

Guillen asked the umpires if Wetteland was allowed to coach first base, citing a rule that a replacement coach on the field has to be part of the big-league staff. When the umpires told Guillen that Texas had received permission to make the move, Guillen said he simply said "no problem" and left it at that.

Showalter didn't leave it at that during his postgame media session. "I guess he didn't know you could carry seven coaches in September or an extra coach in September," Showalter said. Showalter then said something about Sox general manager Kenny Williams needing to let Guillen know about that rule.

Guillen saw that as an unwarranted jab. So he chose to throw a haymaker Friday. "The comments he made, I think they were unprofessional, because I was doing my job," Guillen said. "The only reason I did it is because he would do the same if he was on my side. And I didn't make it a big deal because it was Mr. Wetteland coaching first base. If it was somebody else coaching first, I will make a big deal about it because that's the rules. I think you can call up people to be on your coaching staff, but you can't have them on the field.

"Even after the game, I forgot about it. Now all a sudden they come up with his comments and I think it's unprofessional. But when the 'best manager' in the history of baseball talks about you, that means you're on somebody's mind. And when you're beating the crap out of the best manager in baseball, and we beat the (bleep) out of them, it makes me feel a lot better.

[snip] Guillen continued. "To compete against the guy (Showalter) that invented baseball, and beat him, that's something you should feel good about as a rookie manager."

Guillen said the reason Showalter keeps one hand in his pocket when he makes a pitching change is "so he doesn't lose the key to baseball that he keeps there when he runs on the field."

The feud between the two skippers has been building for some time. Guillen claimed Showalter showed him some attitude when the Rangers and Sox met in a Cactus League game in spring training. When the Sox went to Texas for a two-game series in July, Showalter didn't like the fact that third-base coach Joey Cora made up a lineup card that included head shots of each of the Sox players, as well as their e-mail addresses, mocking Showalter's well-known obsession for details.

According to Guillen, someone who works for Showalter informed the Sox skipper that Showalter felt Guillen had no respect for the game because he was having too much fun.

"I could have made a big deal about it, but I was professional enough because I respect the guy that was coaching first base," Guillen said about Thursday's incident. "Wetteland did something in the big leagues. (Showalter) never even smelled a jock in the big leagues. He didn't even know how the clubhouse in the big leagues was when he got his first job. ... 'Mr. Baseball' never even got a hit in Triple-A. He was a backup catcher or a first baseman all his career. Now all of the sudden he's the best ever in baseball.

Guillen said he'd like to trade spring training facilities with the Kansas City Royals, who share their facility in Surprise, Ariz., with the Rangers. That way Guillen could torment the Texas skipper more often.

"When you talk about anybody in baseball you've got to be careful what you say," Guillen said, "because he made my general manager look like an idiot, like he doesn't know anything about the game. And he made me look like I'm just another one wearing a uniform.

"It's too bad I didn't have to go to the minor leagues to get this job like he did. I was coaching straight up in the big leagues. I was a big-league coach and I went straight to big-league manager. Ozzie Guillen had to do something to take those steps. I only played two, three years in the minor leagues and played 14 years with the same team.

"There are so many different things he might be jealous (of)," Guillen added. "I was a better player than him, I've got more money than him and I'm better looking than him."

On first reading, one might think he was being serious, but he made sure to make some jibes that were clearly over-the-top and impossible to take as anything but teasing. Martinets hate teasing, because they work so hard to put themselves in an unassailable position by playing a zero-sum game of "who's the most authoritative". Martinets equate seriousness with success, so when you undermine the seriousness of the mood, you undermine the entire foundation of their game. Rather than meet the zero-sum gamer head on in a beanball war, you change the game completely.

BEYOND BASEBALL
Here's how you apply the Guillen Venezuelan Acupuncture technique yourself. If you're in a public meeting both with peers and people to whom you report, you have natural allies, and the perfect audience to needle the martinet. Many other people will share your dislike of the martinet. Rather than flaming him or her, pay homage to the martinet's historically-significant greatness...while pointing out their limitations. Polite, but sardonic. Playful but cutting. Only one in five hundred of these types have the ability to use humor or respond it it gracefully. If he blows up or she storms out of the room, you've won. Or if he gets sullen, you've won.

Ozzie Guillen may never have been a good hitter...but he sure can deliver some timely hits.

Discussion here.

