Tuesday, September 30, 2003

Economists: Threat or Menace?  

The 9/29 issue of BusinessWeek features a column by Mark Hyman yclept Baseball's Playing Field Gets Even Less Level. Typical economist fluff, and quite a Sizzler lunchtime buffet of random tidbits. (I can't link you to it; BusinessWeek's site shows links, when you click on one, it tells you you can have free access but first you have to register, once you've registered, it tells you you have to be a subscriber. How 2001, eh?).

I won't even excerpt it (no point) but I will summarize his points paragraph by paragraph.

1) The Commissioner is happy with how competitive this season has been.

2) It wasn't the usual Selig hogwash; half the teams had a prayer with two weeks to go.

3) It's meant attendance is up, especially for the least-populated stadia (Florida +47%, KC +27%, Montr�al/San Juan +21%).

4 & 5) But the good feelings won't last because the dollar spread between highest- and lowest-payroll teams expanded, and 5 of the 8 lowest-payroll teams have actually cut payroll.

6) Fans and pundits didn't expect that in the wake of last year's labor deal with its luxury tax and revenue redistribution (Doug Pappas' short take here).

7) The taxing scheme hasn't affected the team it was most-targeted against (yes, the Yankees). But the big payroll Dodgers wouldn't make a big player move in the stretch though it might have gotten them into the playoffs.

8) While revenue-sharing is redistributing $265 MM, the poorer recipients aren't spending their way to the top; management says teams are investing in player development (true for some, like Milwaukee & Pittsburgh), an agent points out owners are pocketing the money (true for some, Tampa Bay & K.C.)

9) So if the revenue-sharing isn't responsible for the competitive parity, what is? Better player evaluation on the part of the Royals, Expos, Marlins & A's.

Conclusion slug) Don't count on this kind of competition next year.

The headline and conclusion don't match the content of the article (while I'm grumpy about BusinessWeek's foppish sniffy approach to registration, on the news side they usually are the class act of the business weeklies). There's a red plastic five-gallon bucket o' observations, some of them worthwhile, there are some numbers thrown in in an attempt to enhance credibility, and no essential understanding of process or the way real markets work outside academia. There's a focus on payroll size instead of success, a side-issue instead of a result (yes, while on average, payroll size is a somewhat positive indicator of wins, in any given case the richer may or may not win more games)...in short, a typical economist's waste of oxygen. Eighty-five percent of economists' work is a waste of oxygen.

Baseball's new taxing schemes have changed team behaviors. Some of those changes have led to short-term performance up-ticks. Some teams have made longer-term investments or are building reserves. Some are just pocketing the money and fattening ownership's bottom line.

Because there are only 30 organizations in baseball, and performance in baseball is measureable in wins & losses, non-baseball organizations have a lot of economic lessons to learn from it.

One example: Tax cuts. If you cut people's taxes in an economy most people view as "down", some will invest in ways that boost the economy, some will invest for the long-term and not boost the economy, and some people will just put the money in savings and not boost the economy a whit, an exact parallel to the behaviors above.

And no taxing system achieves the end goals right away because of Rigali's Law: The more money involved in an investment, the less decision weight comes from rationality and the more weight comes from emotion. Teams' behaviors changed this year, and next year, teams that didn't get what they wanted out of their attempts to adapt will change again, while those satisfied with their changes will probably change less. Some teams will find seams in the rules, some will be victimized by unforeseen consequences. That's reality, that's a stochastic system, and it doesn't gibe well with economists who are Communists or Free Marketeers, the binary-twin cults that refuse to recognize the stochastic trends in behavior and the benefits and limits of controls.

Sunday, September 28, 2003

The Cubs Strip-Mining the Good Feelings  

Yesterday afternoon, the Cubs won the second half of a doubleheader and put themselves into the playoffs. Congratulations, Chicago. And I'm psyched about it for the team, the manager, the front office, the neighborhood, and for the true fans.

I'm equivocally displeased for the media conglomerate that owns the Cubs, the Tribune Company (NYSE: TRB).

Not totally displeased for them. This year, they brought in a manager with a very successful track record (Dusty Baker), and they acquired extra weapons for their assault on the NL Central championship, both efforts costing them money they didn't truly need to spend to make more money. Why would not need to invest additional resources in personnel to make more money?

Because, unlike all but a few teams, the Cubs can bypass standard reality and make good income because of return on image. Their lovable-loser image is bankable. Chicago fans (both White Sox and Cubs) are the top of the line for loyalty, and near the top for sophistication. Cub fans' expectations are expectations of losing, so anything good (a Sammy Sosa chasing a home run record or crown, a fun young pitcher like Kerry Wood or Mark Prior) is good enough to sustain interest. While baseball economists have run numbers showing the general amount of revenue a team can expect to make for each incremental win per season, the Tribune Company's numbers don't work quite like anyone else's because the slab foundation of ticket- and souvenir buying doesn't sag as much when the team loses. And don't forget, they play in the best park for fans in the National League.

The Tribune Company could probably earn close to what they do now without trying to invest in quality, taking the pre-2003 Milwaukee Brewer strategy of making a few window-dressing moves in the off-season, keeping payroll down and collecting welfare in the form of luxury tax transfers (an arrangement meant to dampen salaries by having the Yankees and a few other teams pay a tax on salary pools above a certain ceiling to teams that spend the least; why it's a "good" idea is that poor teams get more money to spend on player salaries, making them competitive, but in reality, it's more frequent that the owners of the welfare recipients pocket the windfall as profit). So bravo to them for that willingness to invest incremental resources in quality that may not improve the bottom line of the financial statements.

Cheap Trick (Not the Band)

But the Tribune Company plays loose with ethics and with baseball's own regulations and the fans that have granted the team a 58-year hiatus in the World Series (a lot longer if you overlook 1945, which was a flukey war year which punished teams randomly at random levels, 1908 was their last true trip to the World Championship) with incredible, marked grace.

As if the practice of scalpers hogging too many tickets for big games and then gouging loyal fans who wish to see the big games wasn't already distasteful enough, the Tribune Company has set up a subsidiary to scalp ducats. This isn't a couple of frat-boys or drug-dealers with two-way radios...this is a New York Stock Exchange traded billion-dollar company (oh, same thing). They've tuned the whole model, almost revolutionizing the shake-down of the loyal fan the way Henry Ford revolutionized automobile manufacture.

My favorite baseball economist (and maven of the old national highway system's roadside attractions and diners) Doug Pappas wrote about this scam earlier this summer in a must-read article. The essence of it:

<snip>The Tribune Company also owns Wrigley Field. This month the New York Yankees play there for the first time since Lou Gehrig was their first baseman. Early this season, an outfit called "Wrigley Field Premium Ticket Services" was offering front-row field box tickets for the Yankees games, face value $45, for a mere $1,500. Bleacher seats, $30 from the box office, cost $155 from WFPTS.

WFPTS is located one block from Wrigley Field. Its offices are on land owned by the Tribune Company. Its President, Mark McGuire, is also a Vice President of the Cubs. Its books are handled by the Cubs' accounting department. Its only business is reselling Cubs tickets for more than their face value. WFPTS sells thousands of tickets which have never been offered for sale to the general public -- and if it can't sell all of its allotment, the Cubs will take them back. Yet a WFPTS spokesman insists, "We're not related to the Cubs ticket office."

Of course not.

The relationship between WFPTS and the Cubs will soon be tested in court. Illinois law requires the Cubs to sell their tickets at their stated face value. The Tribune Company thinks it can avoid this law by establishing WFPTS as a separate corporation, selling many of the club's most desirable tickets to this corporation at face value, then letting WFPTS resell them at scalpers' prices. all without ever offering these tickets to the general public. Several angry ticketholders disagree.<snip>

In reality, most or all of the tickets sold by WFPTS would otherwise have been sold at face value by the Cubs ticket office. Whether or not this practice is legal (a trial is scheduled for mid-August), it's a contemptible abuse of the club's best customers. Season ticketholders who for years had been given first shot at extra single-game seats were told that none were available for the most desirable series, the games against the Yankees, White Sox and Cardinals. Loyal fans who stood in line for hours, during a freezing Chicago winter, to buy tickets for these games as soon as they went on sale went home empty-handed.<snip>

Pappas got much of his information from whistle-blowing Chicago Sun-Times columnist Greg Couch who earlier this month blew the whistle again, this time on the way the Tribune Company was handling their scalping scheme for playoff tickets, seats for the "biggest" games of all. I recommend the entire article at the link in the previous sentence, but here's the essence:

But this entire surprising season has shared headlines with the Cubs' dirty greed. With a chance to give us our dream playoffs, what do the Cubs do?

