Management by Baseball

The Ozzie Guillen of wonky baseball commentary, Bad Boy of Sabermetrics Don Malcolm was the only non-Florida Marlins fan who predicted their out-of-the-blue competitiveness that led them to the 2003 World Series trophy. His multi-part 2003 analysis series is no longer on the web, sadly. But this year he again predicted a great surprise from the team -- not a pennant, but in the wake of a strip mining of the roster intended to bring the payroll down to the lowest in baseball, the conventional wisdom was they would be the worst franchise in the majors and probably lose an ignominious 100 (or more) games.

There are multiple lessons in Don's getting in right again and in so many others' getting in wrong, lessons you can apply in management beyond baseball.

WISDOM, CONVENTIONAL & OTHER
Just to get some context for this Scottish Skeptic's sibilant study, here are the mainstream preseason predictions for the 2006 Fish.

• Sports Illustrated picked them for last and the 30th best (that is, the worst) team in MLB.
• The Seattle P-I picked them for last.
• USA Today picked them for last; "Figure on the Marlins losing 100 games."
• ESPN's expert staff picked them for last and 101 losses.

Malcolm did something none of these outfits did. He measured by dead reckoning the probable effects of the players lost and their replacements. He did it in a sensible way, neither emotional nor bloodless. His Golden Meanie analysis was posted at Baseball Think Factory back in March. I recommend reading the whole piece, but he processed the runs they would lose and gain on the batting side, then the same for the pitching side, and roughed out a baseline win-loss record based on their runs scored and allowed. It was considerably more promising to Floridians than others -- because he both analysed the rubbish being moved out and noted the high quality of the youngsters the Fish factored in as replacements.

His conclusion:

And since I don’t happen to think the worst-case pitching scenario will (pardon me…) pan out, I suspect that this team will avoid 100 losses. The decline will be palpable, but gentler (though not kinder…) than what the consensus of professional soothsayers and neo-logical webslingers (what—you say you can’t tell the difference between ‘em anymore?) has been imparting to you elsewhere.

THE 2006 SURPRISE
After starting the season 11-31 over their first 42 games, they had an 18-6 streak and a few games later, they are now at 31-39. Not exactly threatening to win their division, but on a pace to better a 100 loss season by 10 full games. 

East	W	L	PCT	GB	vs R	vs L	XTRA	1-RUN	RS	RA	X W-L
New York	46	27	.630	-	36-23	10-4	6-5	18-8	390	308	44-29
Philadelphia	35	38	.479	11.0	26-27	9-11	2-3	8-13	355	379	34-39
Florida	31	39	.443	13.5	26-28	5-11	2-4	8-14	324	328	35-35
Washington	32	43	.427	15.0	21-33	11-10	2-4	7-11	335	378	33-42
Atlanta	31	43	.419	15.5	23-35	8-8	4-2	11-19	357	387	34-40

table from mbb.com

The odds of them losing 100 games are pretty low at this point. They'd have to go 31-61 the rest of the way, which is possible but unprecedented in this century. Since 2001, 60 teams have had 18-6 streaks during a season. Zero of them finished with 100+ losses; in fact zero of the finished with 95+ losses. A 18-6 record doesn't equal a great team, but it does indicate a team that's likely to perform well enough win often enough to avoid ignominy. Note, too, their runs-scored and runs-allowed, an excellent rough gauge for judging what a team's components are worth, are very close; one might expect a team that scored 324 runs while surrendering 328 to be very close to .500, closer than this kettle of Fish has gotten so far. And from a morale p.o.v., being two places above Atlanta in the standings has got to be good, even if it doesn't last long.

While Malcolm was using unrelentingly rational metrics, the mainstream guys were focusing on the fire-sale, and missed just how shoddy some of the merchandise shipped out really was. The bullpen was probably impossible to make worse -- so losing it and replacing the slots with a bunch of very young but (some of them esteemed prospects was likely to cost a little, not a lot. As he wrote:

They had a decent closer (the many-spindled Todd Jones), but the rest of those guys looked like a taggle-rag of white hip-hoppers queasily mixo-lizing Olivia Newton-John covers.