In competitive endeavors, managers who can't adapt to change or who see it as an unpleasant reality they have to make alterations to face are always going to be at a disadvantage when competing with those who see it as one of the aspects of their job about as challenging as having to decide what to do about running out of coffee in the corporate break room. In all competitive endeavors, change is a given, and baseball is the lens through which you can see what happens if you don't change, what kinds of adaptations work & which ones won't.

One of the top masters of change in any endeavor is the Atlanta Braves' GM, John Schuerholz. At the GMs' annual meetings this week, I got to join an informal press conversation he held and later got to chat a little with this most successful U.S. executive. Here's the Braves record since he came on as GM in 1991 (courtesy Baseball-Reference.Com).

I included 1990, the year before he started being in charge, to show how quickly his front-office team helped power improvement, in this case, 29 games worth.

Moreover, there's not a single National League team against which the Braves have a losing record during his tenure. Not a single one.

Atlanta Braves 1991 - 2005

TeamIDs Games Wins  Losses  Win%     RS     RA  homeW-L   roadW-L
ARI        59    36    23  0.610    288    230    16-12     20-11
CHC       133    81    52  0.609    625    515    43-25     38-27
CIN       154    96    58  0.623    827    640    48-26     48-32
COL       116    75    41  0.647    711    551    38-19     37-22
FLA       193   110    83  0.570    884    774    64-33     46-50 
HOU       145    90    55  0.621    663    523    39-31     51-24
LAD       146    84    62  0.575    606    491    46-29     38-33
MIL        55    37    18  0.673    282    194    17-10     20-8
NYM       215   130    85  0.605    985    853    71-34     59-51
PHI       215   122    93  0.567   1058    889    64-45     58-48
PIT       136    85    51  0.625    625    458    46-22     39-29
SDP       145    95    50  0.655    681    521    48-24     47-26
SFG       145    87    57  0.604    700    568    51-23     36-34
STL       139    84    55  0.604    617    521    47-24     37-31
MON-WSN   216   133    83  0.616   1032    838    67-43     66-40
Total    2363  1431   931  0.606  11341   9236   743-436   688-495 

That's excellence -- not just the consistency to have a winning record every year, not just the consistency to win the division every full year, but the consistency to have a winning record over every single rival over the long haul. Only one franchise has been able to attain a winning record against the Braves even in their own ball park (the Fish); the Braves have a winning road record against every team but one. How frelling incomparable is that? It's a remarkable achievement and a remarkable tribute to the front office team's ability to adapt to the changing environments, opponents' strategies.

It's no wonder at all that the GMs this year decided to name an award of their own after Schuerholz.

WHAT IS PAST IS PROLOGUE
Among his explanations and our short dialogues, it was never directed at why he was successful, but several success factors erupted from the conversation. Without suggesting these are the only reasons he's been such an extraordinary winner, I assert that his background set him up for success in several ways.

Success Factor #1 -- Schuerholz had a diverse set of experiences and jobs before he entered baseball
"I held a ton of different jobs," he said. He was an 8th grade school teacher, a counselor at a Boys Reformatory, he worked on the floor in steel mills and was a shoe salesman. He learned to adapt, deal with many different kinds of co-workers and bosses and customers/stakeholders, and work to changing rhythms.

Success Factor #2 -- Schuerholz gathered knowledge of methods in all his work
"I learned from every job I ever had," he said. Schuerholz did not say the following, I'm telling you what I believe right here: the kinds of jobs he did gave him tools he was able to apply.

A shoe salesman learns that every customer is going to take a different shoe, a different size. While the guidelines for customer satisfaction stay the same, the conditions for success change with every new customer. One size doesn't fit all, just as no single approach to winning baseball can succeed in 1991, 1995, 2001 and 2005. Changes in what constitutes optimal roster-building, changes in personnel, changes in ownership and finances never phased the Braves' winning ways.

An 8th grade school teacher learns that education is paramount but that the learners come in many kinds, with different foundations of knowledge and coachability, different personalities, different motivations, and day to day changes in how well every individual's hormonal chaos will permit her or him to focus & learn. And, as one reporter suggested to the GM, that experience equipped him perfectly to deal with John Rocker.

A steel mill hand learns to read the patterns in the equipment and the product, using all senses to acquire the knowledge of how fast to pull wire, what metal at the right color and smell and viscosity is ready for the next twist or pull or cooling. It's hard dangerous physical work, but there's a strong mental and sensory component, too, that requires intuition, observation and quick decisions. Pattern recognition and decisiveness are two of essentials of a baseball, or any, management job.