Come up with a fresh, new ticket scam. Angry Cubs fans have been e-mailing me about it. Season-ticket holders had to pay up Wednesday for playoff tickets. One e-mailer said his tickets usually are $25 a game. The Cubs charged him $1,355 for his two seats for what could be 10 postseason games, including the World Series.

He was OK with the price hike but was upset by this line on the sheet the Cubs sent him: ''If the Cubs are eliminated from postseason contention before playoff tickets are mailed, we will automatically credit your payment to your 2004 season-ticket account.''

The Cubs will hold his money until January, when it's time to pay for next year's tickets? Why should the Cubs be the ones earning interest on his money? White Sox season-ticket holders were given the option of getting a refund. Do the math: The Cubs sold roughly 15,300 season tickets. If this e-mailer's $67.75 per postseason ticket is the average, then the Cubs basically will be sticking their most loyal fans for a $10.2million interest-free loan for four months. At the current prime rate, that would mean skimming nearly $140,000 in interest on money that's not theirs. <snip>

We never can trust the Cubs again and always must keep watch. A whole year of bad press over dirty ticket policies, and they do this anyway.

The Tribune's approach to strip-mining the team's image extends beyond the ticket scheme. They are playing with the goodwill built up in Wrigley Field, a crown jewel that makes the whole return on image model work for the Cubs' top and bottom lines. When Chicago's Department of Planning and Development tried to clarify the facility's landmark status, the Tribune Company make a noisy stink about that limiting their options to change their property and exaggerated the limitations in an attempt to be able to ignore the stewardship that landmark status requires. The Goose That Laid The Golden Egg.

The image that fuels return on image is not unlimited, even when it's drawing from a vast reservoir based on almost a century of tradition, as in the Cubs' case. The Cubs are somewhat inoculated against the tarnishing effects of such a cheap trick. But they're not totally immune. In Part II, I'll try to discuss the factors that managers need to know about return on image, why it works and where. And where and when it fails.

Friday, September 26, 2003

Prior Art:
The Person is Not the Job  

A frequent trap busy managers in big organizations fall into (even the most skilled ones) is forgetting that the person is not the job. What I mean by that is sometimes we forget that a person has a skill set that transcends their current job description, and when we need that skill, we can tap into it episodically (or permanently).

In a recent Baseball Prospectus team analysis of the Chicago Cubs, the anonymous author was teasing Cubbie manager Dusty Baker by pointing out he was overusing a couple of light-hitting outfielders.

Tony Womack .245 .260 .327 
Doug Glanville  .234 .260 .298
Mark Prior .243 .264 .343 

OK, the Cubs have had Prior all season, but they might consider
using him to pinch-hit whenever Womack or Glanville are due up.

Mark Prior, in case you don't know him, is an absolute bulldog of a pitcher, and, violating conventional baseball wisdom, he hits as well as below-average field players. He also violates a tenet of the unconventional baseball learning popular at places like Baseball Prospectus (and one that's generally true), which is a high pitch count (say, over 120 throws in a game) will undermine a starter's performance next time out. Prior consistently throws over 120 pitches, and while his arm may fall off someday, pitch-count mavens keep waiting for that moment and Prior keeps cooking up high cheese. He does have this elegant motion that may make him less prone to failure, or it may just take longer to catch up with him. But in this case, while the conventional baseball guys create a problem by allowing too many starters to throw too many pitches, the unconventional guys create a different management problem by failing to recognize that what is truth for the average of a sample may or may not be truth for any particular individual that is part of that sample (an important lesson outside of baseball as well).

Anyway, there are very few baseball managers who will use a pitcher as a pinch-hitter for a non-pitcher, no matter how anemic the non-pitcher's batting skills are. Why? Because pitchers don't do that; it's not in their job description, because we all know pitchers don't hit. In the 19th century, when the rules and equipment and the athleticism of players were all very different from contemporary baseball, some pitchers did hit (and some hitters pitched sometimes).

In the 1950s, the Dodgers had a couple of pitchers they sometimes used as pinch-hitters (though in my memory, more for other pitchers than fielders): Don Newcombe and Don Drysdale, but the systemic Dodger minor league instruction devised by Branch Rickey always included some hitting fundamentals for pitchers. Today, we have Brooks "The Robstown Rhino" Kieschnick, a Milwaukee Brewer who is a low-man in the bullpen and pinch-hitter (he was an outfielder who wasn't quite good enough to stick around on his glove or bat, and had a good enough arm that he could pitch a little). This year he's hitting .300/.355/.614 in 76 plate appearances, way better than the league and his own past performances. But the Brewers are desperate and nowhere near to playing in make-or-break games, so their manager can afford to indulge his creative urges without being second-guessed as much. No matter how much the incremental benefit of using a better hitter-who-happens-to-be-a-pitcher is, managers either hesitate to be that "smart", or, as I believe is actually the case, they forget about that potential offensive weapon because his job title says "Pitcher".

Squid Pro Quo

Our workplaces are rarely better. Managers are under pressure all the time to get more out of their resources, and with their own time-per-decision usually compressed, it's easier to think of Rodney as "mail clerk" rather than a cornucopia of diverse experiences and aptitudes that would make him a great loan to a sales research function or back-up customer service rep. Easier, but a lost opportunity.

I was lucky to shown the light on this in one of my first jobs out of college. During the days, I worked as a legislative researcher for a U.S. Senator's staff. They were a super smart, hyperactive team, but limited by their ability to get quick facts or custom analytic studies. Most Senate offices used the Congressional Research Service, a very deep and talented group that was burdened with the weight of such requests from every House and Senate office and committee. Requests would go in, and no matter how hard CRS' staff worked, you'd never know when you might get a response. So I acted as a mini-CRS, getting up to speed on an issue, doing computer-based searches, building quick briefing reports, finding skeletons in nominees' closets, running numbers and all that. I was very fast, very accurate, very flexible. I was lucky in that I had been given a job at which I was great. Not Barry Bonds great, because there were over 110 years of baseball tradition and expectations he's shredded. I was great more like Sliding Billy Hamilton great...I was very good but actually looked incredibly better than that because no one had ever done that set of things as effectively before.

Eventually, though, I was promoted up to working as a legislative aide, and my research services were shunted off to others. But the boss, Ray Calamaro, was a very creative manager, so when things would get gummed up, he would switch me off my duties to pinch-hit as a researcher. Just because I didn't have the title any more didn't mean I couldn't add value that way.

I had worked at least 20 different jobs by then, and this was the first time any manager had ever viewed me as an individual-with-aptitudes instead of a job title. His innovation was remembering and applying past jobs in the same organization, but once he turned me on to that idea, it was logical for me to extend it to application of more general experiences. The Calamaro Approach is a winner you should think about when you have more work to do than you have available expertise or experience to do.

TIP: Find out what arts and sciences and jobs and skills people know that's not in their job description. Keep track of it, apply it.. Use it to make your organization more effective. It'll make you look like a miracle worker.

Thursday, September 25, 2003

More With Less screed  

Earlier this week I wrote about the More With Less Cult (9/22) and at least one very involved & intelligent person didn't get the point I was trying to make. This means I wasn't clear enough. Sorry, Mr. Ely.

In an attempt to be clearer, let me try to boil down my experiences in this matter.

I believe good managers do not try to do "more with less."
They iteratively try to
    do more with the same resources
    the same with leaner resources.

So no one with field experience would, for example, try to create a single plan that produced 20% more SUVs on a line with 20% fewer employees, 20% less inspection time at 20% fewer rejects on the old quality specs. If that was the end goal, there would be four plans, attempting to achieve one objective each, one at a time (with the other goals in mind but not in execution simultaneously). The More With Less guy might achieve that by gutting the quality standards (the usual victim in one of these Cult events).

