Monday, December 05, 2005

Management Lessons from Terry Ryan:
Weapon of Mass Construction - Part I  

In a business culture that rewards self-aggrandizement, humility can be a powerful weapon. In the Minnesota Twins' case, it's a key ingredient, a weapon of mass construction applied probably in many front office functions, but it's markedly noticeable in their head man, G.M. Terry Ryan.

Ryan has assembled the team that's had five consecutive winning seasons, a pair of pleasantly positive seasons bracketing three consecutive divisional titles. Winning a division title in a medium bracket like the AL Central seems easy on the surface: It's not been hypercompetitive since the Cleveland Indians first round of powerhouse teams petered out after 1999. The three years the Twins won their division, 87 wins each season would have taken first place. Check the context, and you'll see that ease is an oversimplification. Because you can win this division with a relatively low number of wins most years, most owners won't choose to invest a Star Wars missile Defense Initiative sized hunk of cash in assuring it's nailed. It's too easy to stay in contention into mid-September with a record headed towards 86 wins. Since 1996, here's how many wins an AL Central team was required to have to beat the second place team:

Year Wins to Beat
2nd Place Team
Year Wins to Beat
2nd Place Team
1996 86 2001 86
1997 81 2002 82
1998 81 2003 87
1999 76 2004 84
2000 91 2005 94

If you could design a team to win 87 games consistently every season, you'd have owned the title outright seven of these 10 seasons, and shared first place in another, a grand total of eight out of ten. Talk about the seduction of mere adequacy. Angus' First Law of Organizations...that all human systems tend to be self-amplifying...indicates that the gravitational field of mere adequacy will draw AL Central teams to get the highest benefit/cost by figuring out how to win 87 or 88 games a year.

ASIDE: Technically, of course, this isn't exactly true, because the first place teams did win more games than this and if they had won fewer, it's probable the second place teams would have won some of them, meaning to be assured of beating the second place team, you'd need more than this many wins. But you should be able to see the seduction ownership would feel here, and that management would see here -- the ability to be adequate would just about guarantee playoff contention through mid-September pretty much all the time. As long as no divisional rival gets lucky, or decides to shoot the moon, or has everything congeal beautifully, everyone can compete, like pre-Honda/Toyota North American auto manufacturers by being decent.

But it's not easy. Besides the Twins, how many teams have been .500 or better in each of the last five seasons? Seven. The Braves are management excellence incarnate with a multi-billion dollar corporate giant behind them. The Yanks and Bosox have each other to thank for merciless striving for 99-game targets. The White Sox and the A's are remarkable accomplishments by two of the most sophisticated and relentlessly modern organizations in their field. The Cards and Astros have had deep and broad management capabilities. And that's it.

Contrast the hand the Twins front office has to play. A notoriously stingy owner. Threatened contraction (timelines/horizons/budgets become unpredictable). The Curse of Jerry Zimmerperson. An unrivalled set of challenges within this group of eight teams. Okay, the Athletics had those oddly demented post-Haas owners, but those guys eventually let DePodesta and Beane loose on baseball. There's virtually no slack if the playoffs are the goal. Random chance, luck and injuries easily mean 6 games in a season, and if you're aiming for 88 wins, you could easily end up at 82 or 83, and maybe that would get you a division title once every four years or so. For the Twins to have made these targets successfully under these conditions is no fluke -- it takes skill, applied cleverly and consistently.

The Twins management team is very very good. The head man, G.M. Terry Ryan, shared some of his thoughts with me last month at the G.M.'s confabulation at Indian Wells and what he had to say has value to managers beyond baseball, especially those who are neither in the unlimited-resources fields such as military or petroleum or Google on the one hand, or holding on by their fingernails last-gasp fields such as airlines or fishing.

Ryan's team has created a strategy and a set of tactics that optimize for success in this environment. It works beautifully, and it would work in some other divisions, too, though not as well. It involves a lot of skills that are at Second Base in the MBB Model, and a stealth trick that, while competitors know Ryan's using it, still lulls them into underestimating him. As I pointed out in the opener, Ryan's humble exterior and simple-appearing persona, while not inauthentic, disguises a strong mind and a relentless focus on objectives.

In Parts II and III, I'll share some of Ryan's insights you can use yourself.

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