Management by Baseball

Tampa Bay Rays' manager Joe Maddon doesn't win every game, but he is an indispensable role model for every manager, in and beyond Baseball.

I've written about Maddon before, his omnivorous pursuit and relentless application of knowledge that might make a difference in his management. Like all great managers, Maddon is attentive, listening to anyone who might be able to provide something that could make a difference strategic, tactical or inter-personal. Like all good or better managers, Maddon is in the minority who actively likes to experiment when there's nothing or little to lose (for example, his first two full seasons with the written-off-as-hapless Tampa Bay Devil Rays, when no one expected them to win).

But now that is team is kicking serious AL East axe and is competing for the flag, a moment when even brave managers expend more ergs trying to not screw up than they do come up with new twists, Joe has resisted the Siren Call of Verschlimmbesserungophobia: The Fear of Making Something Worse By Trying To Make It Better.  Verschlimmbesserungophobia is something better known in American offices and factories by the shorthand "If it ain't broke, don't fix it".

Verschlimmbesserung is a valid concern. Many initiatives struggle unnecessarily  when, for example, a project that is slightly ahead of schedule encourages the addition of good ideas (also known as "feature creep"). I worked on a project recently for a client who highly values design and who has customers who value it. We were roughly on target on a fiercely ambitious schedule, and the client saw the opportunity to make the product better by using outside professional designers for the deliverables. Both designers totally crashed their deadlines, ripping apart the delicate schedule, and made the project not only late, but, through the necessity of last minute improvisations and staffing collisions and other resource contentions, less good overall than it would have been with less polished design. 

That's verschlimmbesserung in action, a noble try that backfires and leaves you worse off than you would have been if you hadn't tried it. 

But "if it ain't broke don't fix it" is a fatal protocol for an organization in a competitive field. Like my client, Maddon knows this. 

A week ago Sunday, Maddon's team went into a game with the Texas Rangers as (surprisingly to most) holding first place in the American League East.

East	W	L	PCT	GB	L10	STRK	vs E	vs W	ROAD	RS	RA	X W-L
Tampa Bay	74	48	.607	-	7-3	L1	28-19	19-11	29-31	557	487	68-54
Boston	71	52	.577	3.5	7-3	L1	21-22	20-15	28-35	633	508	74-49
New York	65	58	.528	9.5	4-6	W1	23-22	16-10	28-31	586	548	65-58
Toronto	63	60	.512	11.5	6-4	W1	20-20	17-19	29-34	522	483	66-57
Baltimore	59	63	.484	15.0	5-5	L1	19-28	15-16	28-39	618	620	61-61

             from MLB.COM

And most managers, even in Baseball, which is a lot less innovation-averse than organizations beyond the game are, would be thinking, "let's not screw this up". The Sunday game starts well and proceeds without serious danger for the Rays until the bottom of the 9th inning, the Rays holding a 7-2 lead. Here's the sequence up to a moment at which Maddon will have a memorable decision-making moment:

Texas - Bottom of 9th	SCORE
Juan Salas pitching for Tampa Bay	TAM	TEX
J Saltalamacchia singled to right.	7	2
C Davis walked, J Saltalamacchia to second.	7	2
T Metcalf struck out swinging.	7	2
G Balfour relieved J Salas.	7	2
R Vazquez walked, J Saltalamacchia to third, C Davis to second.	7	2
B Boggs grounded into fielder's choice to second, J Saltalamacchia scored, R Vazquez out at second, C Davis to third.	7	3
B Boggs to second on fielder's indifference.	7	3
M Young walked.	7	3

The bases are loaded, so the batter coming up is the tying run. Unfortunately for the Rays, that batter is Josh Hamilton, the All-Star Game Home Run Derby star, at that junction, hitting .304/.369/.549 with 28 homers and with two hits already in the game. A homer ties it up and gives momentum to the Rangers playing at home even if the Rays escape the inning. Rays pitcher Grant Balfour had never as a major leaguer faced Hamilton. And clearly, he didn't have his best control (he'd walked two of the three batters he'd faced, one to load the sacks) so any clever gaming that catcher Dioner Navarro and Balfour might have devised to pitch around Hamilton's monstrous wheelhouse smackdown crush-o-rama batting form was going to be (at best) wing-'n-prayer time.

