Sunday, August 21, 2011

A Revelation From Fred Claire: How to
Negotiate With a Competitor  

In closed or limited organizational ecosystems, you have to be able to negotiate with competitors. Not all of us work in closed systems, but unless you're the rarer than rare person who has so much power he can force his will on everyone (say, Saparmurat Niyazov or  Lloyd Blankfein) sooner or later, you'll be negotiating with a competitor. It could be external...a company that's a direct competitor, or internal, a territorial manager of an adjacent department or a department you are competing with for resources.

Baseball is an almost-entirely closed system. Whenever you make a deal with another team, you are pushing hands with an antagonist who, in a zero-sum system, is seeking the exact same end goals you are: a World Series trophy. So any asset to your side of the equation is most likely a debit on her side. In a zero-sum system, it's pretty rare to get to a win-win outcome. (Bill Bavasi told me this, btw, is one of the reasons some GMs far prefer free agent signings -- it doesn't collide with the zero-sum nature of trading in a closed system.)

Well, if it can be done anywhere, it will happen in the most vibrant, flexible, advanced management arena in the world, Baseball. And the way you do it is to analyze the situation in agonizing depth, or at least to a level considered agonizing in the bush league management arenas that are the ones Beyond Baseball.

I'll give you a great example I read recently in Fred Claire's 2004 book My 30 Years in Dodger Blue. The situation is this: In 1998, the Bums' catcher and primo team star, Mike Piazza, and coming off arguably the best-ever offensive season a catcher had ever had, was to become a free agent. Claire and the Dodgers fiercely wanted him to stay, but new corporate ownership (Fox) was focused elsewhere, and enforcing the normal post-takeover budgetary tightness, while Team Piazza was indicating they were seeking the fattest contract in Baseball history. Pre-season negotiations had failed to close the deal, so Piazza entered the season unsigned, an indicator to other teams that he might be traded (since a team that holds on to a good player who leaves for free agency & signs w/another team is very unlikely to recover "full" value for the loss of services). Other General Managers, such as the Florida Marlins' Dave Dombrowski, a leading practitioner of negotiating arts, would float offers, in the hopes of adding immediate wins, or adding wins and signing the star, or alternatively, flipping him to another team looking for immediate wins in exchange for a handful of promising cheap youngsters.

So, this excerpt from Claire's book:

In that call, on April 10, our negotiations with Piazza on hold, Dombrowski had inquired about Mike. His approach was very direct -- "Fred, would you trade Mike Piazza and a young, low-salaried pitcher for Charles Johnson, Gary Sheffield and Jim Eisenreich?"

I knew Dombrowski was under orders from Florida owner Wayne Huizenga to unload payroll after the Marlins had won the World Series the previous season and yeat had lost money in the process. Sheffield was at the top of the Marlin salary list in that he had just signed a six-year deal that paid him $61 million from 1998 through 2003.

Dombrowski figured if he could trade Sheffield for Piazza, the Marlins would be free of the bulk of their future payroll obligations. Furthermore, Dombrowski would be in a position to acquire young players for Piazza in that Mike was in the last year of his contract.

I went to Graziano [Claire's boss] and told him {snip} I wanted to reply to Dombrowski that we weren't interested in discussing Piazza because we wanted to sign Mike, but we were interested in Sheffield.

My reasoning: I felt that as long as Sheffield remained the focus of trade discussions, Charles Johnson would remain a Marlin. The two made an attractive trade package, the high-priced slugger paired with the lower-priced but highly-valuable catcher. If Fox decided Piazza had to go, Johnson would be just the replacement we needed. {snip} 

A subtle, masterful playing of the chess board that can only happen because Claire's workgroup has come to a blisteringly thorough understanding of the other side of the negotiating table. The Dodgers still want to sign Piazza, but they may not be able to, for whatever financial or corporate-political or personal reasons. The Dodgers would like to keep the Marlins' younger, cheaper catcher (and not as fine a player, but already Johnson was an All-Star and had won a Gold Glove) in the trading pool so the Dodgers might snare him as a contingency if Piazza left. But Johnson was a most-attractive player beyond his on the field value; he was a logical pairing with Gary Sheffield, the personally difficult but extremely productive and extremely expensive slugger in a trade.

