Can Leaders Learn Anything from Baseball?

The Hot Stove was fired up early this year with the new policy of Major League Baseball being anyone who was eligible automatically become a free agent upon the last pitch in the World Series. As a Cardinals Fan, this was a welcome change because it meant that I had an excuse to start paying attention again.

One of my favorite websites for watching what is going on is run by the St. Louis chapter of the Society of American Baseball Research or SABR. Fungoes includes lots of interesting (if you're a stats geek) debates about the values of players and how they compare to other people at the same
position, on other teams, on the same teams and even against retirees and minor leaguers.

The winter's offseason has had me really wondering why we don't have this kind of research ourselves when we're evaluating existing talent and considering who to hire. I started to go down the path of trying to figure out if there was an effective scoring system of statistics that I could create - as that's the #1 thing that baseball has 100 years of and business doesn't.

Maybe these particular stats will get your synapses firing to think more objectively about how you might evaluate your team during the upcoming Employee Evaluation season that typically happens right around the 1st of the new year.

VORP (my personal favorite): Value Over Replacement Player. The number of runs contributed beyond what a replacement-level player at the same position would contribute if given the same percentage of team plate appearances.
RARP: Runs Above Replacement, Position-adjusted. A statistic that compares a hitter's Equivalent Run total to that of a replacement-level player who makes the same number of outs and plays the same position.
Breakout Rate: The percent chance that a hitter's EqR/27 or a pitcher's EqERA will improve by at least 20% relative to the weighted average of his EqR/27 in his three previous seasons of performance. High breakout rates are indicative of upside risk.
Stuff: A rough indicator of the pitcher's overall dominance, based on normalized strikeout rates, walk rates, home run rates, runs allowed, and innings per game.

Obviously, it's not going to be possible for you to come up with the raw data to plug into the formula for STUFF (For the record, Stuff = EqK9 * 6 - 1.333 * (EqERA + PERA) - 3 * EqBB9 - 5 * EqHR9 -3 * MAX{6-IP/G),0}). However, with some creativity, you can come up with some equivalents.

The questions for you:

Do you have some young talent that drives you nuts but has HUGE upside potential?
Do you have someone whose performance was great 3 years ago but they've been sinking since and you've still got them hanging around?
Have you ever thought about something like VORP and considered how worthless or valuable someone on your team is compared to what else is out there in the marketplace?

Comment by James Todd on November 17, 2010 at 4:33pm: Jon, this is a very interesting blog. Jack Welch once said "the team with the best players wins" which is something everyone agree with, however the measurement of performance is often the subject of much disagreement. Billy Bean changed the world of baseball scouting by incorporating fantasy league statistical analysis in his decisions, since then he has made it clear that what he looks for today is very different that what was described in the book "Moneyball", I think the same is true in business, the metrics change year to year, but no matter what stats you use, the same superstars stand out.

Comment by C. B. Stalling!! on November 18, 2010 at 10:22am: Baseball does not build character. It Reveal it !!!!

Comment by Sandra McCartt on November 18, 2010 at 1:02pm: I had to laugh at your questions.

Young talent drives everybody nuts. It's a fine line between killing their go get em' and knocking them out the air every thrity minutes when they know just enough to be dangerous . When i hire a young one, i take a deep breath knowing that i am going to have reinvent the wheel with them as they decide that there is no reason why they can't just call up one of the Big Four and become the end all to be all to the accounting world. It's been my experience that getting young talent to focus on the smaller ones as they learn the ropes instead of spending weeks of wasted time on trying to hit big ones where the seasoned pros will pin their ears back because they have no clue how to play with big boys yet. Sometimes one has to just let them hit the wall in a blaze of glory, pick them up, dust them off and refocus all the enthusiasm.

Nothing tougher than a recruiter who produced well then loses 5 in a row and becomes their own worst enemy. Then in the desperation to make a placement to get out of the slump they shoot themselves in the foot or develop the attitude that when they pick up the phone it sounds like. "You don't want to hire anybody do you.". "I didn't think so, it's really bad out there right now." Time to cut them loose or outplace them before they totally self destruct.

Comment by Jonathan D. Davis on November 18, 2010 at 1:11pm: @James - I had a really interesting conversation a couple of weeks ago with the guy many people consider to be the best sports statistician (alive or dead), Pete Palmer.