A counselor at a reform school needs to empathize without becoming emotionally involved, needs to coddle some days and be unyielding most others. Every individual changes, like an 8th grader, every day, but in much more unpredictable and potentially dangerous ways.

I can promise you that if you had to choose between an MBA without this kind of job experience, or the opposite, an aspiring manager who wants to be successful with dynamic competition is significantly better off with the background Schuerholz has.

Success Factor #3 -- Schuerholz is not a Methods Bigot
While "the" story of this year's GMs' meeting was how young and business school-y the new GMs were, and while the Bitgods railed about computers and stats and Clearasil, Schuerholz has perfect equanimity about it. He sees the young GMs' various approaches (the young GMs are not uniform in any way, except perhaps all having an appreciation for business-oriented analysis) as worthy competitors to his own front-office team's set of tools which are updating and adapting themselves every year. Of course, Schuerholz respects numerical analysis but he respects the different environment in which the young GMs cut their teeth and sees that it has advantages (and disadvantages) of its own: "There's a universe of information accessible over the Internet now. So any young person with an affinity for it can find about anything they need to do an analysis".

He realizes there are a number of ways to get to the finish line, in baseball and beyond. Any manager in any field needs to be flexible and respectful of alternative approaches -- if they're not, they're not going to able to (a) learn how their competitors' behaviors are shaped and therefore will be less able to counter or predict them, and (b) find the useful nuggets inside their competitors' approach, no matter how many or few there might be. Adapting to change requires adoption of new tools, methods and techniques in a never-ending march. It requires respecting, not dismissing, one's adversaries.

Success Factor #4 -- Schuerholz is not afraid of internal competition
From one of his early mentors, Harry Dalton, the Atlanta GM learned you should never be intimidated by ambitious or brilliant contributors who are your peers or on your staff. "He was never intimidated by talent. He was comforted by it," Schuerholz said.

In healthy organizations in all professions, that's the case. It's a pretty tiny minority of American corporations, government agencies and professional practices where that healthy setting has taken hold. It's close to zero in academic and non-profit organizations. Back-biting, zero-sum politicking, undermining "competitors" is the avocational blood sport that cripples large organizations.

Not the Braves. Schuerholz is more concerned with the organization's everyday success than he is about the possible threat from excellence internal contributors who might represent an opportunity for his employer to replace him. Excellence stands on its own terms and doesn't shrink from other excellence.

That's just as true outside baseball. In any endeavor, anyone who's gaming in ways that undermine the absolute maximum chance to win to further her own career cannot achieve extraordinary winning streaks the way Schuerholz and his front-office team have.

EXCELLENCE
Excellence is consistent achievement in varying environments, and the only way to reach Home Plate in the MBB Model. John Schuerholz has crossed home plate with a lot of key runs in his career, and there's nor shortage of lessons we can learn from his approach and the record it hammers out. It's a chain of accomplishment we should all aspire to.

In what appears to be the great New York Yankees tradition of buying everything in sight just to keep any other team from getting it, the team rounded out its coaching staff makeover yesterday by signing two pitching coaches.

Actually, it only appears that way. It's a block of hiring wisdom most organizations can take advantage of: Complementary staffing.

GATOR GOES GOTHAM
The Yankees hired Ron "Louisiana Lightning" Guidry to be the pitching coach to take the Mantle from the behated and beloved Mel Stottlemyre Senior. Guidry hasn't been a major league team's pitching coach before, but there's a lot to be said for the hire. First, he's a franchise hero, so after a season that could a disappointment only to Yankee fans and eight year olds and team owner George Steinbrenner (95-67, tied for 1st place in their division), there's the "good feeling" factor that helps sell tickets. Second, he's a smart pitcher; at his playing size of 5'11, 162 lbs. and a murderous fastball, Guidry is in the Roy Oswalt or Pedro Martínez mold, using a range of tools outside of sheer intimidating size to overwhelm his victims. Third, he will have the respect of pitchers for his fine career. Finally, he's bound to be really different from Stottlemyre. Because of Angus' Law of Problem Evolution, Stottlemyre, like all managers, found that his approaches would get diminishing returns. So when you replace someone, there are always some rewards in replacing her or him with someone fairly different.