So to keep Johnson from leaving the Marlins, Claire hoped to pin the Marlins by expressing more interest in Sheffield than the Dodgers really had. Getting Sheffield's and Johnson's prowess and payroll obligations wouldn't necessarily be a tragedy, but why not try to get the sweeter benefit/cost pairing alone (in Johnson)?

To attempt this required nothing less than the striving for total data omniscience.

Claire and his group needed to:

  • examine the dollar and playing values,
  • learn and interpret the other side of the table's motivations and short- and long-term plans,
  • interpret the Marlins' valuation systems and measuring factors as well as their own, and
  • come up with either a win-win match-up, or, barring that,
  • a ploy that would freeze the Marlins pursuit of other deals as long as possible .

And, oh yeah, without totally burning the other side of a table, because (especially) in a closed system, you don't want to set off a neutron bomb (a deal so bitter that it guarantees one side will never again do business with the other).

In your own management, consider how complex the preparation for this negotiation was. Are you good enough for Baseball (that is, do you prepare this way)? You can in most cases, of course. It requires a level of research most managers Beyond Baseball are unwilling to take on.

Maybe you can't be as skilled as Fred Claire, but I promise you it's worth trying.

Thursday, August 11, 2011

Yellow Dandelions Trump Black Swans & Blue Oceans  

"Luck is the residue of opportunity and design." 
John "The Bread Street Bomber" Milton & Branch Rickey

The global Business of Business Advice is an odd industry. People write articles or business publications on a theoretical idea. They try to spin the idea in an original-sounding way, and if a publisher thinks the sound resonates, it becomes a book. If the book and the publicity around it becomes widespread enough, becomes a cult. Hundreds of thousands of readers, some of whom have a lever, a fulcrum & a place to stand, think they might apply the theory in their own workgroup or organization.

Roughly, for about every 1,000 copies sold, I estimate there are about 1,500 people who learn enough about the underlying principle to talk about  the one sentence description of the core theory. I estimate 600 of the books get read through, maybe 30 people try to implement a project, initiative or makeover based on the theory, and of those 30, you can count on the normal rate of success (Angus' Second Law: 85% of corporate projects fail absolutely or are euthanized (or forgotten) before completion, 10% deploy based on their original goals and 5% deploy based on original goals and succeed). So for every 1,500 people who can relate the core idea, 2 (rounding up so as to be a bit optimistic) turns Business Advice into useful action. For the other 1,498, it's just plaque, perhaps entertaining or diverting, but nothing that delivers on the mission -- the explicit promise of business, leadership or management advice.

Two of 1,500 is only an average. It can go up (or, more likely, go down) from that proportion. There's an underlying reader trend that undermines the chance for implementation. As a mass, readers would rather read about big ideas than small ones, and they'd rather read about theory than practice. So the largest readership goes to the big theoretical idea books than the practical (something you do that creates positive action). And there's another factor that literary (book) agents will tell you, too: Readers don't want to act on any of this Business Advice - they just want to be entertained and feel good.

Here are two favorite examples of fun best-selling global Business of Business Advice that are pre-destined to never reach the 2-in-1,500 successful implementation norm: The Black Swan Theory and Blue Ocean Strategy. They are both giant ideas based that are probably quite true but close to impossible for any individual or team to apply to anything bigger than a lemonade stand. The Black Swan is based on the giant idea that, "A black swan is an event, positive or negative, that is deemed improbable yet causes massive consequences." Blue Ocean, "explains how to create uncontested market space and make the competition irrelevant while charting a new path to capture new market space that is ripe for growth".