Each effort executes *one of those* things at a time, ratchets the efficiency, checks to see if quality is still sufficient.

If the Quality is sufficient
    Then try to
        do more with the same resources
        the same with leaner resources.
    back out change and try to do something different

Ultimately, scale is the enemy...for every economy of scale, there are two diseconomies of scale, that bigness leads to inefficiency which can only be held in check or reversed with ever greater effort as the org grows in size. And that incompetents find it easier to rise in the hierarchy while hiding their incompetence in a G.M. or DoD or Microsoft or KGB style organization than they can in a corner grocery store or three-person commercial leasing operation. And therefore, the ambitious incompetent are drawn to large organizations and repelled by small ones, as a general rule. In my practice, I have had to mud-wrestle with so many of these ambitious incompetent I have lost tolerance for them. And many of them are the "more with less" crowd, imagining you can just go straight there without dozens or hundreds of incremental steps. They believe that because they could not execute properly any of the individual steps, so they imagine if they just do the "vision thing" and skip the hand-dirtying everyday operational grind, it will just <poof> happen. Peter Pan Management, replete with frelling fairy dust.

Certain lines of endeavor draw more of these ambitious incompetent than others. Where measures aren't easy or can be fluffed with commonly-accepted accounting standards that hide more than they indicate, that's where the Peter Pan crowd is drawn, gravitationally. Any field where "I can't tell you what I like/quality-is, but I'll know it when I see it" is a prime candidate. Publishing (where "quality" is almost impossible to judge with metrics). Baseball historically has had its share of insider madness, but the onset of sabermetric and other alternative models is squeezing that in another direction. Consulting is pretty much unaccountable. On the other end there are organizations like the DoA's Soil Conservation Service or Oxfam and other health-to-third-world types or manufacturing, because the deliverables are very fungible and measureable. The ambitious-incometent tend to migrate, like wildebeest, away from naturally accountable endeavours, and towards naturally unaccountable ones.

Someday, we should talk about the Less With Less odyssey of the Milwaukee Brewers, which is slowly being re-directed by their newest General Manager, Doug Melvin. Later, though. Just wanted to get this clariifcation on-line.

Wednesday, September 24, 2003

Try This Technique -- #28
the Cleveland Indians'
Player Plan  

"Only a mediocre person is always
at his best" -- W. Somerset Maugham

Some management lessons from baseball are subtle. Sometimes though, they clang you over the head like they were Juan Marichal and you were John Roseboro.

Take employee evaluation. Managers are expected to do it, but not trained seriously in how to. Most hate it, leaving it until the last minute and throwing together whatever mental dust-bunnies are drifting by at the moments they're working on the eval form. It's one of those Tragedy of the Commons problems...the manager gets no credit from the organization for doing it, but the sloppy execution of it (or skipping of it entirely) savages the prospects of the organization that doesn't reward the manager for doing the job right.

You're still not sold. "So what," you say, right?

Think about this a second. In this era, with most organizations (that aren't Iraq-reconstruction contractors) struggling for every bit of margin they can grab onto, the expense of hiring and the expense of carrying non-productive employees hasn't been higher. That means employee evaluation (assigning work to and promoting the capable, purging/finding new work for the incapable) is more important now than ever. But in in a small sample study (my clients plus those of some other consultants I know), employee evaluations are coming less frequently now than three years ago (when it was already less frequent than it should have been. Less analysis, less actionable feedback, less probability of improvement.

Baseball teams routinely have it much harder. For them, it's always high turnover time. Their methods are instructive to what yours should be. Baseball organizations dump over half their recruits for failing to cut the mustard, so they have more flexibility in recruiting and retaining than most organizations do (because most can't free up enough resources to hire way more than they need and experiment with them to find out who's working out and who isn't).

If you're not evaluating at least as well as a baseball team, you're simply not evaluating well enough. Take the Cleveland Indians organization as a milestone of sensible practices. As recently described in an engaging and beautifully-written and edited series in the Cleveland Plain Dealer, the Tribe uses something called a Player Plan to track each employee's limitations and then help each employee overcome limitations - physically, fundamentally and mentally.

The essence:

(Brandon) Phillips, one of the prized young players the Indians received when they traded pitching ace Bartolo Colon to the Montreal Expos in 2002, didn't realize the Indians had a plan for him. They call it the Player Plan, and they use it in their minor leagues as a detailed road map for improvement.

Coaches and instructors collaborate to determine what a player needs to do to fix his problems - or, as the Indians like to call them, "limitations." Then they map out how to help him do it - physically, fundamentally and mentally. This systematic approach is a reflection of the Tribe's overall strategy to rebuild its franchise by using basic business practices to get maximum results.

At the heart of this strategy, driven by 36-year-old Indians General Manager Mark Shapiro, is the desire to create precise, efficient and measurable systems to evaluate a player's skills and then improve them. The goal is to cut down on mistakes that can cost the Tribe progress and money. This emphasis on business is being seen more and more in baseball as owners pinch payrolls and hire non-traditional general managers like Shapiro, who have Ivy League educations but no playing or coaching experience.

Of all the departments in the Indians' organization, player development and scouting present perhaps the biggest challenge in applying Shapiro's strategy because of the subjectivity involved. Scouting, the process of identifying talented young players and projecting their future success, relies heavily on judgment and "gut" instinct, two factors impossible to quantify on a computer - a favorite tool of Indians management. Player development, a rigorous learning process that takes years, can be affected as much by a player's mental state as by his talent.


Shapiro saw good intentions and hard work by coaches and scouts with the team, but he didn't see an organized system that efficiently measured the development of the Tribe's young players. "It was rhetoric-based," Shapiro said of the player development and scouting systems he observed. "Smart baseball men who didn't have that systematic approach to it. They were saying, He's pretty good, but he can't throw strikes.' Well, why can't he throw strikes?"

Shapiro wanted not only answers to such questions, but a detailed approach to assess a player's "limitations" and a road map to improve them. (Calling them "weaknesses" is considered too negative.) The idea, he said, was to act more like "a cutting-edge business" than a typical baseball team. "The old baseball mentality and one that still is employed in some places is throw the bats and balls out on the field and the cream will rise to the top," Shapiro said. "And I will tell you, that still will happen: The cream will always rise to the top. The issue is to factor in business. If the cream rises to the top and that's an 8 percent success rate, what happens if you utilize these methods and you can develop a 13 percent success rate?"

While Shapiro alleges it's baseball's model to just throw out the bats and balls on the field, I'll bet the organization you work in is les cutting-edge than Shapiro's when it comes to monitoring employee performance, planning for improvement and delivering needed training.

And thanks to Baseball Primer for the link to the Plain-Dealer story.

TIP: Try the Cleveland Indians approach. Have a serious, actionable plan for each employee, monitor and measure each employee's performance, try to intelligently eliminate all limitations that affect your organization's performance.

Monday, September 22, 2003

The Most Dangerous
Management Cult  

The fact that a believer is happier than a skeptic is no more to the point
than the fact that a drunken man is happier than a sober one -- G.B. Shaw

American management has been in the thrall of an incredibly dangerous and brain-damaged cult since George Bush Junior's father was President. As with any cult, if management just examined the logic of it against known reality, the gauze would be drawn from their eyes, their bodies turned around to face the front of the cave, the fantasy spell broken.

If they just looked at baseball, they'd know it was hot air.

The cult is the "More With Less" fad, the faith that an organization can achieve net gains in work output while downsizing staff or investment or R&D. The "more-with-less" cult has run its intellectual course. A decade ago, you heard this dementia all the time; now, while organizations are behaving the same way (laying off staff or slashing investments while pretending growth can happen), outside of a small handful of delusional amateurs, the chanters know they're just mouthing an empty platitude.

Operationaly, real managers are always looking to either (a) do more with the same, and (b) the same for less, iteratively, incrementally, one step at a time. A real manager never would try to do more with less; if you hear somebody saying that, he either has tertiary syphilis, or knows nothing about managing either people or process or technology. If you are working for an organization with executive management that says this and actually believes it, get out before the whole thing implodes. Only in Communist Chinese prison labor camps and in for-profits that are monopolies is "more-with-less" a net-gain strategy.