The risky parts are (1) that Guidry hasn't done the job at a major league level before, and if the MLB.Com story is accurate, his resume shows working with pitchers in spring training, but not being the staff pitching coach even in the minors. And (2) the Yankee owner, a classic Theory XYY boss, is extremely difficult to work under. Guidry, who's been retired for a couple of decades, may find it hard to put up with bullspit of the calibre Steinbrenner dishes out. It certainly didn't make Stottlemyre any happier or younger-looking.

BUT
...the Yankees also hired long-time major league pitching coach Joe "The Owl" Kerrigan to be their "bullpen coach". Kerrigan's experience and reputation are the opposite of Guidry's. Kerrigan was one of those behemoth-body pitchers. He has lots of major league experience with at least the Expos, Phils and Red Sox (I thought he had worked with the Indians, but I could be off-base on that). He's earned the vocal respect of many major league pitchers with his coaching, though unlike Guidry, his career was not outstanding.

The complementarity is outstanding in many ways. It's like having two pitching coaches instead of one. If one guy can't reach a pitcher, the other is likely to be able to. If one can't solve the problem, the other probably can. It allows for Guidry to have a graceful (for the Yankees' efforts) exit if he can't take the Theory XYY toxicity, because there's The Owl, a recognized Wiz, already familiar with the staff, to take over if Gator either doesn't have the chops or the immune system to succeed. It's brilliant. It's also sad in a way, because it allows Steinbrenner a classic XYY maneuver, which is holding the Bullpen Coach of Damocles over Guidry's head all the time. Guidry knows they have this completely qualified replacement standing off to the side, and Steinbrenner is perfectly capable of using that to torment Guidry whenever it gives the owner pleasure to do so.

BEYOND BASEBALL
In a healthy organization, hiring complementary managers in connected departments is a winner I frequently encourage my clients to try. I like it for the same reasons the Guidry/Kerrigan move is a probable success. People whose experience and thinking style gives them different problem-solving skills create a stronger ability to solve more different problems. Angus' First Law of Organizational Development (All human systems tend to be self-amplifying) describes how most organizations gravitate towards becoming more uniform in their thinking, entropic. The only way to break away from the vortex is to consciously fight it, and complementary staffing is one of the best ways to do it. It works for managers, it works for line staff.

As an exercise, think about a contributor you work with who has great strengths and weaknesses. You may think of her as a "problem". Imagine now a complementary person you might pair her up with and what it might do for the quality or productivity of both of them.

It's worth thinking like the Yankees; it's one of the many bright things they do that don't require a phat budget.

Re-hash: Paul DePodesta, the G.M. of the Dodgers got fired yesterday after two seasons of a five year contract. He's been a lightning rod for the Bitgod contingent (Back in the Good Old Days) of baseball execs and reporters who pine for the social structures of the past, and for two reasons. One, he wasn't perceived as having "paid his dues". Two, he was featured heavily & praised in Michael Lewis' book Moneyball, a work the Bitgods found offensive.

There are key management lessons in this event. This is the third one.

Before I go to Lesson #3, let me make a quick addition, two thoughts I accidentally left off Lesson #2. First, I was explaining how commercial real estate people will re-paint and spackle a property they want to dress up, even if paint/spackle has very little or nothing to do with the essential limits the property is facing. Dodger ownership apparenly spent $20,000,000 tearing out stadium seats and replacing them to improve the color scheme and, according to one source I found, provide better comfort. Analogue real estate behavior...an indication that the McCourts brought their perceptions of how to attack problems from their previous experience, at the cost of misunderestimating the essential limits the team needs to flick aside. Second, journalists, like real estate people, tend to live in a world where image matters more than outcomes. The conventional wisdom among editorial management is that editorial quality is about 6th or 8th on the list of things one needs to aim for in making a publication successful. As they teach at the classic Stanford program for working editorial managers, if you slash investments in editorial staff and replace them with scrubs, it normally takes two years for most readers to "notice", and by then, of course, you're moved on and it's somebody else's problem. Columnists or journalists are rarely held accountable for barking mad assertions they make. In general, the readers just don't hold them accountable any more than people leasing office space make purely rational decisions. In this way, the McCourts and the Bucket 'o Plaschekes have a common world view from which they misinterpret how to go about winning at baseball.

Enough leftovers from #2. Here's #3:

Every manager has a weakest aspect.
In a healthy organization, that limiting factor is a development opportunity.
In an unhealthy organization or an unstable one, that weakness is an excuse to be exploited by political rivals or an excuse for restructuring.