Well, Yellow Dandelions trump Blue Oceans and Black Swans...not for popularity and sales, but on two counts: 

  1. You can actually implement this idea in any organization, and
  2. The net benefit of deploying it will give you actual (not just theoretical) returns.

The Yellow Dandelion was second-sacker Fred Pfeffer, one of the first baseball players to write a book on "scientific baseball". As explained in Paul Dickson's exquisitely informative book The Hidden Language of Baseball: How Signs and Sign Stealing Have Influenced the Course of Our National Pastime

In 1889, N. Fred Pfeffer, the bare handed infield star and tactician with the Chicago White Stockings of the 1880s...published a manual called Scientific Ball {snip} At the heart of his defensive science was a "Code of motions so perfected" that every man on a club knew what kind of ball was to be pitched next. "Knowing this in advance, the men can so place themselves so as to give the man in the box [the pitcher] the most effective support.


"Pfeffer believed that the fielder's job was to move at the very last moment, when the pitcher was in his delivery, and that once a play had begun it was imperative that the players knew how to back one another up. "Failure to 'back up' players and positions has probably been as disastrous a feature of losing clubs as any other which can be specified," he wrote. "Because of this fatal weakness, scores of otherwise well-played games are needlessly sacrificed each year."

The Yellow Dandelion Deployment is one that, because Baseball is so transparent and overwhelmingly meritocratic (both useful attributes wholly missing from corporate workplaces) you can just plain see works out.

The teams that grab the every-event, small but attainable advantages (in baseball parlance, "execute") tend to win more games because they don't leave games' outcomes as much to chance. If you watch a game for Yellow Dandelion Deployment, watch the fielders "cheat" on many pitches, cover each other on defense in a variety of ways based on the situation, you can see how absolutely effective this is. Sadly, televised games, while great to watch, rarely expose the Deployment. But I urge you to watch a major league game live (preferably from the upper deck as close to directly behind home plate as you can) and watch the extraordinary clockwork of a skilled major league team that has mostly veteran players. Pick one non-catcher fielder out for each two-inning span and try to follow what they do on every pitch, every ball in play. You'll see 120 years of refinement beyond Pfeffer's actionable principles, a level of teamwork and management acuity beyond everything in the non-MBB management world.

Unlike Blue Oceans and Black Swans, you can absolutely apply Yellow Dandelion tactics to your benefit in the workplace.

Make sure that on tasks that must succeed for your organization to succeed, each responsible person knows she has one or more teammates to back her up, own some responsibility for overall success. You have to start this overtly, not with a memo. Good managers always take on the responsibility themselves of each contributor's success, being there to back him up, but once a manager can break out beyond merely taking on that backing-up personally and deploy it to the contributors nearest the task-owner (not all others -- the right fielder can and will back up plays to 1st base but it's a waste of energy to have him try, futilely, to back up plays at 3rd) the useful contributors will learn the right back-up moves through repetition.

What's the best way to kick this off?

By both explaining the back-up theory in advance and then starting to assign back-up contributors to every task. These back-ups can be "editors", or "timers" or "ambassadors".

"Ambassadors" are most useful when a task is multi-departmental and the contributor assigned to the task needs to enlist allies or try to push through work happening outside her span of control; the ambassador helps with that external pressure.

"Editors" I use to be the second pair of eyes for quality control; the editor is someone the task-owner can bounce ideas off of and who can check deliverables for conceptual or trivial kinds of accuracy.

What I call "timers" are teammates who help the contributor stay on schedule and co-own the deadline. The timer is not a non-com issuing orders or applying pressure. The timer relieves pressure by being equally responsible for knowing the task schedule and helping out the task-owner without having to be solicited.

You probably won't have to delegate each rôle on each project. You can certainly invent other rôles that make sense within the context of your own endeavour, but invent a one- or two-word name for each, so you can use the name as a shorthand. But you should make a habit of assigning one or more back-up rôles to most every task.

At the completion of every meaningful task with an assigned back-up, you should get the participants to talk to the team about winning moves, or problems that would have been smaller with new back-up ideas.

