Management by Baseball

"You can have money piled to the ceiling but the size of your funeral is still going to depend on the weather."
--Chuck Tanner

Baseball attracts as many deranged and bad ideas as non-baseball business...it's just rare in baseball when one sticks. When one does, it's more often for a short-term financial benefit (for example, collusion in boycotting individual or whole cadres of talent, or having interleague games and stats count as league games and stats) than for purely emotional and fact-challenged reasons.

Which is why I'm skeptical that the proposal of a pair of distinguished, bright college professors (one of Genetics, one of Law) is going to get much support from either team owners or baseball fans. It's what I call a Caffeine Jihad, a Captain Ahab-like crusade about a side issue that arises from feelings, and gets attention out of proportion to its significance. This odd proposal appeared in the San Francisco Chronicle, an op-ed page item under the title, Can pro baseball save itself? 

The title itself is laughable (I suspect the paper's copy desk, not the authors, named it), and it gets more Wackorama from there. But before I share its innovative and deranged concept with you, I need to describe what a Caffeine Jihad is.

THE ORIGINAL CAFFEINE JIHAD
I once did work for a Northern California high-tech company whose relentlessly-unimaginative Finance head-man was relentless in his pursuit of...the contents of the company's refrigerators. He was a veritable Captain Ahab on the hunt for recreational beverages. He knew the company really needed to tighten its expenses...the Diseconomies of Scale meant the trajectory of growth-rate and the ability to acquire exclusively A or  A- talent was coming to an end, and so outrageously high margins were inevitably in decline and if the everyone didn't take action before that started, it could get ugly. This was a company where people generally didn't look to waste money, but no one ever said "no" to any reasonable-looking expense.

But he became obsessed with the company's free high-end coffee policy, a major cheap perk (pun intended) that many people appreciated and took advantage of (and this is important: were made more productive by), and the rest saw as a symbolic proffering of the company's quality image. The firm was in the same home-town as Peets Coffee & Tea (if you're not familiar with Peets, it's in many ways the parent that generated Starbucks), so thinking buy-local and buy-quality, they stocked the kitchens with Peets. It was cheap relative to the company's investment in talent, and had those two benefits of the caffeine stimulating productivity and broadcasting the cachet of official generosity.

So rather than attack the habit of not ever saying "no" to any reasonable-looking expense, a serious, challenging and long-term change effort, Finance Man came to see the simpler free Peets as the issue. As his idea got no traction, it became more and more a Caffeine Jihad for him, his emotional stake more obviously out of scope. Funkily enough, his plan was to both downgrade the beans to something like Folgers, and to ask people to ante up some change for the cup (a heinous combo, because from getting good stuff for free, they weren't getting good stuff for pay or bad stuff for free, but bad stuff for pay).

He ultimately won his holy war, and with great cost to tactical morale and some strategic talent. He waited way too long to take on the major "just say yes to reasonable-sounding expenses" issue, and when he did, he'd already used up all his credibility and favours on the Caffeine Jihad. Instead of a challenging but viable transition to a new set of comfortable behaviors, the firm lurched and fought and sputtered like a damp July 4th roman candle.

THE USE OF BASEBALL IN STEROIDS
Rine & Sugarman's Chronicle op-ed proposal was so deranged because, I believe, it resulted from side-issues on which the the advocates have allowed their emotions to trump both facts and common sense. The title itself (again, I'm not at all confident the authors devised it) is a big warning sign, anchored off an idea that both defies common sense & for which they present no data to support. 

How much does the sport or the business need saving? Baseball's paid attendance last year was roughly 78 million fans, about 12% more than in 1993, before the 1994 and 1995 labor actions. The leagues expanded (a pair of teams) since then; if you remove those two franchises' attendance, it's still 6% higher. The median baseball franchise appreciated in value 2% last year, if you can believe Forbes. If the magazine is correct, that's a stunning gain in the face of North America's overall GDP sag. Beyond North America, there's somewhat more significant world-wide investment on the endeavor, most clearly discernable from the World Baseball Classic, an event that seems to have caught on & that's somewhat popular in a lot of different places that had no serious baseball culture two decades ago. Television viewership of baseball is down roughly in proportion to the decline of TV viewership in general.