Real managers have known this intuitively. Thanks to Megan Santosus, a columnist for CIO magazine, they have hard numbers. Santosus wrote in her most recent Reality Bytes column, "Why More Is Less: Recent evidence shows that multitasking is an enormous waste of your time and your company's money" about research studies that are proving the multi-tasking that ensues from serial killing of staff slots is a terrible drag on effectiveness and even productivity. I won't re-has the article. Read the darned thing. If you are in an organization where executive management chanted "more with less", print it copy it and put it up in every public intersection.

The muti-tasking goes beyond the operational planning limits. It flies in the face of what has been known to be state-of-the-art people management, too. Since the mid-80s, when the book Peopleware by Lister and DeMarco popularized effective management of development teams, even desultory followers of effective practices have known if you interrupt someone who's working in a "zone", it takes an average of 20 minutes for them to return to a productive pace. Load multiple roles on a person, make them cover them in the same day, it's a test lab for creating structural dementia. It strip-mines the victoms while undermining the quantity and quality of work done for the organization.

So how does baseball fit in?

Because baseball is the perfect simple lab to test hypotheses of methods for success, in this case, the possibility of doing "more with less". If you can't do more with less in baseball, you'd better have a robust explanation about why it works outside.

What team believes it can replace an all-star with a scrub and garner more wins? None. "Moneyball" has made the Oakland A's stingy ways widely-known, but their GM, Billy Beane, isn't trying to do more with less. He's trying the classic real manager strategy I mentioned earlier: to do the same with less.

Could the Red Sox dump Nomar Garciaparra in exchange for Enrique Wilsonand expect to win more games with less talent? I don't think anyone who manages a baseball roster believes that for a second. They might try to cobble together other talent with the salary savings they gained in the trade, but that'd be trying to do the same with the same. They might try to work on fundamentals and advance scouting to get additional value from the diminished portfolio that had, but that'd be the Beane (the same with less) approach. Marketing departments of major league teams or their minions, the broadcasters, might try to tell you a stripped-down home team was on the verge of turning it around, but no serious baseball manager believes this.

"More With Less" is a laughable cult. Using baseball as a yardstick makes the obviousness of that inescapable.

Saturday, September 20, 2003

When a Hard-Working H.R. Dept.
Devastates Your Organization  

H.R. departments in big organizations are a lot like Bud Selig, MLB's worstwhile Commissioner and owner of its least successful franchise over the last decade. Under pressure, they jump on to an apparently logical idea and ride it into the ground, past any useful purpose.

Selig, if you can believe columnist Ken Rosenthal of The Sporting News, has been jawboning teams not to offer players arbitration (if you don't know what that process is, send me e-mail and I'll post an explanation here). These instructions come from the authority figure, so many teams reduce the number of their players to whom they offer arbitration.

But what's the result? The "good for owners" result is apparently lowered labor costs, and more players end up in the free agent pool. Higher supply of free agent talent relative to pre-existing demand. But what happens to the team that didn't offer arbitration? They are short an experienced player. They can replace the player with someone inexperienced (promote from the minors or a bench role), trade prospects away in favor of an experienced player, or dip into the free agent market. Ergo, higher demand for free agent talent, partially negating the "good for owners" effects.

Baseball ownership is a very primitive, so it'd not surprising they're taking something sort of like a cargo cult approach, Management By Wishful Thinking (MBWT). By not offering arbitration, they effectively release a guy they then need to replace. The guy they release is less likely to sign with the team, meaning they're going to have a new employee who needs to be trained in the ways of a new organization, his teammates need to get to know him and his playing patterns. The dollars saved are mostly or completely neutralized by the cost of integration.

This kind of overhead creation enervates many big organizations with hard-working human relations departments. In the private sector especially, as businesses, non-profits and the increasing pool of underemployed and unemployed struggle to eke out a marginal existence in The Permafrost Economy, they have to look for sources of income outside their normal sale of products or services or development acitivities.One source of income still available is suing a "deep pocket" (although Congress is trying to lop off this opportunity, too). This puts pressure on H.R. groups because the odds of a big organization being sued go up.

So big organization H.R. groups start focusing on overhead activities, things like litigation-prevention, rather than their rightful rôle as a group that optimizes the hiring process and makes existing staff more effective. This, of course, keeps the Permafrost Economy frostier, employment more shaky, employee-consumers less aggressive, purchasing managers more cautious. The more pressure there is on margins, the more money they spend on fear-evasion overhead.

H.R. leaders go to seminars hosted by organizations that benefit from this fear-setting, outfits like consultants and law firms and insurance companies. So H.R. groups accelerate the overhead, spending money on how to spend money that's guaranteed to not make money. They come back from the seminars, and justify the time and effort spent at them by deploying the fear right in their own organizations.

This off-season, watch to see which players your favored teams don't offer arbitration to. In general, there'll be high-paid failures, and that makes sense. But you'll see a lot of quality mid-priced talent getting purged and then replaced with other mid-priced talent.

It won't make a team better or lower labor costs, except by random chance, but it makes ownership feel like they're coping with a crisis.

Do you have one of these H.R cargo cult things going on in your organization? If you do, tell me about it...I'm collecting great cargo cult examples.

Friday, September 19, 2003

Silly Manager Trick #23
The Frank Robinson Rule  

Coaching is one of the cardinal virtues of managing: the ability to make long-term, enduring performance enhancements (without andro) in the staff who work for/with you.

Remember this: Just because it's easy for you doesn't mean it's easy.

In non-baseball coaching, it’s important to remember what I call The Frank Robinson Rule: if you’re really good at something, whether you got there by the luck of birth or the application of hard work and practice, don’t expect other people to achieve what you have.

Frank Robinson was one of the finest players ever to make the majors. He won a Rookie of the Year award (1956, for Cincinnati), Most Valuable Player awards in both leagues (Cincinnati in 1961, Baltimore in 1966). In 1966, he also won the MVP of the World Series and won a Triple Crown (lead the league in batting average and homers and RBIs), too. He won a Gold Glove in 1958.

In short, he was an all-around player, who got to big games and did well in them in a lot of different situations. He was born with great talents, and worked very hard to sharpen them.

He was, until 2002, when he took over the Montréal Expos, a poor manager. Rico Carty played for Robinson in Cleveland in 1975 and 1976, and was one of the better players on the team. He once told me that Robinson was really tough in his expectations of players. Robby was a five-tool all-star who found it hard to believe that if his players weren’t as good as he had been, they just weren’t trying hard enough.

This is actually typical in non-baseball managers who have a strong history of accomplishment, and their normal pattern is to see each fresh face as a savior, only to be disappointed (and even sometimes turning on them) when they discover the youngster can’t do everything they themselves can do.

If you have this Frank Robinson pattern, it increases your ability to find the flaws in your team players’ game, but it brutally limits what you can and will do to help your organization help the player make a dent in the limits. Your roster, like most major league rosters, will usually have a few five-tool players as well as scrubs as well as role-players who excel at one or two of the many things they need to do.

It may be age or special learning experiences or just the fact that the Expos have such an eviscerated roster, but Robinson inherited the them in 2002 and was successful with them both in that year and the next. Were his expectations so low that he had to overcome his natural tendency, or has he grown as a person and manager? I’d like to think it’s the latter.

Tuesday, September 16, 2003

Mastering Change Using
Giants Attitude: I & II  

p>The San Francisco Giants have been a remarkably successful franchise, making more different kinds of radical transitions over the last decade than any other team. They've moved from one of the worst, most homogenously life-threatening places to play baseball (I once saw Willie McCovey almost drown in a puddle by first base) to a modern mallpark with quirky park conditions and fences. They bucked the Bud Zelig Welfare Queen Gravy Train, and spent an unusual amount of their own money to achieve that. They changed ownership. They traded away their most loved star. They acquired the best position player in the game, and one of the most expensive, forcing them to cobble together complements everywhere else on a very tight budget. Most teams with a superstar and a host of solid, unexceptional players have a hard time being very competitive, but the Giants have won three division titles and been in a World Series during the decade 1993-2002 with that recipe. This season, again, they've had to aggressively purge and acquire to try to build a winner around this formula.

