The Dog Days of Summer 2005

Today I recieved the article below from Jeff Black, a Principle Consultant with the executive search firm of McDermott & Bull. Jeff writes these articles regularly and sends them along to clients and friends, of which I am fortunately numbered, and he's agreed to let me share his words with you. Enjoy.

A Relationship Story
A Baseball Metaphor for Your Business – Focusing on What "Really" Matters

Seeing things as they really are is what every business wants to believe it does. No disguises. Sorry, it’s not that easy. Here’s my example:

During the last 5 years, things have started to change in the business of fielding winning major league baseball teams. That’s just the last 5 years of a game that has been played professionally for 130 years. Only recently have team owners begun realizing that the logic for choosing players that prevailed for 125 years was dead wrong. Fortunately for the fans, the good-old-boy network and "group-think" mentality that prevailed all that time caused every team to be stupid together, so at least the playing field was level for the fans.

The new economics of the game, with the huge imbalance in resources between the rich and poor teams, has spawned a sort of guerilla warfare among the wiser of the "have nots". If a team spends only half what others do, then they really have to spend smart. It sounds a lot like the battle between the big guys and little guys in any business, and the underdog behavior that is necessary for the little guy to compete.

Here’s how it works, and as with many good ideas, it’s really simple – just seeing things as they really are. For 125 years, while mountains of statistics have been collected on ballplayers, teams have consistently been blinded by their perceptions about "talent" (like the 95-MPH fastball). They have failed to truly evaluate what the data shows the player has actually done – as measured against what really contributes to winning and losing – generating and preventing runs. What’s happening in these guerilla units is that the Harvard MBA is replacing the grizzled veteran scout in identifying the right talent worth the investment of limited resources. Just like when businesses are seeking key talent, the best predictor of future success is past success…and this means real accomplishments - facts and data - and not just a good-looking fastball. We have to make sure we are measuring the right things.

Although Baseball had a natural tendency to value facts and data, as indicated by the extraordinary focus on collecting and cataloguing statistics, it has regretfully and blindly continued to rely on the flawed-but-familiar performance measurements that were crafted 100+ years ago (like batting average). Just like the technology business that can’t bear to move away from its engineering roots and focus on real business issues, Baseball has been run by insiders and good-old-boys forever, and the game has been the victim of its own reliance on tradition – it failed to evolve and to see itself as it really is. We’ll see in the next few years whether the new guerilla clarity makes the difference in who really wins more ballgames cost effectively, but the early signs point to a logic landslide. Just take a look at the Oakland A’s this year, with ¼ the payroll of the Yankees and ½ that of the Angels, they are doing awfully well.

In terms of relationships, this trend isn’t happening without some ruffled feathers, as you can imagine. There are a lot of Baseball old-timers harumphing around and whining about these renegades. Making revolutionary changes in an institution takes fortitude. The same is true for how your business looks at its own talent. Who can argue with the ideal of a highly integrated team with an open and honest culture where the best is brought out of every individual? Nobody can. However, if you don’t have winners and natural difference-makers on the team, the results are at risk. Are you evaluating your talent for their real contributions to your company’s success? Or are you blinded by how good they look throwing their fastball? Measure the right things, and remember, what gets measured gets improved.
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