So Maddon called for the bases-loaded intentional walk, forcing in a run, putting the tying run on and bringing the winning run to the plate...a move so counter to protocol that it apparently has happened only four times in the majors since the start of the American League. 

This gutsy move happened to work for the Rays. The end of the sequence:

End of game, Rays win.

At risk was more than a loss; it would have meant a loss of managerial face, which is exactly why with four exceptions in over 100 seasons, you never see it. If Hamilton hits the tater there, it leaves the manager the platitudinous pablum prose that their best beat out best yadda-yadda. But look at the standings (above) again. The Rays seasonal lead is not insurmountable, and it rests heavily on winning more games against the West than the rivals do. Every single game is meaningful. The Rays need this win, even if it means risk.

In reality, addiction to safety is, in itself, unsafe, because protocol/standard-operating-procedure/The Book is designed to prevent you from departing too far below .500. Verschlimmbesserung exists, but in a competitive endeavor, consistent adherence to the safest, or even just safer tactics drags one towards .500, and if you need to be above .500, krazy-glueing yourself to any technique that gravitates you towards .500 is a losing proposition. 

Maddon never stops considering the possibility for innovation, for breaking the rules, for doing something new to try to make his team more successful.

That's why Joe Maddon is one of the most important managers in any field to track and observe, whether his team is winning or losing. Watch, and learn.

For every economy of scale, there are at least two diseconomies of scale --Angus' 2nd Law of Management

I'm going off-topic for the only the second time in over five years of webloggin', 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 big lazy slab of nonsense that has nothing to do with the real world, merely a bit of wishful thinking.

It's a 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 narrow 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 amount, but the pre-operational 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.

BIGGERISM IS BETTERISM IN BUSINESS & GOVERNMENT 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 that kind of an organization asks a question of another, she won't hear back, "I'll get you a memo next week". If you ever saw small remote government offices working, you likely would have seen something identical. Soil Conservation Service offices, for example, 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 séances. And this all happens no matter how wonderful and committed and pure of heart and deed the massive-organization contributors are. That plaque/overhead of standardization and communication is an inefficiency tied directly to scale -- the enemy of quality. All that overhead is getting expended by large organizations to try to recover the effortless knowledge diffusion and ability to make quick decisions like the entrepreneurial start-up does naturally.

There are people who still believe in the Economies of Scale and not the Diseconomies because they already have faith in it and note that 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 Olympic Games in Red China, proves the point beyond any doubt: Large Scale is the Enemy of Effectiveness.

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. A Dartmouth College prof has modeled demographic factors that allow him to make some predictions that sort of work at the top of the Olympic medals table. Most people measure it by counting the most medals. Some order the nations' rankings by counting the most gold medals.

If you look at it by population, probably Australia with 1/15th the population of the U.S. and almost 1/2 the medals would have to be a contender, followed by Cuba at 1/25th the population and 1/5 the medals.

In reality, though, the winner is 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.

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 gone down sharply. The prestige of being an athlete has gone down. The social benefits of being an athlete relative to others has gone down.

Even if you allow for the fact that breaking into smaller countries means there are more total entrants from the sum of these nations than the Super-Empire USSR got granted, that pretty much means removing their Bronze medals...if you add the Gold and Silver alone and ignore the Bronze, there are still almost 20 more medals from the broken-up Soviets than either Red China or the U.S. managed to capture. So in spite of all the cuts in spending and prestige, the performance of a diversity of smaller units just crushes the bigger scale of the Soviet Union the way a Chinese Red Army tank squashes a pro-freedom citizen.

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 fifteen smaller indies (indie for now at least).

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 at least. 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.