Wednesday, November 18, 2009
One of the most chronic American business and military management failures arises from success.
In competitive environments, successful organisations find it more seductive to stand pat rather than maintain the effort to find improvements. I've written about this effect before, but I just ran into the exhilarating Baseball example that reminds us that Baseball, unlike business, makes this error less because Baseball is innately smarter than American business and the American military.
The failure I'm talking about is the failure to remember that Whatever Doesn't Make You Stronger Kills You.
OISK v. RISK
I'm working on a piece of writing for a SABR project, and I had the good fortune to speak this month with Carl Erskine, a starting pitcher for the Brooklyn & Los Angeles Dodgers (1948 - 59) about one of his teammates. His teammate, Jim Gilliam, had been brought up in 1953 and been given a starting slot over other candidates with clearer statistical advantages. I was looking to find out if Erskine knew the Dodger front office's reasoning.
What aroused my curiosity was hearing this week that an ex-client (professional services sector, I'll call them 2SmartCo) had chosen to go gently into that good night rather than try to gut it out through the ongoing U.S. economic struggles. One of the reasons 2SmartCo is an ex-client is they had a great service ethic but a billing and collections model that was gratuitously client-unfriendly. In the general panorama of their swell client relations, it stood out like Mount Fuji, rendering it a painorama. I'll get back to them later.
The 1952 Dodgers had won 96 games, taking the National League flag by a comfortable 4-1/2 game margin. Their most obvious strength was their infield, with middle-of-the-line-up slick-fielding first baseman Gil Hodges, perennial all-star second baseman Jackie Robinson, star shortstop Pee Wee Reese, and recognized as slickest-fielding 3rd baseman in the league Billy Cox at the hot corner. Hodges had had his best season yet, Robinson a high-end one that was among his best, Reese had lost a step but was still a great asset, and Cox had produced a typical season at the plate. They'd lost the World Series to the Yankees again, but personnel-tweaking wasn't going to solve that barrier. A great performance most organizations outside of baseball would look to repeat.
So during the winter following the 1952 season, the Dodgers decided to fix what wasn't broke, and do a radical makeover of their infield for the 1953 campaign. They moved Robinson and his sore knees to 3rd base, put rookie Gilliam (0 previous games in the majors, though he had been playing pro ball in the minors and the Negro Leagues for seven seasons) at second, and bench Billy Cox.
At the time, Erskine was, he told me, amazed. "Why tinker with that team, I thought? It was so good," he said. He mentioned that manager Charlie Dressen was a risk-taker and sometimes, in his opinion (and in the separate but identical opinion of Hall of Fame manager Dick Williams who was also on that team) an over-manager at times. But this seemed bold, even for Dressen.
Dressen and GM Branch Rickey, rather than admiring the glass 90% full examined the remaining 10% to see what they could do to fill it up some more. They were focused on two factors they were lacking for: a lead-off hitter who got on base and could run, and a left-handed hitter.
Their regulars leading off in 1952 had been below acceptable...like my client's billing and collections process, not enough to change the outcome in an otherwise excellent season, but ugly. Here's the production for Dodger regulars batting lead-off.
The second factor was they wanted another left-handed bat. The team’s everyday 1952 line-up featured only one left-handed hitter, center fielder Duke Snider. They had solid left-handed fourth outfielders (Tommy Holmes, George Shuba and Cal Abrams), and back-up catcher Rube Walker batted from the port side. But Dressen and the front office knew the line-up would feature eight or seven right-handed batters, and they’d measured the results of that in ‘52. While the rest of the 1952 National League’s batters saw left-handed pitching 27% of their plate appearances, the starboard-heavy Dodgers only saw lefties 16% of their PAs, and that undermined most of their right-handed hitters.
So Gilliam looked like a risk worth taking, a possible lead-off batter who as a switch-hitter could bat left-handed against right-handed pitchers.
In retrospect, the move panned out brilliantly. The 1953 Dodgers went 103-49 (.682, 7 wins better than 2009's excellent Yankee squad), and likely one of the five or ten best National league teams of the 20th Century.
Gilliam himself did about everything an optimist could have planned for: .383 on-base, 31 doubles and 17 triples, 100 walks and only 38 strikeouts, resulting in 125 runs scored and a strong first place finish as Rookie of the Year. Bigger, he blew out of the chute by leading off and getting on base in every one of the team's first 24 games, with a .456 on-base average.
And Cox, the apparent odd-man out, ended up getting 371 plate appearances, and had the best offensive stats of his career.
The Dodgers, like most baseball organizations, understand that whatever doesn't make you stronger kills you, and then ACT on that knowledge.
Back to my ex-client. So I had been called into examine why some satisfaction scores were not at the highest approval rating (because they really did care), and found out the predominant reason was the set of client-unfriendly billing practices I mentioned.
When I presented the results, a couple of people in the management committee were upset that their satisfaction measures were failing their clients. A couple people were defensive. One of the defensive ones was the man who in a re-org had taken over responsibility finance and another department in addition to his own. He didn't have a vested interest in defending the status quo, but it appeared he didn't want to ruffle feathers in his temporarily-acquired department. I suspect he figured that when they got a new "real" manager, she or he would fix the problem. And overall, satisfaction measures were very good to excellent. So the other committee-members decided to stay the course rather than force change/stress on the interim, already-stretched manager.
Results and growth at 2SmartCo stayed steadily acceptable for three years after. But my inside sources told me a few weeks back that the billing/collections process had never changed and, in the tightening economy, had become more pronouncedly client-unfriendly (Angus' First Law of Organizations: All human systems tend to be self-amplifying). Challenged clients slowed payments, and some receivables owed by failing clients became uncollectible.
This dissolution was probably preventable. The decisions made three years ago were made for comfort, not performance. They're weren't as 2Smart as they thought they were; they weren't 2Smart 2Fail. They were hoping good enough was good enough.
It wasn't. Whatever doesn't make you stronger kills you.
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