2 November 2003

Every year, right about this time, a whole bunch of people get fired. Usually, they’re big shots, earning a good chunk of money in high-profile jobs. Although some of these people have very obviously under-performed and may deserve to be let go, many others have accomplished 80, 90, or 95% of their goals for the year, and have helped their organizations reach new heights. Alas, in this business even that lingering five percent margin seems to be enough to do you in.

The business at hand is baseball – and to an outside observer, the fantasy world where baseball’s coaching staff and certain highly-paid players bears the brunt of the responsibility for a team’s collapse at the end of a season seems downright strange. Take the Red Sox, lingering under the curse of Babe Ruth, which has firmly kept them from a World Series victory since 1918. Looked at with the a little objectivity, the Red Sox seem to have done well this year – they won 95 games under manager Grady Little, reportedly the most games in a season since 1986, and they came very close to beating the Yankees and getting to the World Series.[1] Think about that: they had a great season, the best in 17 years, and they came closer to winning the top title than they have in some time. And for his troubles, Red Sox manager Grady Little got fired. How does that make sense? Sure, they didn’t win the top title, but clearly the coaching staff was doing something right to take them as far as they did. Likewise with the Yankees, who lost to Florida’s Marlins: long-time or otherwise valuable staffers – from Don Zimmer to Rick Down – have been let go or not-exactly-discouraged to leave the team with the best World Series record in baseball history, and which came pretty damn close to winning it yet again this year.

Such is the price of near-victory, apparently. The bigger issue – no, the bigger problem – is that baseball is hardly the only place where black-and-white attitudes about management and leadership exist. Major League Baseball team owners are just one reflection of a narrow cycle of understanding, a limited focus on “winning” with only one acceptable definition thereof. All too often, in business as in the business-of-baseball, “winning isn’t everything, it’s the only thing.”[2]

This connects back to the broader issue of the role of chief executives, very much in the news these days, from the scandals of Enron, to the compensation “problems” at the New York Stock Exchange, to the second-guessing about new leadership at corporations like General Electric or Motorola. And as with baseball, it seems to center on a disturbing cycle: companies may run into trouble or fail to meet their goals, and when they do, they begin casting about for scapegoats, rather than looking at the broader abilities of a full team of people, and perhaps revising their own definitions of victory or success. Then they look for and appoint a savior, the leader who will step in and do for company what someone else couldn’t. Expectations for these corporate saviors are high, and probably impossible to meet – but given the terrific compensation incentives, finding someone who thinks they’re up to the challenge is not such a problem.

It is a ridiculous cycle, and one that forces companies, executives, and even shareholders to make Pyrrhic decisions constantly. Aggressive profit numbers must be set, in order to send a message of perceived strength; it wouldn’t do to suggest otherwise. When any combination of forces make those numbers or expectations truly unrealistic, something else must change to accommodate the situation, typically leading to distracting decisions: to acquire other companies – or be bought by one – or to abandon core businesses in order to pursue other opportunities that look like they will produce better profits at faster rates. The future is now, and few have patience to wait even that long for real results. At some point the media and market analysts kick in, and companies will either be an investor’s darling or a junk bond loser, without much (public) acknowledgment of the middle ground. (Of course, many smart investors and analysts get rich off that middle-ground, but those stories are less interesting than great achievements or staggering losses, and therefore fewer people pay attention.)

For the individuals involved, the corporate saviors, the cycle is similar: once hired, if the person performs well for some small period of time, there are nothing but Hosannas to be heard. ... And as soon as something fall short of goal, outside forces notwithstanding, the executive risks vilification, with a public catalog of their missed opportunities compiled, few excuses accepted, and they will then be sacked (or not-discouraged to leave on their own). None of this seems very cost-effective in the long run; buying out executives costs money, even when they have actually been failures; focusing on staggering profit margins undercuts the value to be had from plain-old good profit margins – and may even reduce the likelihood that over time a company can reach those higher numbers through hard work. Then there’s the human toll, not just on the executives themselves (for whom few, rightly, feel sorry) but on all the other people who have made commitments to a company and the people they work with or for – radical leadership changes suggest everyone’s job is at risk, which undercuts the sense that people’s interests and fates are tied together.

In other words, there is a morale issue here as much as a management issue. And, so, back to baseball. The Red Sox, the Cubs, and the Yankees all did well this season, even if none of them won the World Series. How they do next year will depend on a lot of things, the quality of the players and the coaching staff included. But isn’t part of their success also driven by morale, the sense that their team of people can work together towards a common goal, and that their fortunes are tied together in order to do so effectively? Singling out one player or one coach as the cause of failure from within an otherwise-winning organization is rarely more than scapegoating, and it perpetuates a cycle of dependency on Messiahs who rarely come to visit at all, and never stay long when they do. That’s just not good business practice, no matter how you look at it.