Perhaps the headline is aimed at Baseball's soul being saved, a faith-based salvation. But if the proposal is aimed at the soul, it misses the mark because its methods are totally aimed at holding hostage/in trust players' pay. The author's aim, in the authors' own words:

Require all players to place a substantial share of their baseball earnings in a trust they can access at the end of their careers if they have been clean throughout.

And really, it should be rephrased "they can access at the end of their careers if they can prove they have been clean throughout". False positives (test finds substance that wasn't actually there or was something else mis-recognized) are common in testing, not to mention false negatives (test results that miss substance abusers' chemical residues). I'm guessing the authors know as well as we do the tests are imperfect, but they think their sanction is so worthwhile, that it doesn't matter.

Anabolic steroids present baseball with problems at multiple levels. The physical damage that players do to themselves may be the least of it - the just reward of those who cheat. But the damage to others is much deeper. Fans have become disgusted by performance records that owe more to organic chemistry than to talent, by psychodramas of tainted stars explaining why they are not responsible for their actions, and by the reluctance of the commissioner, owners and union to deal with this issue honestly. Most of all, we lament the message this situation sends to our youth and to unjuiced teammates competing for a place on a team.

In this part of their argument, they are talking about anabolic steroids only, ignoring the bulk of the performance-enhancing supplement use: human growth hormone (HGH) and various forms of stimulants (coffee, which no one is currently arguing should be banned, and amphetamines and related compounds, which are broadly vilified and explicitly banned). I'm a little disturbed by their suggestion that death-by-cancer or liver failure is a just reward for steroid use (I hate José Canseco & Roger Clemens, but the death penalty still seems an over the top response to me). ¿Again, though, who are these "fans" the authors cite? I'm sure there are many, but they don't constitute much of a sub-population if recent attendance or purchase of ridiculously-expensive logowear and trinkets are indicators (and they are). 

ASIDE: I'll bet a nickel that if they took a fair vote on actual fan opinion on performance-enhancing supplements, one-ticket, one-vote, among major league baseball game attendees, the winner by far would be "Uncommitted", with status quo coming in second and strong action to suppress use third (and only coming in third because there was no remainin' option to rank ahead of it.) My very informal asking-around among people who are actual fans indicates very few consider supplements a particularly- important issue and  among that minority, even fewer who want to see some Department of Homeland Purity police action to deal with it. This isn't to argue nothing should be done, just that the "fans are outraged" argument is brittle and unfounded.

We must have no shortage of sympathy for the "unjuiced teammates competing for a place on the team". That quandary is just brutal, and it's one we all face Beyond Baseball, too. From the stock analyst tempted to ignore a publicly-traded corporation's shifty accounting accounting practices to get their business (and pass the risk on to the investors to whom she "owes" the truth), to the mortgage broker who suspects the buyer he's selling to might not be able to afford the closing price but doesn't want to miss his quota (and perhaps, as a result, his job), to the University teacher looking for tenure and being lured to teach and write about topics they find marginal-but-glitzy rather than what they most care about...we all face this zero-sum game. 

Require that a substantial share of baseball salaries - say two-thirds of earnings above the league minimum guaranteed by the collective bargaining agreement - go into a trust for the duration of the player's career. The trust would pay taxes and would be managed by a professional organization of the sort that administers retirement accounts.

Great. I love to see they trust Lehman Brothers & Merrill Lynch.

Apart from any other ongoing drug-testing regimen, urine samples would be regularly collected from players and securely stored. Upon retiring from baseball, those samples would be analyzed by the most advanced methods available. These methods improve every year, and it would be a bad bet that tomorrow's technology will not detect yesterday's steroids.

If a player's stored samples are clean, he would get everything in his trust and remove any suspicion about his honesty. If the samples prove he cheated, after appropriate retesting and inevitable challenges, his share would be forfeited. Moreover, records set during a player's career would initially be "provisional" and "official" only upon successful completion of testing.

Holy Cow, as a sober Harry Caray might have said (a totally-blitzed Harry Carey might have invented this, but I doubt it). The record book (already shaky because of interleague play where you can win, for example, an American League Homer 1^st by dint of plunking more taters against National League teams, or get into the National League playoffs because you had a better record against American League teams than a National League rival who had a better record against National League teams...and yes, that's already happened) becomes a veritable Soviet Encyclopedia. All the all-time records become conditional, with differential enforcement based on BT (before testing) and DT (during testing). If, for example, Barney Rubble led the league in batting average this year, and retired in 2021, the "record book" would list a conditional leader for 12 years, one who might remain or disappear after his retirement (the way Nikita Khrushchev and his drugis made Joe Stalin's name and face and eponymous Grad disappear after the old bastard bit the big one [Volgograd, in case yer interested]). The need to chronically update all this "history" conditional on the approval of external, politicized sources, while a delight for fans with OCD or 12-year old boys with nothing better to do smacks exactly of Soviet chronic revisions.