As of today, they are looking to win their division again (91-57 .615, and 11 games ahead of the second place Dodgers).

Giants attitude stretches from the owners to the field, but Jonah Keri's fine Baseball Prospectus two-part interview with their assistant general manager Ned Colletti shows how Giants attitude operates in the front office with ideas you can apply to your management outside baseball. I recommend both parts if you have time (there's a link to Part I from the Part II I linked to). There are many chunky bits 'o wisdom in the way the Giants manage, but here are two.

I. Never Cope With Change By Using Fear As a Filter

Colletti explains in the interview how the team acquired at the "trade deadline" (a somewhat permeable barrier that's more a psychological limit for players and fans) yet another tough young-veteran starting pitcher for the stretch. This year it was Sir Sidney Ponson from the Orioles, but this is something the regime does most recent years. At the deadline, the situation is very fluid. Contending teams are trying to acquire all kinds of players and acquiring teams have to compete with each other. The environment changes several times a minute, and a deal going down can create a domino effect as panic drives front offices to try to close a deal or they shut down emotionally and freeze up without making a deal they need to.

The Giants were able to get Ponson, a young-vet but they had to give up a very promising rookie, Kurt Ainsworth, to close the deal. Here's part of the exchange between Keri and Colletti:

BP: You mentioned the Ponson deal. We've heard that there were several teams talking to the Orioles about Ponson, that there was talk of Javier Vazquez and a couple of other pitchers clouding the picture for a while. How were you able to get the deal done in the end? What made you decide to part with Ainsworth especially, and also Moss and Hannaman, while hanging onto other young pitchers like Foppert and Williams?

Colletti: It was one of toughest trades we've made. You talk about Kurt, but without any one of those pitchers, Baltimore wouldn't have done the deal. They weren't going to move Ponson without acquiring who they wanted. I talked to Kurt five days after the deal, and I told him it wasn't what he hadn't done that got him traded, it was what he had done that attracted Baltimore. From our perspective, with him being injured, we weren't sure if he'd be able to pitch the rest of season in a pennant situation. We've been around long enough to know that opportunities to win can be fleeting. So whenever we have an opportunity to win at the time of the trading deadline, we go for it. We're not afraid--you can't be afraid to make a mistake. You can't be afraid to trade a certain player if your scouts are sure about players you're acquiring.

That last statement is the key to facing a change decision. If you have scouting (some solid, if speculative, knowledge), you can't afford to let fear be a key part of the decision. Too many organizations try to advance on the future with the risks and fears being the dominant ingredients in the decision. The Giants don't, and that makes them winners. When you decide from fear or the risk side, you end up taking more time than you can afford....it pushes you too close to deadlines or crashes them. I believe about a half of all the time overruns on projects and initiatives are caused primarily by the effects of using fear as a primary filter in decisions. Organizations need some naturally fearful people in the right slots, but they have to be the right slots. NASA, for example, would have greatly benefited if fear-driven individuals had had decisionmaking power in either of the Space Shuttle explosions when NASA had placed more business-oriented decisionmakers at the helm. But widespread placement of those who view change's risks as being greater than change's potential rewards need to be shunted aside in any organization that is not a monopoly but wishes to succeed.

II. Don't Micromanage Those on Who Your Success Depends

The front office turned over field management to Felipe Alou this year. There were tons of applicants both because the Giants are chronically competitive, but also because a team constructed the way the Giants are (a superstar and cobbled pieces) is an exciting challenge to manage. There are fewer automatic, obvious moves to make, and you have to make use of the whole roster. Exciting work in a competitive organization. Cool.

But think how many of those kinds of positions you see people beat their brains out to get, only to be micromanaged by executives up the chain. There are several reasons for this outside of baseball. One is the fear I addressed in the first part -- some people can't yield control out of anxiety. Another is the extreme asymmetry of executive pay in most American organizations gives executives either the sense they have to do it all or a Napoleon Complex where they feel they must really be worth all the pelf they're collecting. Another is that sometimes the person micromanaging held that position before and feels she knows best how to do it. Yet another is the micromamager has a dull job himself and sees how fun this group of tasks is, what my father used to call "peeing in the orange juice".

I've worked as both a consultant and victim with higher managers and executives who micromanage for all these reasons. The most laughable, head-banging one was a Harvard Business School grad with the personality and aptitude set of an assistant bookkeeper who was named president of a networking company I was directing a big chunk of the marketing functions for. He inserted himself into every creative decision, not in an advisory role, but as a brick wall. He didn't know jack cheese about our customers (he'd never worked technical support or customer service), about the scientific parts of marketing, about the rules of positioning or advertising or market research. But, darn it, he was the president and he was going to monkey with these decisions he considered fun and foolishly considered easy.

The Giants front office doesn't micromanage Alou.

Colletti: We have great conversations with Felipe. He's seen so many different things in the game. Even when we have a short conversation to say hello, you can learn so much. There's really no 'play this guy', 'or hit this guy' going on though. Once in a while, if we want to make a suggestion, we might say something like, 'what would you think about...'? But there are no mandates. We trust the manager to do his job. It goes back to Brian's style: he delegates and he doesn't micromanage other people's positions.

The Giants are having one of their best years for winning games. Alou's having his best year as a manager, whether because he's never been better, or because he's staying out of his players' way. It barely matters why.

A) The Giants don't micromanage the talent they hire to make decisions.
B) The Giants are the 90th percentile on team winning record.

'Nuff said.

Sunday, September 14, 2003

Setting up Your Employees...And Yourself
for Failure  

When a project, or even just a key task, is on the line, it's important for any manager who wants to be at least mediocre to remember loyalty to someone's ego, even an important person's, comes in second to the project. Always. A manager who can't do that will never be good as long as he blows that choice.

In baseball, the way the game keeps statistics makes it easier to make the right choices. In baseball, the televised spotlight makes the failure to do it more public.

In today's (September 14) game between the Mariners and the Angels in Seattle, a textbook example of one of those spotlit decisions came and the manager, apparently, made a choice to protect an ego rather than add to his team's chances of winning. It was as vital a game as one could have played; the Mariners were a ½ game away from the wildcard lead...the chance to make it into the playoffs. It's late in the season, there aren't many games left and any game you can win you should be driving hard to capture. This is even more true because the M's have been stuttering offensively for weeks -- they are just not a very dangerous team at the moment.

The M's went into the bottom of the ninth behind one run and the Angels' Balrog of a reliever, Troy Percival on the mound to finish the game. Percival's very very tough on everyone, but especially the Ms. He throws as hard as anyone in the league and squints quizzically at the catcher, sending the hitter the message that his vision is impaired, making standing in against him about as scary as it gets.

The Mariners catch a little break, though. The inning starts like this:

-E Martinez walked.
-C Meyers ran for E Martinez.
-J Olerud struck out swinging, C Meyers stole second, C Meyers to third on throwing error by catcher T Gregorio.

The net batter due up is Mike Cameron, the team's gifted starting centerfielder. Cameron has been struggling lately (2-for-18 in the last week, 5-for-37 this month). The good news is he hit a homer in the 2nd inning against the Angels' young starter. But now the game is on the line. As the home team, the Ms only need to score one single run to send the game into extra innings. The best hope for that run is a speedy runner on 3rd base with just one out -- a hit will score him easily, but a decent fly ball will give him an opportunity to tag up and score, too, and all three of the Angels' outfielders in the game have sub-par throwing guns. The team needs a fly ball. So should the manager allow Cameron to hit?

A manager should at that point analyze past performance. Easier to do in baseball than most organizations because baseball keeps better records than most do. Here's what was available to the Mariners' manager as the inning started:

  Troy Percival pitching vs. Seattle Mariners
Opposing hitter AB H 2B 3B HR RBI BB SO BA OBP SLG OPS
Mike Cameron 9 0 0 0 0 0 0 7 .000 .000 .000 .000

Not so hot. In 9 at-bats, Cameron has no hits and has struck out 7 times. An easy out so far. Nine at bats is not a deep sample. With the game not on the line or in an exhibition contest, you'd let Cameron look at Percival. Cameron is also the Strikeout Guy, with 125 Ks so far in the season, so facing Percival is not something Cameron's has any hope for doing well at.