I really was trying to figure out if there was a way to assign individual performance metrics to a professional "white collar" worker.

His #1 argument: in baseball, individual statistics are valid because you've only got a pitcher and a batter competing one-on-one against each other.

However, Football is more applicable to the Professional World because it's a true team sport that requires working well with others to be considered exceptional.

He offered this as proof:

Drew Brees: not tall enough, not strong enough, not fast enough

JeMarcus Russell: huge, strongest arm they've ever seen in the NFL, runs incredibly well - an absolute physical specimen.

Evaluated as individuals, you'd immediately want Russell. Compare their results on the field and you'd find that Brees has won the Super Bowl and is a proven leader while Russell is facing criminal charges for drinking "sizzurp".

Bottom Line: when evaluating people objectively look at the body of work, not just the raw potential.

Comment by James Todd on November 18, 2010 at 1:35pm: Jon, I guess it is a matter of perspective. Most of the work I do is with Fortune 500 company's staffing executive development programs, where the emphasis is more on potential vice body of work. Here in North Carolina we have a two sport athlete named Russell Wilson who is the quarterback for the NC State football team and a middle infielder for the baseball team. He just signed a 7 digit deal to play baseball, but would have been a pro football prospect if he wanted to. He is big, he is fast, has a great arm, he is strong and he makes great decisions under pressure. His kind of talent succeeds in just about any sport. Sabermetrics I think is usefull for folks like Billy Bean to determine the starting 9 on the big team, but at the level I often work, we look at fundamentals to determine who is going to be drafted.

Comment by Suzanne Levison on November 18, 2010 at 2:12pm: GREAT Topic. Prior to recruiting, one of my long term meeting/event production client's happened to be "Baseball Winter Meetings" (7 years, various cities) Met lot's of greats, players, front office, owners, media, etc. The sport brings them all in at the Winter Meetings. Political figures, Celebrities, Other Sports figures... (IMO) baseball business is just not conducted the same as corporate life. Always, attitude prevails before statistics follow~that would be the common denominator.

Comment by Jonathan D. Davis on November 18, 2010 at 3:05pm: I realized after writing this that I failed to explain some of the things that I was considering when trying to build out a statistical system.

Feel free to chime in, criticize or expand on these:

1. For a C-Level Exec: Profit/Employee of the company during tenure
2. For Purchasing/Supply Chain: Change in COGS during tenure
3. For Manufacturing: 1st Test Pass, Change Order Costs, Warranty Work charge-backs, customer satisfaction

Sales is easy so I didn't even bother.

Comment by Paul Basile on November 22, 2010 at 9:28am: We have a world of statistics available. We don't really need to build out a new system, although improvements to what we know can and should always, always be sought. Professionals have for decades been analyzing, assessing and collecting data linking traits to performance and results. This is pretty well established science by now - much more established, or at least older, than in baseball (which is much more amenable to meaningful statistics than football) where "Moneyball" is wise and fascinating and, like all statistics, imperfect.

The inherent imperfections in performance-assessment statistics causes people, it seems to me, to abandon them in favor of personal judgement, gut-feel. However, that's like beating the odds in following mutual funds: many people claim to do it, few do.

Comment by Jonathan D. Davis on November 23, 2010 at 10:31am: @Paul - I agree with you that companies have statistics. The challenge I saw was that I didn't see consistent metrics or measurement across companies. That's where baseball has such an advantage - every team, at every level, plays by the same core sets of rules and because of this you can get a much better side by side comparison of Player A vs. Player B.

Comment by Paul Basile on November 23, 2010 at 10:42am: It's true that companies have statistics, but I am referring to something else. We have statistics - all of us, the universe. We have O*Net and collections better than that, with highly consistent metrics and repeatable, reliable, verifiable insights. This, in my view, makes all the difference.

In any case, I also agree that baseball is easier, from a statistics-collection perspective. In baseball the science is simply observe and correlate (even that isn't as easy as it sounds). In business, it's harder to observe (the events aren't so distinct) but we have the advantage of many more years of observation, with scientific analysis techniques and verified assessment instruments. We know, after all of this, quite a lot.

Comment