If cheaters were discovered, forfeited assets would be distributed equitably. A fraction could be returned to team owners to recognize that their investment was damaged by cheating, to the trusts of the cheater's teammates, and to youth baseball programs in the communities where the player served. Agents not parties to the abuse would keep their fees.

Good. So an owner can benefit thrice from hiring a juicer: First, by bringing more fans to spend $$ to watch him play "better", potentially improving the team enough to play in the playoffs and sell tickets to additional events, and then finally by making back (¿with interest? Not mentioned, though since this financial-instrument thang sounds like a Roth IRA, I suspect they might want to insulate the players from hyper-inflation...though if they don't care if the juicers croak, maybe they don't care if the non-juicers take an inflation hit) a piece of their labor costs. And players' agents get to keep their take if they can maintain deniability. Owners win, agents win (if we buy into the authors' suspicion that juicers make more money, then we need to assume an agent's take of a higher-paid career brings higher fees), players, as a composite, lose. I do like the youth baseball angle. ¿How about we just require players of all pro sports to tithe or so for youth baseball? ¿Would players hold Tea Parties to protest?

CAFFEINE JIHAD DELUXE
There are so many problems with this proposal, I can't (for your benefit, I won't) add another 3,000 words to deal with it all.

But let's answer some questions.

1. Is the use of performance-enhancing supplements by baseball players a "problem" we should invest cycles in fixing?
I'm not sure supplements are even "a problem". Could they be, overall, a benefit to performance and the enjoyment many fans get from seeing their old favorites get extended careers? I'm pretty sure the guys who took the greenies would tell you they performed better, and that helped their team. I'm pretty sure it's not a one-sided argument on either side.

Let's presume it's a problem. Is it worth investing cycles in? Given the universality of this form of cheating, the hundreds of billions of dollars that have been secretly borrowed or stolen and the hundreds of thousands of jobs that have been liquidated in this country and shipped overseas for performance advantages that have proven to be terribly cancerous to the macro-organism we call "the economy", is sports where we want to apply this first? And if sports, why not concurrently propose this for the NFL, where supplement-based physical re-sizing is close to universal and where the union is already busted?

I think sports isn't a great place to start. If we're going to do this to Baseball players, let's do it to public officials (keep your campaign promises or forfeit your pension and a percentage of your campaign contributions?), military officers (win your campaigns or lose your PX privileges?), college profs (graduates know their subjects or lose tenure?)..

2. In Baseball, which has a more than a century of deeply-imbued tradition of cheating to increase your team's chances of winning, is this the place to draw the line?.
Everything from scouting, to heckling, to sign-stealing, to intentionally slamming into the catcher to knock the ball loose on a play at the plate, to groundskeepers tweaking the field is designed to use some kind of unfairness, in many cases outright rule-breaking to give one team an advantage. This is different, btw, from cheating to hurt one's team's chances of winning (game-fixing). Some will argue it's the opposite of that.

It's accepted in baseball that the team will cheat to benefit their chances of winning in many ways. Hmmm, I can see both sides of this one.

3. Does Economics-based thinking hold any water outside of textbooks?
No.

This op-ed is an example of the incredibly goofy lengths to which people who think like economists (a group of people self-selected to believe that everything has a monetary value, and further one that can be measured) will go to in their belief money drives behavior.

I can only think the authors forgot their own sandlot days, how much they wanted to play and do well and win if at all possible. I'm only guessing here, but I suspect that when Rine & Sugarman played sandlot or little league, if another kid had offered them money to perform less well, they would have turned it down. I'm sure most pro baseball players would, too, because the game is one of the many things that makes us do things that defy what the self-selected bias of economists imagine is an unavoidable gravitational field that pulls us towards money.