And, of course, the 1997 Marlins went from a World Series to last after a similar fire sale, & the human mind cleaves to the idea of history repeating itself, even if the context doesn't support it well. Which leads us to...

LESSON #1 - WHAT IS PAST MIGHT NOT BE PROLOGUE
The 1997 Marlins won 92 games, slipped into the playoffs and rode that berth to a World Series trophy. The owner didn't make as much money as he planned to so he prepped the team for selling the way many businesses do, by selling off the assets for which there were buyers. The Fallujah-ed roster went 54-108 the next season, an extraordinarily putrid performance.

The context is different, though. While both owners of the 1997 and 2005 Marlins are reviled by fans across the country & both stripped down the team, the ownership cognate behind them was quite different.

The 1997-8 owner was the extraordinarily offensive Wayne Huizenga, a toxic-waste collector and video store magnate. He bought the team at an advanced age where he'd already learned his business chops: determination, relentless bargaining and capturing a large market share of a commodity line of work. In baseball, the talent is the product; it's about elite value-added employees crafting value-added creations out of extraordinary talent. Huizenga didn't really have the stomach for this business model that didn't match hi polar-opposite one that he had mastered so well.

The 2005-6 owner is the lurid Jeffrey Loria. Also a meddling, poorly socialized and controversial operator, Luria's fortune came from dealing art, an industry where The Talent Is Almost All The Product, the opposite of commodity (unless you're Clint Wilder's fave artist, Thomas Kinkade, in which case you're not even different from toxic waste). But fine art and dealing in it is parallel to baseball and the business of it. Loria, like Huizenga, is bringing his existing business cognitive map into the Florida operation, but unlike Huizenga, Loria'a map recognizes that the product requires unique talents, and not merely commodity drones working at low wages. As they were liquidating the team, the Marlins' front office managed to acquire more advanced good prospects than the 1997-8 office had (many of the 97-98 castoffs seem, in retrospect, more about purging payroll than acquiring young talent, though the team did both). So while the young talent that's on the Marlins major league roster really is minor league quality, they are higher-level minor leaguers. 

In sum, Loria's approach, while disturbing, doesn't work against long-term success on the field, while Huizenga's guaranteed it.

BEYOND BASEBALL
Pattern recognition is one of the most powerful tools we humans have, more powerful even than Eddie Gaedel's custom-built baseball equipment.If we don't use it, we lose.

But the reverse, "If we do use it we win", is not true either. We need to use it properly, pay attention to the context and the environment in which the cases we observe are unfolding. As managers, it's really important we don't make the mistake all those vaunted baseball pundits made -- seeing part of a pattern and assuming it's identical. 

How do we avoid it? Common sense is one method, though Malcolm's method, applying metrics, is better. You won't often have pure numbers for analysis, and if you are too dedicated to them, you can overlook subtle differences by converting a heuristic into an algorithm, a guarantee of failure, as described in that wonderful article by Roger L. Martin, the dean of the University of Toronto's Rotman School of Management. Common sense shaped by numbers is best of all.

When a surprise like the 2006 Florida Marlins to date come along, it's a great reminder of the methods experts use to defeat themselves, and what the maniacal outliers, like Don Malcolm, can add to human knowledge.

There are more management lessons from Malcolm and the Marlins, and I'll explore them in the next entry.

As pointed out by my blog buddy SlackerManager, the Northern League Schaumburg Flyers are going to try to become America's Minor League Team by resurrecting the old Bill Veeck idea: Let the fans manage the team. This includes managerial decisions such as the batting lineup, fielding positions and the pitching roster for the second half of the club's season. As a team rep said, they aren't going to allow wild choices such as playing a catcher in center field, some thing that used to be done, but hasn't been since Craig Biggio became a Jardinero Central. 

