What Business Can Learn From Baseball

Until recently baseball front offices had been filled with crusty, grizzled ‘baseball’ guys.  The Moneyball crowd of 30-something sabermetricians has changed that but, surprisingly, the old-schoolers recognized the importance of some of the softer skills and nailed the execution, which has only been expanded upon today.

And despite all the ‘advancements’ made in the white-collar workplace there is plenty that executives can learn from those old-time, stogie-chomping, pot-bellied baseball guys.

1. Focus on hiring and coaching. Big league teams are only as good as the people on the team and how well they work together.  Massive amounts of dollars are spent on scouting new talent (not waiting for players to happen to send their resumes to them), operating farm clubs and paying their managers and coaches.  According to MLB, clubs spend an average of 46% of their revenue on non-player expenditures.  These do include expenses related to non-scouting, coaching and farm club related expenses, but those are comparatively small. Even taking the base case scenario as suggested (Oakland and Montreal’s spending levels) we’re looking at ~31% of total revenue being spent to acquire potential superstar employees and proactively work to improve upon their performance.

Does your company care that much?

Sure, it’d be cheaper to do away with the farm systems.  It’d be easier to cut the coaching staff and assume people will improve on their own.  But your team wouldn’t be competitive for very long.

(note: My digging didn’t uncover recent financial statements.  MLB financial statements are kept close to the vest but they did release some carefully prepared statements at the turn of the century to help diffuse labor issues.)

2. Merit-based Promotions. My wife works in an industry where ‘paying your dues’ is required.  Similarly, I’ve experienced situations where sychophantism was the road to success.

Can you imagine baseball doing that?  You could hit .400 with 50 HRs and not get promoted because you hadn’t spent enough time at your appropriate minor league level or because you didn’t tell the manager he did a great job setting the lineup.  It’s reckless for mid-level managers and executives not to promote their best talent (best being defined by results rather than time served or ‘likeability’).

More attention needs to be paid to how we evaluate talent and ensure that the right people are retained, motivated and rewarded.

3.  Continual Feedback is Vital. Can you imagine the coaching staff or front office only sitting with a minor league player once the season is completed?  And yet in every workplace I’ve been involved, not only has there not been continual feedback (though I’ve always made a point of doing so with my reports) but the formal annual performance review has been anything but formal, regular or valued.

4.  Hire the Best and Don’t Get Stuck Pigeonholing Based on Past Performance. Like other sports, baseball teams draft for the best player available rather than what their team needs at the moment.  Hire based on intelligence (be it emotional, technical, interpersonal etc.) rather than someone who has performed the specific tasks you need accomplished in the past.  How many times do you hear outfielders or shortstops being converted to pitchers?  Baseball doesn’t give a damn what you’ve done in the past.  It cares about what an athlete is capable of doing in the future and where he can best help the organization.  But, how often do we see HR people not look at resumes because someone doesn’t have the exact requisite past experience?

We have a long way to go and there is a lot of easy, low-hanging fruit to really improve our businesses should we choose to pay it the attention it deserves.  Yes, things happen quickly inside the cubical mazes but we have to rethink our priorities and adjust accordingly.

How do we reprioritize the importance of employees?

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