After a series of successes, you invite contributors to deploy themselves as back-ups or invite back-ups on their own. (In Baseball, it's terribly inefficient -- that is, a losing strategy -- to have the manager assign every back-up on each pitch or every play in the field; players need to be able to do this for themselves based on established principles refined by their own practice and experiences.)

There are two common problems in Yellow Dandelion Deployments: non-accountable or otherwise anti-team oriented contributors, and over-or under-management.

Some contributors resist help, being too egocentric or believing teamwork shows them to be weak. Some of these people are tractable, for example, if you point out how hard it is for a single person acting alone to execute a double-play. But some are simply too insecure or introverted to be comfortable having back-ups. You have one of two solutions to this problem: if the person is a great contributor with great success (think Barry Bonds) then exempt her from the routine; if he's not, get rid of him.

And you can control the over- or under-management. Over-management is removing from the contributors the chance to have rôles delegated to them (which is the equivalent of a major league manager trying to coordinate all players on the field with every pitch). Under-management is not selling the teamwork benefits hard enough, re-deploying people to the rôles they seem to best while still giving them chances to be good at other rôles, or not monitoring the evolution of the system and its outcomes.

The odds of you becoming enriched through successfully identifying a Black Swan and then deploying a counter are not 2-in-1,500, rarer than a no-hitter. The odds of you identifying and deploying a Blue Ocean Strategy are no better.

But 1,500-in-1,500 managers in any organization that has seven or more employees can apply Yellow Dandelion Deployments with success. Not only does it work, but it's actually fun.

You may not actually ever have three hits in an inning, like Fred Pfeffer had in a game on September 6, 1883, but you can knock out a bunch of hits everyday using his "scientific baseball" principles.

Monday, August 01, 2011

The Peavy Principle: Every Technology Enables New Abilities
& Disables Existing Ones  

Clarke's Second Law of New Technology (paraphrased):
For every human capability a technology creates,
it disables what exists; this may net out as progress or retardation.

In Baseball (and Beyond Baseball), new technologies that create the capability to do things we've never been able to do before (say, Field F/X, which can measure infinitesimal speed and trajectory and rotational measures for a batted ball) tend to add to human knowledge and  "ability".

New technologies that merely make it easier to do the things we can already do (broom-->vacuum cleaner, for example, or texting instead of voice telephone), change the things we do in foreseeable and unforeseen ways, and they don't always represent net progress. Author Arthur C. Clarke wrote a classic sci-fi story that illustrates this counter-intuitive reality from a military/industrial perspective.

There's a great Management By Baseball example that happened recently that makes this effect, what I call The Peavy Principle, very easy to understand.

According to Adam Kilgore's story in the Washington Post

CHICAGO — The answer to how the Washington Nationals would achieve their latest win seemed to reveal itself in the second inning Saturday afternoon. Chicago White Sox starter John Danks walked off the field, a strained muscle having ended his day after six batters. The Nationals could feast on Chicago’s bullpen and chalk up another win. Just the usual.

“I thought we got a break,” interim manager John McLaren said. “I thought we were going to hit their bullpen.”

But after spending two weeks convincing themselves they can’t lose, the Nationals lost to the White Sox, 3-0, before 23,008 at U.S. Cellular field, just their second defeat in 14 games. The Nationals managed two hits and struck out 11 times over 7-1/3 innings against the White Sox’ bullpen, which received a dominant cameo by veteran ace Jake Peavy, making the first relief appearance of his career. {SNIP}

 Peavy dominated for four innings, allowing a single and no walks while striking out seven.

Before each series, the Nationals’ hitters gather in a small room adjacent to their clubhouse. With hitting coach Rick Eckstein, they watch video and study tendencies of each starter they will face and the relievers. Peavy, who started Wednesday for Chicago, fit neither category. “I didn’t see Peavy’s name on that list,” McLaren said.