I went to Sugarman's site and scanned the papers he'd chosen to share (a lot of brain-food there). A few of his papers (they wouldn't load into my PDF reader, so I didn't have the pleasure of readin' them), look from the titles as though some of his thinking is in using money sanctions to get manufacturers and health care providers to improve product safety and performance. If so, bravo; I think that's a very good application of the kind of thinking the profs have invested in this sanction idea for Marvin Benard and his henchfolk. But as a rule, people in manufacturing and healthcare administration really care about money a lot; for the majority of baseball players, it's not the main consideration (that is, if you offered major league ballplayers a 15% raise to work in an office or as a casino greeter or own a small business, the majority would decline your offer).

And that's where, IMNSHO, I think Rine & Sugarman came way off the tracks with this proposal, that is, believing that money is a good way to manipulate ballplayers.

That belief is an emotional setting, one that I think created this demented proposal. Luckily for Economists & their acolytes, economics is not wholly accountable the way Baseball is.

Organizations, especially larger ones, have a tendency to underuse talent because of a habitual failure to do what Baseball is particularly good at: OMA (Observe, Measure, Analyse). Not that I believe Baseball is perfect at it (more on that later), but Baseball recognizes what most organizations don't: The Talent Is The Product. 

So in Baseball, the organization continually, relentlessly tests every contributor,  observes and measures the results and then analyses the outcomes to discern what each is good at and in what areas each needs improvement. Out of that comes action: And then they apply corrective suggestions, coaching and modified deployment of each individual talent. And then they repeat the practice. How does this differ Beyond Baseball?

THE QUATERMOUS PROTOCOL
One financial organization I've done a lot work for over the years is quite good at recruiting, but they habitually waste lots of the talent they bring in because they "play favorites". It's part of the organization's personality to take the careful impressions they had of the recruit's hiring interviews and resume, (and sometimes, but not always, the first couple of days of work as well) and form a concrete judgment of the newbie's skills and level of potential. Because they are way above average at acquiring talented people, this hasn't yet been fatal, but they tend not to recognize and promote their best performers or correct correctable limitations in their Golden Children.

One of the most competent managers in the organization, I'll call her Mrs. Quatermous, is one of the most egregiously lazy in the OMA practice -- and does it deliberately. Quatermous'll tell you her rationalisation: Early indicators are decent predictors, and it takes time to practice OMA, time that can more effectively be spent invested in other management activities and defending her turf in the fairly political organization (all finance-dominated organizations have high political overhead).

Overall, she's really good at her job, but she doesn't make use of all the talent at her disposal, and does only (and is qualified to do only) the most pro forma of evaluations -- which makes sense to her because her evaluation is TTOAE (think-through-once-apply-eternally). Her favored contributors get the recognition, the choice assignments, ergo the choice bonuses, ergo the promotions.

This is normal behavior in the business and academic and military worlds -- where the Talent can get Too Big For Their Britches To Fail (also known as the Peter Principle). In those endeavors where the field is very competitive or even zero-sum, The Quartermous Protocol can be fatal. In Baseball, the most competitive of endeavors (nothing less than the combination of excellence and a good deal of luck wins flags) it almost inevitably is.

THE WALK-ON FACTOR
If you know what a "walk on" is, skip to the next paragraph. A walk on is a college athlete who wasn't recruited to the school's athletic program &  isn't getting an athletic scholarship. Most programs allow for students who want to make the team to try out, walk on the field and show their stuff. And in most of the programs that allow walk ons, a few make it, sometimes only as roster-fillers, sometimes being allowed to show their stuff and earn, if they have the chops, a place as a contributor on the team. Of course, college isn't the professional world; team success and failure is relative, not absolute as it is in the Major Leagues. So college teams can, and do, waste walk-on talent without the repercussions a Major League team would suffer.

But in your own organization as well as in Baseball, it pays to pay attention to your own "walk ons", that is, the people you hire as temps or those who didn't look like Pulitzer Prize winners when you brought them on...because that walk on could turn out to be an Ozzie Smith or Ryan Howard.

The New York Times yesterday ran  Jack Curry's piece on walk on talent.

Eric Karros remembers being among the 60 or 70 prospects for one or two walk-on spots on the U.C.L.A. baseball team. Karros, a talented high school player, took batting practice alongside a few wannabes who decided blue jeans were their best choice as uniform pants that day.

Karros made the team, knocking the jeans-clad guys off the field. He was redshirted as a freshman, was a starter as a sophomore and was drafted by the Los Angeles Dodgers in 1998, after his junior year. Karros began as a college walk-on and surprised himself a bit by climbing to the peak of his profession.