SlackerManager Bren wrote about it here and he's (again) well worth reading. He believes it's highly-risky and likely to fail for a lot of good reasons. And I agree with him. 

His reasons:

• Players may resent being managed by amateurs,
• The "manager" is a faceless group of fans (who might change day to day), lowering accountability,
• "There’s just too much nuance to the aspect of teams and teamwork that customers/fans will never see or experience".

I think the middle reason is the most powerful. The essence of successful management is accountability, either the sense of obligation to the employer or to one's own craft. There are just too many decisions most managers should be making or thinking through that someone disengaged is likely to be successful over time. In a society like ours, where the dominant religion is commerce/money, many people who pay to participate in this Schaumburg arena are likely to have a sense of entitlement (¿and who's to say it's not merited?).

Bren's sense about the first point is well-taken -- competitive professionals are reallyunlikely to want a manager you can't have a one-on-one (one-on-4,000?) with, And it's the last point that goes to what I believe may be the mis-conception behind the idea if it's designed to succeed in the W-L department. The team is going to be trailed by a "reality tv" crew with the thought of making money by delivering a serial show -- kind of like Big Brother With Tuf Skin & Crackerjack, so if you measure success in the ability to sell logo-wear or gross income, it might be successful...but it won't be baseball.

MISCONCEPTION: THE WISDOM OF THE FANS
I think the Flyers might be assumin' that the fans won't make many mistakes and that'll lead to "good" management. In competitive environments in and beyond baseball, merely not making mistakes rarely leads to success. The "Wisdom of Crowds" idea popularized by New Yorker writer James Surowiecki and turned into a popular readable book explores the belief  that crowds acting together can make smarter decisions than individuals experts acting alone can, and then presents examples that support the arguments and the conditions under which "the wisdom" thing works. Many people though have simplified this simple idea, ignoring the limited conditions under which it works and turning it into a weapon to bash expertise, to pretend that a tax attorney in Brooklyn can be just as successful at running a family farm in Iowa as a fourth-generation family farmer who has an Ag degree and has been doing it for 22 years (or that the farmer has the potential to make as effective a counselor as the Brooklyn codger). The idea as morphed by simplifiers feeds a powerful underlying current in American thought -- not a bad nor a good one -- that expertise is overrated and that anyone can do anything if they just set themselves to do it (bootstrapping, Horatio Alger Hiss-style). 

Populist, native, and in this particular case 99% false.

Surowiecki makes explicit that the places the "wisdom" are effective are those removed from "skill", so his best examples involve items like guessing the # of jellybeans in a jar, the temperature in the room, or what group opinion will be on issues. And I'm not telling you anything you don't know that managing a baseball team (or running a non-commodity business) is anything like that category of decision/guess.

The book is very approachable and fun.  For a more rigorous and actionable view of how to implement the value of the wisdom of the crowds, the unsurpassed blogger/essayist Dave Pollard delivered a two part entry (this and this) on how to think through creation of a system to take advantage of the wisdom and how to deliver it. You will never find a more specific and valuable actionable description anywhere. I love Pollard's work, not just because his entries make mine look terse in comparison but he's experienced and knowledgeable and he knows his stuff in a wide, polymathic swath of practice.

If the Flyers front office is interested in actually trying to apply the "wisdom of crowds" to deliver winning baseball, I recommend at least one reading of Pollard's polemics. It's not quite as approachable as Surowiecki's (meant to be stimulating and entertaining, not applied), but if you can't dedicate enough time and effort to wrestle Pollard's description into something you can deploy, you probably shouldn't attempt the beautiful of context-sensitive and risky model.

History & future protection come from the very same place,
Reality is just a conception, the truth will always replace.
-- The Sons of Champlin

In Part I of this entry, I described how baseball is way ahead of other lines of work in understanding the organization is really an on-going prototype that has to evolve every day -- most days just a little, but with the understanding that it was the norm. To do that requires both playing to win today while concurrently testing/experimenting to find aptitudes, processes, methods and relationships one can use to achieve future success. 