LIMITING FACTOR
For all complex organisms there's always a limiting factor. If a plant doesn't have enough nitrogen, that will be the immediate constraint on its growth. Give it enough nitrogen, it'll be another element it needs to concentrate. No matter what the state, you can always point to one detail/ingredient that, if you could just optimise it, would allow the organism to make better use of everything else at hand and grow better/faster/healthier. In project management limiting factor is called constraint, in some forms of engineering, a gating factor.

In management, it's just a reality. No matter what you bring to the table, there's soemthing you can, and should, improve in your methods or practices to achieve better performance. In a player, that might be learning to throw a little more accurately with the same force, or a half-step improvement on the turn at second base, or an additional angle of slide for that once-every 40 game play at the plate for which it comes in handy. Everyone from Barry Bonds to Mark Buehrle has some part his game that is his least-strong skill and that, if improved, would no longer be the limiting factor.

According to press accounts, DePodesta's limiting factor was one of a rasher of alleged shortcomings. I'm using Ken Rosenthal's column (courtesy Baseball Think Factory) on the subject because it seems the wrap-up least tainted by personal venom.

DePodesta, 33, was the equivalent of a one-tool player, a statistical expert who lacked valuable management skills — most notably, leadership. As an inexperienced GM working for an inexperienced owner, he practically was set up to fail.

DePodesta never ran a department as Billy Beane's assistant with the A's. Never had to persuade others to adopt his vision. Never had to rein in out-of-line employees. Never had to gain the trust of an organizational pillar like Tommy Lasorda.

Reserved by nature, DePodesta didn't want to be like Beane, who is one of the game's most commanding figures. {snip} It's not just about moving chess pieces, as some statistical analysts would have you believe. It's about leadership and communication, about putting out fires and building bridges. About things that, even for the best and brightest, can not be learned overnight.

There are interesting assertions here, and they may actually be DePodesta's limiting factors, except for one (leadership is not a skill, it's a way of being). Whether they actually are or not, it's important to remember DePodesta, like every manager in existence. has parts of his game that are less-refined or skillful than others, and one of them is his limiting factor.

The argument that he was inexperienced is reasonable. That he never ran a department in Cleveland or Oakland looks true. His roles have been more like a Grand Vizier/Merlin than as a Caliph or King Arthur. A functional hiring organization will recognize that going in and allieviate it by recognizing that that will be a challenge for the newcomer and either (a) re-shape the job description or (b) provide complementary talents to surround the contributor, or both. The Devil Rays hired a very young G.M., and have brought in Gerry Hunsicker; who has what on his job description & who is in charge doesn't seem clear to me, but the thought is they will complement each others' skills and strengths. The fact that, for whatever reason, these things didn't happen in L.A., tells us the Dodgers did neither effectively.

Rich Lederer wrote a really perceptive piece at Baseball Analysts. It's built on questions, 32 of 'em, including these that I think are closely related to the organizational failure here:

1. Why did McCourt hire DePodesta in the first place?

2. Why did he give him a five-year deal and then fire him in less than two years?

5. Why wasn't leadership, now a "very important characteristic" in the search for the new GM, not valued 20 months ago when DePo was hired?

6. Ditto for being a "good communicator" and finding "someone with the experience to do the job?"

15. If leadership, being a good communicator, someone with experience, and having a "keen eye for baseball talent" are so important, why didn't McCourt hire Pat Gillick rather than DePodesta?

22. If Lasorda's comment that Orel Hershiser's "not qualified" for the GM position is correct "because he has never done it," then would any of us have ever gotten a promotion to a new position? Based on that logic, wouldn't we all still be cavemen?

Except for questions 1 and 22, I think the answers are all the same: Because the McCourts are getting OJT (on the job training) themselves, and are not particularly healthy upper management for a baseball franchise at this stage of their development. I'm not saying they never will be. Like DePodesta and every other person in life, they have a current limiting factor they need to work to set aside...so they can get to the next one to set aside in its turn. At the very least, they need to realize that when they hired a genius just because he was a genius, they neglected his development, neglected coming to an understanding what his limiting factor was, what the next likely ones would be, and with the mission of either getting him complementary talents or training so that these would not be problems. BTW: that advice is not just for executives hiring managers, it's the mandatory precursor for success for everyone who's hiring at any level. Organizational adequacy requires those practices.