“It ended up turning out well for me,” Karros said. “Playing major league baseball, that just didn’t seem realistic to me.”

When Brett Gardner was named the Yankees’ center fielder this month, he was the latest example of a walk-on who could have an impact in the majors. Gardner was a walk-on at the College of Charleston in 2001. Like Karros, he eventually earned a partial scholarship and reached the majors. Karros played 14 seasons; Gardner is in his second.

It is not uncommon for a walk-on to grow into a stellar player in college, but it is unusual for a walk-on, even one who has been scouted and invited to try out, to make it to the majors. Still, the list of former walk-ons includes some splashy names.

The Hall of Famer Ozzie Smith, who may be the smoothest defensive shortstop ever, walked on at Cal Poly-San Luis Obispo in 1974. Ryan Howard, who was the National League’s most valuable player three seasons ago, was an invited walk-on at Southwest Missouri State, now Missouri State. George Sisler arrived at Michigan in 1911 with no scholarship. He pitched and hit brilliantly, and developed into a Hall of Fame first baseman.

Smith said he never considered his path abnormal and called it “just the route I took.” Because Smith was barely noticed out of high school, he went to Cal Poly to get more exposure. He received a partial academic scholarship as a freshman and earned a baseball scholarship a year later. His wizardry followed soon after.

“Being a walk-on didn’t discourage me,” Smith said. “It was a challenge. It was all about getting the opportunity. The one thing you have to do, whether you’re a walk-on or not, is, once you get that opportunity, you have to go through the window.”

{SNIP}

In some instances, a player is a walk-on for a short period. Keith Guttin, the coach at Missouri State, said he ran out of scholarships before Howard’s freshman year, so he could not offer him any assistance. An N.C.A.A. Division I baseball team has a maximum of 11.7 scholarships, so players usually receive partial scholarships. {SNIP}

Read the whole piece...it's a pretty interesting presentation of a little-known sub-population of ballplayers.

But what's really enlightening to me is why there aren't, given the explanations above,  more successful walk-on candidates. I'll propose why.

SQUEEZING OUT ALL THE WIZARDRY
My godson, The Big Train", was an odd triple crown winner in high school, winning the San Francisco Unified school district's batting average, RBI and ERA leads in the same season. But San Francisco's program is not the most competitive, so while he got scouted by the Phils, they didn't draft him and he went to college on his academic, not his athletic achievements. After transferring around for a while, he had great success in a community college's baseball program and when he transferred into UC Berkeley, he tried out as a walk-on and got a slot pitching mop-up assignments. He performed well enough to have an ERA of 0.00 after a half-dozen appearances, but the athletes with  scholarships needed to get their full chances for all the usual political reasons. The Big Train got few chances, and his first sub-normal performance was his last appearance.

Management had already decided what his potential was, I believe, when they didn't offer him a scholarship, and regardless of what he had shown, he wasn't going to get recognition or coaching attention that could be applied to the talent with scholarships. Not a sinister conspiracy, a merely lazy decision based on the general tendency of those scouted as the best turn out to be the best, in general. In exchange for saving a lot of time practicing OMA, you occasionally miss out on someone's serious or major contribution (the exception, not the rule).

I believe The Quatermous Protocol that probably lowered the ceiling on what The Big Train could have achieved exists to some degree in the Majors. Some of my favorite gearheads will be quick to point out that the correlation between how early a round a player was drafted and that player's ultimate major league career is awfully good, with the earlier picks being more likely to achieve more success.

But, and I believe this is true both in Baseball and Beyond, we can't be sure which is cause and which is effect. Earlier draft picks are more likely to get coaching attention, more likely to be stuck with through bad performance or adverse medical events. Because of the Quatermous Protocol, there is more on-going investment in the individuals pre-determined to be winners.

Even the most effective recruiting shops can be undermined if they under-invest in their walk ons. There are too many Ryan Howards out there, missed not because they weren't talented enough, but because some busy supervisor decided prematurely they knew as much as they needed to know about a talent to stop paying close attention. Except for Boeing, Microsoft and the US Army, I never worked for an organization that could afford the lost opportunities the Quartermous Protocol creates.

You...odds are you can't afford to let skipping a little daily OMA time stand between you and getting the most out of your staff.