I gave an example of how one of baseball's best at this, Milwaukee Brewer GM Doug Melvin, played around with this, and how his protégés, Stanford professors Jeffrey Pfeffer & Robert Sutton, talked about it in a non-baseball setting. The Pfeffer/Sutton book is one I haven't read yet, only a couple of long excerpts and the interview I quoted from in Part I, but what I've gleaned so far is worth the price of the book. Good, actionable constructs to help think through how to design action.

I promised to make some suggestions on how and where you might implement some experiments, Melvin-Pfeffer style.

MAKING THE MOST OF BLOW-OUTS
I write about this in more detail in the new book, but all organizations face projects or quarters or initiatives that are blow-outs, bad and good. Way over- or under-budget, way- late or early, specs discarded with the project managers trying to put together the shards of what's left. Bad managers ignore the fecund opportunities to experiment in these spots.

In baseball with an 8-2 lead or deficit, this is where field managers use their bench players, try untested tactics, try players in new roles. Pitchers try different sequences or pitches they're are working on. 

Beyond baseball, most managers see being way ahead as an end, not both an end and a means...they'll say something like "Well, things could go wrong, let's just keep working overtime...if it ain't broke don't fix it". And running way behind or on a cause that's lost, they like to pretend if they just drive everyone as though they were going to be able to hit the finish line on time, it'll magically happen. It's nonsense.

Explain to staff and your own management this is where you get to try out new things that probably won't have much of an effect one way or the other on the current project, but could lead to gains in subsequent ones. You'll probably have some sales effort in orgs that aren't already doing this (that is, most of them), but it'll be worth it. 

I don't suggest you throw out everything you know works all at once (if it all worked you wouldn't likely be in the spot you're in). But test a few things at a time, like Toyota on the factory floor. Keep track of what your experiments reveal, and you're likely to find a few that you will propose to be default behaviors on the next initiative and a few you won't tough with a 60'6" pole. But if you can't find elbow room to experiment and test in blow-outs (winning and losing) you probably shouldn't be trying to manage in an organization in a competitive line of work.

SETTING ASIDE SLACK
There are myriad opportunities on ordinary projects and initiative to experiment, they're just not as risk-free. Unless you do what 97% of all departments should do to be effective, set aside slack in all your work. There's a lot more about slack, finding it and using it, in the book, and I won't belabor that here. If you don't inject slack in all your work, start doing it immediately.

Once you have slack, then you can use that to apply to experiments that might or might not work out. The scope of the experiments should be within the context of how much slack you have to burn up in case of failure. But you knew that already.

The fear of failure constrains the possibilities of success. Healthy organizations in competitive environments are, as Pfeffer said, on-going prototypes. Learn this balance between winning now and building for the future, how to work with it from baseball in general, and Doug Melvin in particular, and it'll give you a solid competitive advantage.

I'm honored to be chosen the author of the fortnight at Inkwell.Vue, the book discussion conference/chat at The Well. You are all invited to come over and read the polylogue. Well members can ask questions live and non-members can submit questions through the moderators.

I'm inviting you to check out what a cool place it is to chat about MBB for several reasons. First, The Well is, I believe, the oldest continuous general purpose on-line community. Second, the concentration of interesting people on-line there is unsurpassed -- the anti-MyPlace (that is, if you put The Well & MyPlace onto a single server, there would be a tear in the space-time continuum that even Captain Janeway couldn't bully her way out of). Third, the conversation leader is Stephanie Vardavas, who was MLB's staff attorney for a decade and has been involved in the legal and business side of sports for 27 years; and like me, she's a big fan of The Blade. She knows a ton about the inner workings of baseball as an institution, a preciously rare domain expert.

I encourage you to participate as a reader; join us.

To submit a question, send it to the mods via the e-mail account inkwell at their domain. Which is well.com .

BACKGROUND ON THE WELL
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