WHAT'S NEXT
Paul DePodesta will work again. He may decide he prefers the Merlin role to the King Arthur one (reasonable choice). He may jump into whatever equivalent offer comes along without thinking too much about it (not good). He may think about whatever were his limits in this first G.M. job and work on blowing them out so he can be even more succesful next time (humm baby).Whenever you leave a position under good or bad or other circumstances, there's always this kernel of opportunity -- self-auditing. DePodesta has a chance to move aside whatever the limiting factor is. If he's smart, he'll wait to hire on with an organization that is interested in his development and also one less buffeted by political winds of Beaufort Force 7.

He may never get the organizational politics thing down. I've noticed in mentoring managers that many people who are not good at it aren't good because they don't care for it or they have a tin ear for it. Like leadership, you can't teach someone to be good at it, only mimic behaviors that seem to work. If he can't cope with it, that may end up being his enduring limiting factor, one that is extremely common in talented contributors, and one that really imposes a constraint on which organizations they should choose to work for.

¿Do you hire with limiting factors and unblocking them in mind? Are you constantly pushing to act on ways to help people overcome their limiting factor or are you blaming/punishing them and being disappointed in them instead? If you don't act on those requirements, your inaction may be your own department's limiting factor.

If we don't change course soon, we'll end up
right where we're headed--Prof. Irwin Corey

Re-hash: Paul DePodesta, the G.M. of the Dodgers got fired yesterday after two seasons of a five year contract. He's been a lightning rod for the Bitgod contingent (Back in the Good Old Days) of baseball execs and reporters who pine for the social structures of the past, and for two reasons. One, he wasn't perceived as having "paid his dues". Two, he was featured heavily & praised in Michael Lewis' book Moneyball, a work the Bitgods found offensive.

There are key management lessons in this event. This is the second one.

We Imprint on Whatever Made Us Successful;
The More That Success is Core to Our Identity,
The Harder it is to Escape Its Cognitive Grasp

The Dodgers are owned by the McCourts. They are not stupid. They are smart...viewed through the filter of where they came from: Real Estate Development. They are not sufficiently self-aware (Third Base in the Management by Baseball model.)

This is neither an attempt to besmirch them nor to excuse their moves, just describe them in a way that makes sense of their decision-making and also to provide you some insights you might find useful in predicting or interpreting their future behavior.

THE MARKET VALUE OF REAL ESTATE IS BASED ON INTANGIBLES...
It's one of those great Steven Wright thangs. ¿Why is it called real estate if it's value is not based in reality? You know the classic mantra commercial real estate brokers use: Location, location, location. To a small degree, there's real-world truth to it. If you build a day care center within ten miles downwind of the Three Mile Island nuclear power plant, or anywhere with 20 miles of the Chernobyl reactors or build your gas station/mini-mart combo in Fallujah or your home in the lowest lying land in the Johnstown flood plain, the market value for your property should be below equivalent market values in safer spots.

That's where the real part of real estate ends, big projects especially. It's about "feelings", "impressions", the ability of the seller to market the property and the prestige (or whatever impression the seller/landlord) is trying to sell. It's much like "branding". Within flexible limits, you can put lipstick on a pig, package Jose Mesa as a closer, or get retailers to pay top dollar to move into your dying mall, if the packaging is right. If it's wrong, you can have a great property people won't snap up. There are a lot of emotions and impressions that go into purchase decisions. I'll quote Dr. James Rigali here, a former real-estate agent: The bigger & more important the purchase is to the buyer, the higher the proportion of emotion that forms the final decision.

To a degree more significant than in other, more tangibles-driven decisions (say steel bars, bituminous coal, what radio station to listen to), Real Estate success is affected by image, intangibles, and not metrics. People who succeed in Real Estate can do that, within some limits, based on a combination of broadcasting images successfully and creative financing, and a lot of unintuitive tax breaks that are mutant anti-free-enterprise wackiness that can make even long-empty space a wash that doesn't put a brake on your overall profitability. In ship-building, you can't do these things.

Note that in baseball, you can market image alone in very specific, unusual contexts. Even the Kansas City Royals (under .400 four of last seven seasons, one season of .500+ ball) sell some season tickets. And franchises like the Cubs can market their lovable-loser image the way a terrible neighborhood can turn yuppie with the right reverse spin.