There aren't many bench options either. Some minor league guys and Mark McLemore. McLemore has had a very poor season. Over the last week, he's been 3-for-12 but walked three times, too, for a .400 on-base percentage, and for this at bat, the best thing is a hit or flyball, the next best is just getting on safely. McLemore, like Cameron, though, is hitless in his 9 at-bats against Percival. But he's struck out just once, meaning he's put 8 balls into play.

This is an easy management call in this situation. Choose the guy who gets on base more in general, and who puts the ball into play more often apparently. Nine at bats is not significant, but the divergence is so large between Cameron's and McLemore's abilities at that, you have to try. Cameron looks like God's Perfect Percival Bait. The Mariners' manager leaves Cameron in. Game over.

-M Cameron struck out looking.
-R Winn popped out to shortstop.
0 runs, 0 hits, 1 error
Anaheim 2, Seattle 1

The traditional baseball excuse for this would be "Cameron's the guy that got you this far, and he's your starter. You'd humiliate him if you took him out with the game on the line". Reality suggests Cameron's ego wasn't boosted by his failure against Percival, a failure he'll likely remember and stack up on his pile of past failures against the fireballer. It's psychologically less likely Cameron will succeed next time against Percival. It didn't help the team, either.

Outside of baseball, managerial passivity that allows a team member to crash and burn in a situation that management knew, or should have known, was one where the member's weaknesses were grossly exposed, is incomptence. Making sure you don't allow this to happen is not very difficult if you're paying attention and you observe, monitor and analyze your team's strengths and weaknesses.

Friday, September 12, 2003

Project Management Lesson from Baseball:
Late Season Call-ups  

The Majors have a management technique that non-baseball organizations with would do well to (sometimes) emulate: Late season call-ups.

Like most organizations, major league teams have players not quite ready for prime time but whom they want to hold onto because their potential value is fairly high or just because they're unproven but very cheap. In baseball, this is institutionalized; the big team carries a roster of 25, but they maintain a conceptual 40-man roster, with the extras being key players in their minor league system they have reserved (locked up so other teams can't snare them easily).

From September 1, the rules allow teams to expand their 25-man roster. Through the end of the season the entire 40-man roster is eligible to play for at the Major League level, so most teams bring up the second-line talent to give the young pups some chances to play (they get high-level experience, the team gets to do a little evaluation) and to give the big team a little added flexibility (pinch runners, defensive replacements, platooning for guys who only hit right-handed pitching, et.al.).

The teams that get the most use out of this are teams that had fairly high hopes at the beginning of the season but none any more, like the Texas Rangers and New York Mets. Teams that can get a little out of this are this year's Atlanta Braves, who have a virtual lock on the playoffs and can play for exercise more than having the absolute need to win every game. Teams like this year's Tigers already have this contingent playing all the time -- it's a rare 2003 Tiger that's old enough to get into a movie rated PG without a parent, so the additional value of late-season call-ups is limited to the Bengals. Teams like this year's Chicago White Sox, locked in a life-and-death struggle for a playoff spot after a goodly time away from playoff competition, might get a little added oomph from pinch-running flexibility, but they aren't going to bench proven major leaguers to test out unproven toddlers (even if there are a couple guys for whom they should consider it). The CYA factor is just too intense to risk it.

Heavy Metal Training

Organizations beyond baseball should think about the September Call-Up Strategy on projects that are in the home stretch in which the quality of the outcome is basically close to determined, and unlikely at this point to be significantly changed. Too often I've had clients with an absolute black-hole of a project that's 80% done pretending if they just beat their brains out and drive the talent harder they can pull it out. That's close to impossible to deliver on. If you used the September Call-Up Strategy, you'd integrate the young, less-experienced, less-expensive talent into the project. Let them participate in the de-briefings, the routine, quotidian experiences. And let them get mentored and see what happens when projects went wrong (and why). It's a very very cheap (and easy) way to build up institutional memory.

The other side (unusually successful projects) is also a good way to start to integrate young potential talent, and for a parallel reason -- to try to better understand why things went right. Many projects go right when the project management staff can't exactly put their finger on "why" this particular project succeeded and not others. Frankly, there is an element of luck in successful projects. But that doesn't undermine the value of prepping your less-experienced staff with lessons in the trenches.

I'm not saying you should pimp your failing projects -- you always want to do the best you can given the circumstances -- what I'm telling you is sometimes the small loss of quality on an already-failed project is tiny compared to the repeated benefits the minor-league talent gets out of the experiences and that you get out of building up institutional memory on the cheap.

TIP: Take a lesson from baseball and consider using late-cycle projects with determined outcomes (bad and good) as September Call-Up opportunities for less-experienced staffers. Your risk will just about never be lower, and the chances for high returns will just about never be higher.

Thursday, September 11, 2003

"Branding" is Swinging at Bad Pitches.
Controlling the Strike Zone is Positioning  

"Hitters who force pitchers to stay in the strike zone are productive, and
pitchers who take hitters out of the strike zone dominate" -- Billy Beane, G.M., Oakland As


Thanks to Peter Gammons' ESPN column from 9/8, we harvested some interesting observations about optimizing chances for strategic success. In baseball, it's controlling the strike zone, and that contains some powerful advice for non-baseball organizations. DePodesta-ism, the view of the A's resident sabermetrician elaborated in Michael Lewis' Moneyball, argues that on-base percentage is the key statistic and the way to achieve high OBA is to get additional walks and work pitchers deep into the count. This means a hitter (and a pitcher) need to control the strike zone to optimize the probability of success.

Detail from the Gammons column:

"Hitting is being taught today, better than ever before," Baird said. "Watch the approaches many hitters take today. They're taught to go deep in the count, to get the pitch they can handle, and more and more hitters have learned to not be afraid to hit with two out. The game is so much more aware of on-base percentage than years ago, it isn't funny. Look how well so many hitters can take the ball out over the plate and put it in play hard. Hitters now have video, they are schooled in pitch recognition and visual training, they are bigger and stronger and able to manipulate the bat better than ever. The bats are better, lighter, better-balanced, specifically made for individual hitters."

While the league on-base percentages don't show any real difference from 1989 to 1995 to 2003, it is clear to anyone who watches games that, as Beane says, "baseball has realized that one of the reasons Ted Williams was regarded as the greatest hitter of his time is that he realized all this. What we see today is the Williams-ization of baseball, and that's going to make a lot of good pitchers look mediocre.

"The game is all about control of the 17-inch triangle," Beane said. "Hitters and pitchers. A couple of years ago we broke down every pitch in our games, and we found that Jason Giambi and Edgar Martinez really only hit in half the strike area, never outside it. The great pitchers like Pedro Martinez and Tim Hudson dominate in the strike zone because they throw in it consistently early in counts, but they get hitters out out of the strike zone. Hitters who force pitchers to stay in the strike zone are productive, and pitchers who take hitters out of the strike zone dominate."

Just as this core baseball strategy leads to higher success probability, when you apply it in non-baseball organizations, especially businesses, it give you great davantages over competitors who don't follow it.

In baseball, the popular theory of hitting has been "See the Ball, Hit the Ball". This argues if you have a good view of the pitch and good eye-hand coordination, you can hit any hittable pitch. The business equivalent of that is the "Branding" cult. Branding argues that once you've established a brand and people know it and trust it (or even just know it), you extend it to new products and fields and it gives you momentum. It argues that you should swing at any hittable pitch (do whatever your organization can do that might be successful). Think AOL/Time/Warner or Enron.

DePodesta-ism argues you should not swing at every hittable pitch. It doesn't even argue you should swing at every strike. It argues you should swing at most every strike with which you can have a high probability of success if you make contact. And, of course, this is subtly different for every hitter. The non-baseball equivalent is Positioning. Positioning, best defined by authors Jack Trout and Al Ries in the eponymous book, argues you should go into every business you're capable of going into, making every marketing argument for your product you might make, but focusing to a few simple rules, stripping out the lower probability options and then delivering consistently and clearly on your core products, product lines or messages. Think BMW or Aaron Spelling or James Carville.