Though the Nationals never mentioned Peavy in their hitters’ meeting, they still gave credit to his pitching. “The bottom line is, we just didn’t swing the bats well today,” third baseman Jerry Hairston said.

In the last fifteen years (depending on which team, a little earlier or a little later), video library software has given coaches the ability to create, with just a few hours of assembly by the coach or other team aides, wonderfully organized and informative video tutorials on how opponents play, their biases and tendencies and quirks and tells. This new technology replaces a prior, non-technological way of doing it; word-of-mouth verbal sharing of information, three-ring binder collections of data points, exchanged tips in the batting cage before the game, exchanged tips in the dugout during the game.

It's not that none of that pre-video library software information happens; it just has become secondary, delivers less impact than the new way and, therefore, becomes relatively devalued by most of the participants. By making a high-tech system THE WAY to get 'er done, the other ways seem to be "old fashioned" or lower yield.

But for every ability an augmenting technology increases, it undermines an existing capability. By being able to hyper-focus intense information about the White Sox relievers, that attention gets invested, and so a resting starter, Jake Peavy, who comes into a game as a reliever, is glossed over in the chosen techno-path to success. ¿Did the Nationals have three-ring binder back-up? I'm not sure; when interim Manager McLaren skippered in Seattle, I saw him carrying two. But as a recently-appointed interim, he would work with the protocols the team had already worked out. Even if they did have it, the batters would have already tapped their cognitive investment in other, more fluidly-acquired accustomed ways of getting data. They cannot have helped but instinctively valued the video information over the old-fashioned.

In Baseball (an endeavour much more brutally zero-sum competitive than the easier work domain you manage in) a Jedi Master of finding a cognitive edge like White Sox manager Ozzie Guillen, undoubtedly knew there was some tiny (not giant) advantage in putting on the mound an unscheduled reliever, but in Baseball, because it's zero-sum, tiny advantages loom large. The reality that Jake Peavy is a monster pitcher when he's healthy had to have been a consideration as well. And Guillen is as prepared as any manager in any field; he and pitching coach Don Cooper would always, every game have a Plan B for who would come in early in a still-close game if the starter is injured or blown out.

In Baseball, technology that replaces manual + verbal methods may enable people to do what they did before faster or cheaper, but it makes the knowledge more brittle, less hands-on, more shallowly textured. Technology eats some of the nuance while spitting out better volume...what I call The Peavy Principle.

...is actually quite wide-spread. The most wide-spread example is cell phones replacing land-lines. It's not technology that gives us unprecedented abilities, but does augment the span of places we can use a telephone or type messages or play games or execute frozen pork-bellies futures contracts. Mobile gives us mobility, the capability to call from most anywhere (unless you're a Sprint user in suburban Chicago or an AT&T victim in San Francisco). But the quality of communication goes down as the degraded fidelity eliminates audible intonation and voice affects. Is the trade-off worthwhile? For most users, I suspect the answer is probably yes, but for communications that require clarity (business, romance, intelligence), the loss is palpable and costly.

I'll give you a concrete example from my own practice. I was one of the earliest users of project management software, but I didn't learn on it. Before there was software, PMs worked with a surprising range of physical tools. I used mechanical pencil  on graph paper and, of course, had to do trial and error, making copious use of the Eberhard Faber Eraser Stick (known in the trade as a "poodle penis"). I wouldn't describe this as "the good old days"; it was truly challenging, and I welcomed my SuperProject and later my TimeLine (a now-gone package that was at least 4x as productive as anything on the market today). I was project director on a USEPA contract that had 23 people who through the project worked asynchronously in 10 cities...a massive logistic effort that additionally required a lot of knowledge about the individual talents (no two of whom had the same strengths and weaknesses) and concurrently was an attempt to prove to the agency that a co-op could deliver comparable quality at lower cost.