So the McCourts "know" that to build a successful franchise, whether it's an office park or a baseball club, you need the right image and the outcomes don't matter as much. This knowledge and the successful application of it has brought them success in their primary endeavor greater than almost any of us will ever achieve in our own. They apply what made them successful in their previous endeavor in this one. Their decision to fire DePodesta (and let Tracy go) both seem reasonable if measured in the context of their prior endeavor

...WHICH IS WHY THEY HIRED DePODESTA IN THE 1st PLACE...
Most of us sabermetrics types were very pleased when DePodesta got his chance to be a G.M. It appeared pre-mature from a career evolution perspective, but he was/is undoubtedly a genius and particularly around his understanding of managing and driving change as a competitive advantage.

I'm pretty sure that wasn't why he was hired. He was hired because Moneyball got into owners' hands and passed around. The message was succulent to owners: winning incrementally more without spending more (More With The Same). DePodesta was the co-hero of the book in many ways, and Beane was already busy. DePodesta was like an undervalued commercial property, and one that looked like could make you money.

...BUT SUCCESSFUL REAL ESTATE OPERATIONS REQUIRE NEVER FALLING IN LOVE W/THE PROPERTY...
But real estate, more often than not, is a turnover business. What's a school in the 1960s can be a boutique mall in the 1980s and converted to condos in the 2000s. It just needs to be turned over. Refreshing some appearances if done properly can give the impression of changed value, of better prestige or practicality or whatever image you're trying to broadcast and get the media to help you with.

There's a boutique "mall" in a converted school building in the neighborhood I live in. In 1986, it was a destination shopping spot for the whole middle-class cohort of the city looking for original retailers and quality stuff. The developer just raked it in, but when the local economy tanked, the developers didn't cut rents, they raised 'em. Fewer buyers, fewer dollars, higher rents. You got it, but they didn't (they have a lot of other properties, the biggest and closest actually competes with this one). The place looks like three neutron bombs went off in it (the last two just in case the first missed anyone). It's a Killing Field for Creative Retail.

The developer's solution? They're repainting the building. I'm not making this up. It would be as though the regime that succeeded the Khmer Rouge invested all their energy in building gilded tombs for the massacred. Ridiculous, but remember, this is not a line of business that's dictated by the metrics. I promise you they will get some new victims at the high rents they're telling prospectives they need to pay, and the new paint job will have a part in many renters' decisions.

Hiring DePodesta, apparently a stroke of genius to many, was a classic coat of paint and touch-up for the owners.
Firing DePodesta, apparently a stroke of madness, was a classic strip-down prep to make ready for a new coat of paint and touch-up for the owners.

...AND REMEMBER, THE MEDIA IS CRITICAL TO REAL ESTATE...
Where would Donald Trump be without the press? I'm not asserting he's the "average", he's a caricature, but a caricature always takes the truest-looking aspects of the subject and amplifies them. You can broadcast all you want about the image of your property, but if the business press is not transceiving your images (or even contradicting it), you're hosed.

So in the balance of acheivements and image, when the team was making the playoffs on the backs of Evans' and DePodesta's craft and on the owners' money, the bad-horror-movie-moaning of horse's-axes of Plaschke and his peers (The P-Team) was perceived as something to be put up with. When the appearance of the team's quality was no longer sustained by the win-loss record, the relative weighting of the press image, key to the McCourts (and all successful real estate developers), went up. They listened to The P-Team because they felt they needed their support, and they were telling the owners the paint job blew chunks. And as I mentioned in the previous article in this series, Lasorda was peeing in their ears, too, so they had some "expert" opinion to support he P-Team's Initiative. Without the record to sustain him, DePodesta was in a terrible position, hard to defend by anything but the common-sensical one that any viable four- to six-year plan needs some time to play out.

BEYOND BASEBALL
The lesson for managers outside of baseball is a very very important one. Skills and tendencies and patterns we bring from outside an endeavor are very powerful -- for good and ill. When you try to bring you tools from one line of work into a different one, ask the naive question like DePodesta. But when it comes time to apply your existing nifty tools from that other endeavor, ask the question, ¿How might this tool work in this context? and not the statement This is my way of doing that. Context changes the foundation of every practice and decision, and if you don't overcome your programming, especially programming imprinted by success, you will find it ever harder to succeed.

The McCourts are going to struggle with this. The Dodgers' efforts on the field may not, and that's going to be the topic of my next lesson from the DePodesta firing.