Out of baseball, the more different arguments you choose to make to close a customer, the more likely you'll find a place where you disagree. Ergo, Carville telling Clinton, "It's the edconomy, stupid". Clinton the wonk loved all the different policy pieces he might argue; if he argued enough different ones, he would find some areas of disagreement with every voter. But "the economy" was a single area important to a vast majority of voters, widely recognized as a melt-down. He could tell people what he wanted to say, and they would gladly listen to what they wanted to hear (a good match). He was controlling the strike zone, forcing his opponent to engage him in an area that he was naturally strong and his opponent incredibly feeble. Like Jason Giambi or Edgar Martinez, they made the opponent work in a zone they could hammer.

TIP: It's the positioning. Unless you're interested in setting new strikeout records, branding is a low-yield strategy.

Wednesday, September 10, 2003

The Phillies' Slash-and-Burn Boy
Meets Transcendental Meditation  

One of the toughest lessons managers have to learn about people management is that no one approach to the "wetware" side is "best". The variables that almost bring the discipline to chaos theory fractality are:

  • Each individual is different and is motivated differently in different environments,
  • Each individual is different and is motivated by different managerial behaviors,
  • On a daily basis, the mood of the team member varies in her or his response to the preceding two factors,
  • Over time, the same techniques tend to wear down, eliciting less response with each repetition.

Billy Martin, for example, was famous for his ability to turn around teams. Even in his "rookie" year as a manager, his 1969 Minnesota Twins improved 18 frelling games. He inherited the Tigers in 1971 and they improved a boffo 12 games in his first year. Martin managed mostly by a mix of intimidation and cajoling; players never knew when he would explode or be their helpful uncle. It seems many of the players he managed busted their butts to avoid getting kicked in the butt. This can work for a while if your key players respond well to MBT (Management by Terror). But after a while, it wears off because eventually you will have applied several kicks in the butt to those who were already giving their all. Martin teams regularly came to an ungraceful end when he'd burned out the mojo.

Niceness has its limits for the same reason. Over time, team members see they the manager will be just as nice and nurturing to the sluggards, the lazy, the parasites who are just getting by, as they are to those busting their butts.

No one technique works as a booster to every individual, and no customized technique that works for a whole team full of individuals is something you want to deploy without variation.

Finally, The Phils

Larry Bowa, another manager with an anger management problem had his first total melt-down of the season twelve days ago after a game in Montréal. This particular Krakatoa was in response to a period where the Phils' odds of nailing the wild card were fading and the team wasn't playing its best baseball. On top of it, players' responses to various events weren't driving the team in the direction he wanted. Bowa had dumped the team's best pinch-hitter for dissing him, and the key players on the team hadn't rallied to Bowa's defense.

His melt-down was followed by the Phils winning 10 of their next 12 games. As detailed crisply by Baltimore Sun writer Peter Schmuck, it was slash-and-burn, bringing down what was there and returning the components to the ground to try and get a quicker yield on a new crop.

Like slash-and-burn agriculture (and the slash-and-burn Sunbeam approach to stewarding corporate assets) slash-and-burn management can yield short-term returns but with each iteration, the returns diminish, for the four rules/reasons I cited at the top of this entry. And as Dan Antonellis already described here (Thursday, August 28, 2003) you can only call so many team meetings.

When Bowa was a player, his anger management problem became such an issue for him he ended up learning to meditate to try and control it, applying Transcendental Meditation techniques. He reaped some short-term gains, but eventually melted down and apparently gave up the practice.

If he wants to extend the Phils' hot streak, it's time for him to pull out the meditation manuals or other, different techniques that don't reek of brimstone, because the power of slash and burn, like the power of "nice" or any other single people management approach, always fades. And be careful how far from your norm you experiment with initially...the big surprise (from Joe Stalin to Cal Ripken in one step) is just as likely to blow up in your face as motivate.

TIP: Whatever people-management approach you tend to fall back on as your norm, observe who it works (and doesn't work) well with. And use different approaches over time. Angus' Law of Problem Evolution states that problems change over time to gain immunity from (become unsolvable by) the managerial techniques we use too chronically.

Monday, September 08, 2003

Pure Innovators versus
Imitators versus Pimps  

Baseball is like business and government in that it usually rewards those who imitate innovators more than it rewards the innovators themselves.

The economic advantages of building new ballparks seem to accrue to the later arrivals who are attentive to the lessons of the earlier innovators, although in baseball, as in other areas, latecomers can fail, too.

The most recent model for ballparks are the neo-retro looking, viewer-friendly parks. The innovators in this are were Oriole Park at Camden Yards (1992) and Jacobs Field (1994), both designed by HOK Sport of Kansas City.

Oriole Park is not only the model on which the new wave of stadia are designed, but it’s the best of the bunch, as well. It’s a lesson that was hammered home to me last week when I got to go to my first game at the Giants’ new (2000) park in China Basin.

The pure innovation in the Baltimore case was to build something that followed these guidelines:

  • (a)    has superb sight-lines and gave all paying customers fine views but gave the high-paying customers the sense they were sitting right on the field,
  • (b)   restrict the number of seats while putting a good product on the field, creating a gravitational field that makes people buy tickets early, and stimulates season ticket and luxury box sales,
  • (c)   efficient traffic flow to retail buying opportunities that profit the team,
  • (d)   fit into and perhaps enhance the neighborhood in which it was built, and
  • (e)    give an overall visual impression that was evocative of an imagined “golden era” of the past, that is, trigger and harvest the good feelings that come from nostalgia.
  • The Indians followed, but not exactly, the Oriole model. The Indians did a better job in some ways, because their front office succeeded in putting a better product on the field over the years. But they didn’t re-write the plan.

    Successful and Unsuccessful Imitation

    In business and in military affairs, imitators of others’ innovations usually don’t duplicate the original. Sometimes they choose that (the environment is different, or the resources-available are different), sometimes they think they can recreate or exceed the inventor’s success with changes, but usually imitators think they can pimp quality and get all the benefits without investing as much, like the sellers and buyers of “Rolex” watches made by slave labor in Communist China.

    Sometimes they can and sometimes they can’t. Neither Detroit’s nor Milwaukee’s new parks have been a big windfall yet for the teams’ bottom lines because they ignored the good product on the field guideline. Unsuccessful imitation because of pimp behavior.

    But the Giants’ stadium is sold out through the season, even though they trashed the neighborhood guideline and did a half-hearted job at the nostalgia one. The stadium doesn’t look like the rest of the neighborhood and is scaled in a way that looks acceptable from afar and oppressive from nearby. Public transit access is designed well but falls too far short in delivery, and alternatives (parking for buses and passenger cars) are laughable. The Giants basically focused on a couple of the rules (fine sight-lines, good product, retail opportunities) and sort of finessed a couple of others. It didn’t affect their bottom line, though. Ticket prices & sales are both high, scalping is rife (including a scheme where season ticket holders can scalp their tickets and the team harvests service charges off of them) and the retail controlled by the team is cookin'.

    The Giants’ stadium is a bigger money machine for them than Oriole Park is for the Orioles. They embraced the money-enhancing, mall-park ideas, and merely dabbled in the neighborhood and nostalgia issues where the returns are lower and less guaranteed. Successful imitation by the team.

    TIP: In the non-baseball world, imitators may sacrifice some quality and still harvest the top-line gains, but most imitations that ignore the core qualities of innovations & simply parrot something popular will be intrinsically empty and failure-prone.

    Thursday, September 04, 2003

    Offense is NOT Linear.
    Neither is Anything You Manage.  

    In baseball, most general managers building teams and managers deploying them understand that success depends less on the individual parts than it does on the way you put them together. Like a cooking recipe, you need balance and the right proportions. And occasionally, the effect of increasing or decreasing some ingredient just a little changes the results radically.

    Baseball knows this, but most big organizations don't.

    Most businesses plan in a linear way. To double output, double the shifts. To have twice as much marketing, double the budget. To save half on labor, lay off half the staff. Most linear planning is foolish. Double shifts reduce effectiveness of labor and equipment. Doubled marketing budgets move dollars to marginally less-effective uses. Laying off half the staff doesn't reduce half the overhead allocated to them. It's simplistic thinking that drives so many of these fools' errands.