Setting up a project was faster this way than it is using even good project management software. Recalculating in software is much faster than erasing/rebuilding-by-trial-and-error. Getting the first draft done is much faster in software. But woe to the software-only solution when the plan veers away from the original plan enough that it requires resequencing, or re-applying the individual talents of non-commodity labor from one sequence to another. Because project management software "believes" people are commodities, and it's almost impossible to program human interdependencies or stored knowledge into the database that sequences decisions.

I could actually do this significantly faster by hand. So can most professionals who did or do it by hand, because the physical drawing and erasing of lines, not delegating that to a machine, gives the PM a much stronger and more textured understanding of the interdependencies.

People who learned on software (most contemporary PMPs) and at the same time never do it by hand tend to undervalue the aspects of project management that the software is counter-productive for or simply doesn't do. Most learned-it-using-software suffer from The Peavy Principle, that is, they can do it fast, but by delegating the knowledge to a technology, they can overlook details the technology ignores, filtering out valuable information simply because the software developer didn't value it, or because it was costly or perhaps impossible to embody in software.

By stuffing the data into a digital container, removed from the visible and manipulable world of physical artifacts, they master technology, but undermine the fullness of their craft -- as my associate Athena explained to me when she was taking a PMP certification course, they were teaching people how to operate software, do effective data entry and report their results thoroughly, not how to manage projects.

I'll give you a another equally-painful example, in case you have no experience with project management. Handling data.

Many of us who analyse data for a living actually comb through the raw data before we start analysing it. It's time-consuming, and doesn't always have big rewards, but we find that the exploration gives us a better handle on it and makes it easier to track the exceptions that indicate valuable insights or dirty data. Some of our peers, though, trust data enough to make it an unseen artifact that's hidden in a digital container. Even when they use other software to flag exceptions or pinpoint certain kinds of out-of-scope points, they can miss subtle flaws that the technology helper wasn't programmed to recognize.

Even famous and brilliant scientists who don't respect the data (the noun, the reason for the analysis) as much as the tool used to analyse it (the verb) are missing a key piece of the grammar of data analysis. A few years ago I read a serious clever baseball researcher's article on platoon splits (the ability, for example, of a right-handed batter to hit left-handed pitching overall better than right handed), and he had come to the conclusion that it was not a skill (not a repeatable event, but one driven by luck or other external factors). His results were quite unequivocal.

I was surprised but interested, because platoon splits are a piece of unquestioned protocol and I love to question the unquestioned protocol. I'd fiddled with this problem before without coming to useful conclusions, and he had taken a very different tack in the analysis and had compiled a great swathe of data. I asked him if he would give me a copy of the data to work with, and he generously shared it.

I opened the file with great anticipation and started combing through the individual rows, associating codes with the players they referred to, their seasons, all artifacts I'd never had the pleasure of examining as consolidated numbers. But you can imagine how disappointed I was when I saw that much of the data was flawed, the result of a bad transform routine, one that repeated two of the fields every so many rows (not all rows, not all fields, but regularly making false certain rows in a predictable sequence). Each one of these rows was within scope, and every one, taken alone, was feasible. There were no out of scope characters or out of scope row lengths -- it was a giant pile of broken data that smelled fresh to data cleaning routines, and turned the research conclusions from significant to not. Only a human eye and brain considering patterns would detect the underlying errors.

I did send the deck back to the mathematician with a note, and thanked him. His push back was that I must be mistaken and that errors would have been caught by his technology. He had evolved out of being a scientist and into a technology midwife. If he ever opened his file and looked at it line by line (honestly, an exhausting task), he would have known. The technology that enabled him to adsorb vast piles of data and clean and analyse it and deliver insight by a thousand slices had left him exposed to intellectual death by a thousand cuts. It had enabled vast quantity while degrading critical quality.

What technologies do you use that threaten to impose the Peavy Principle on your efforts? If Baseball, the most productive and accountable user of technology can get screwed up by the Peavy Principle, I'm telling you it can mess you up, too.

This page is powered by Blogger. Isn't yours?

free website counter