    Effects in life are rarely very linear. Here's a great example: The Seattle Mariners' offense this year.

    The 1990s Ms were power-laden with scary sluggers like Griffey Junior, Jay Buhner and Alex Rodríguez, complemented by get-on-base and doubles hitters, such as Edgar Martínez. If you walk the on-base guys, the homer-hitters coming up can destroy you quickly, so you throw the on-base guys good pitches, so they hit better. Line-ups acquire, at some point, critical mass, a concentration of ability that when reached becomes an exhausting experience for the pitcher. There are no easy outs any more, and there are no little oases of respite in a line-up, or so few it doesn't matter anymore. The effect becomes greater than the sum of its component parts.

    The Ms this year don't have a single scary slugger. They have a fantastic and dangerous hitter in Edgar Martínez, and another strong contributor with some pop in Bret Boone. And one mostly-super on-base guy in Ichiro Suzuki. Their other really good on-base guy, John Olerud, isn't performing this season, and since he occupies first base, a position almost every team relies on for key offensive contributions, that's near-fatal. One trade for an on-base guy, Jeff Cirillo, hasn't worked out as Cirillo has struggled at the plate. So after the three functioning pieces, that's where pitchers can stop being hyper-focused. The Ms offense has fallen below the event horizon (to mix metaphors). And this line-up has three pretty easy outs. So young pitchers relax against them and look better.

    A sports-talk radio guy wrote about his a couple of days ago in the local paper. David Locke (I've never liked his radio material much but this was very insightful), makes only one big mistake...let me get it out of the way. He falsely asserts:

    Baseball seamheads (read: stat geeks) love to talk about how the home run is overrated.

    Not true. Stat geeks love the home run, and sometimes I think too much. BITGODs love small-ball, the steals and hit-and-run plays that (truly do) liven up the action, even though on average, they're counterproductive.

    Now here's some of Locke's insightful stuff.

    Mariners fans have been wondering how a team can be so brilliant for the first half of the season and then become downright average in the second half for two years in a row. Why are all five starting pitchers struggling at the same time? Furthermore, why does a team that never makes defensive mistakes all of sudden start making errors?

    The answer is the style of play. The answer is small ball. The Mariners are mentally fried. When there isn't the big bopper in the middle of the lineup, or in the case of Boston, throughout the lineup, everyone must come through. Therefore, every player is grinding every night.

    In San Francisco, the Giants know that Barry Bonds will carry the majority of the load and therefore the rest of the players can play within themselves. It is the same in Oakland when Miguel Tejada gets hot or in Philadelphia when Jim Thome is rolling. The Mariners are without that player.

    Offense is not a linear function. As you build, at some point, the stress on the pitcher explodes him. As you diminish the number of components and different kinds of offense you throw at a pitcher, you simplify both his strategy and execution making it probabalistically more likely he'll cruise.

    Systems in life are rarely linear. Breaking points (in baseball offense or factory output or office productivity or the use of agricultural chemicals or military bombing campaigns) are not very predictable based on composite stats or averages. They each have their own internal functions that mutate based on environmental factors. Because he understands this, David Locke would be a more successful strategist than a corporate hack like Don Rumsfield, who doesn't.

    Wednesday, September 03, 2003

    Abusing Both Pitchers & Metrics:
    Theory X and Theory Y  

    In Baseball Prospectus' recent discussion of the Houston Astros, the commentator complemented team manager Jimy Williams on his handling of his mostly-young mostly-promising starting pitchers. Handling starting pitching, and the blood-drenched debate between the two established schools of belief, is a key area where baseball has a lot to teach non-baseball management. That debate parallels the two sides in Douglas McGregor's Theory X/Theory Y schools of management.

    Tersely, Theory X posits people at work should be made to perform as closely to machines as possible, by control and coercion. If you haven't read Lewis Mumford on how this world view came into being, it's worthwhile (Technics & Civilization, Myth of the Machine are the most focused on this). Lots of people think Theory X is passé in North America, but it's made a big comeback in the last four or five years in industry, and has strong support in the technology world among those who argue the laughable delusion that "the brain is like a computer". Theory Y posits people work hard when they're given incentives and because they naturally want to be good at what they do and that control is counter-productive.

    Bitgods and Bitmonsters

    In baseball, Theory X is the "Back In The Good Old Days" (BITGOD) theory of using a starting pitcher. There's compelling evidence that starters on average in today's environment are most continually effective if they're limited to throwing 100-115 pitches per start. But the BITGOD adherents, usually of the generation that had pitchers who pitched a lot of complete games and no one was counting pitches except some scorekeepers, measure effort by innings. They also tend to conflate masculinity with complete games.

    In baseball, Theory Y is Pitcher Abuse analysis. Rany Jazayerli argues:

    The injury rate of pitchers, in particular young pitchers, is astonishing. Pitchers are several times more likely to get injured than hitters, and for every prospect that becomes a successful major league pitcher, a dozen more have their careers stalled or ended by injury. This is a reality of baseball that has persisted since the game was invented; the act of throwing a ball overhand is inherently unnatural, and the repetition of throwing, even with excellent mechanics, can lead to inflammation or injury to the muscles of the rotator cuff, or in the ligaments that hold the elbow in place.

    Hard to argue with. Basically true, not only in baseball, but by analogy in the non-baseball workplace, too. I once supervised a big multi-city project that had over 20 people producing white-collar analysis work that was measureable both quantitatively (how much, how many, how complex) and qualitatively (how accurate). Once we had a good bit of track record, we analysed the history and found two things. One, no two people were generally alike in their patterns, every individual had important differences. Two, we found that that no-one was at least half as effective in their 53rd hour as they were in their first 36 (which were pretty close throughout them for effectiveness). Worse, someone who broke the 52-hour barrier for work in a week was diminished from their previous week's performance for the whole next week, with some individuals lugging for two weeks.

    The modern "More With Less" cult loves to exhort employees to work beyond 52 hours (in most cases, they aren't paying overtime, so in the instant benefit/cost thumbnail, they feel they're getting more) even though they're getting less than half an hour of work per hour applied, and degrading the next week's performance, too. Bad management. Strip-mining.

    In baseball, scores of young arms have been maimed for life, careers broken or just diminished by BITGOD pitcher management. Others have just been made less impressive because most pitchers who throw a 130 pitch start and come back to their next start on normal rest underperform their own norm in the next start. Any minimally-competent project manager would tell you in almost all circumstances they'd rather get a little less out of a team member today if it increased the assurance that it would return them a lot tomorrow.

    But there's one shortcoming in the Pitcher Abuse school, an unnecessary one. In Jazayerli's seminal essay on the subject, he recognized right up front that each pitcher was an individual, with different patterns. But a lot of the current Pitcher Abuse work tends to view "pitchers" as a class that can be averaged. So the argument about Jimy Williams management of Astro hurlers' arms may or may no be valid. It's valid as a general, average case. Is it valid for the 2003 Astros, and more to the point, is it valid for each of the individuals who are Astro pitchers?

    Some pitchers are currently being overused on a regular basis (compared to the 100-115 pitch average standard). Most suffer immediate diminution. For example, Mark Redman of the Marlins looks to be a guy suffering from immediate effects of outings of over 115 pitches. He's allowing more baserunners and apparently shifted from being a pitcher who induces a lot of ground balls (impossible to loft home runs, harder to hit doubles and triples) to one who is throwing pitches that end up as fly balls (easier and easier). But in contrast, the Cubs' Mark Prior seems to have little short-term diminution from his blood-curdling overuse. He broke down earlier this summer, but his high set point for next-few-starts effectiveness seems closer to 120 pitches per game than to 100. Other guys can't go 100 without it degrading them. In the long term, there will undoubtedly be health effects. These, too, we can guarantee two things about...the same two things we can guarantee about non-baseball work.

    In the Non-Baseball World...

    First, the overused will more likely fail to maintain effectiveness, and second, there will be many individual patterns, many of which will defy the averages.

    TIP: Remember when you collect and apply measures that averages, once grouped, may disguise very different individual patterns. And don't be a BITGOD.

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