November 10, 2015
Winning By Design
Modern baseball strategy, at least the strategy that has been regularly analyzed, appears to mainly be (i) identifying and forecasting talent and value based on scouting, statistics, or a blend of the two, (ii) deciding how to best use resources, (iii) deciding when to use those resources, and (iv) analyzing in-game tactics such as lineup setting, bullpen usage, pitch sequencing, and the like. The actual implementation of ideas, the parts involving the interaction of people (of coworkers, employees, managers, and investors), tend to get paid less attention. Given the modern history of baseball, this is not surprising.
As people with business degrees from private, northeastern universities began to run MLB front offices, it was unsurprising to see front offices start function like the Fortune 500 companies and investment firms these people were educated to operate, manage, and lead. Specifically, an emphasis on acquiring and recording information for analysis, management, and improvement has become ubiquitous. “If you cannot measure it, you cannot manage it,” had been the mantra of management classes for the past 30 years. Consequently, when these MBAs were asked to manage, they set off measuring; they began acquiring and analyzing information. As each team has become armed with analysts, analytics, databases, data scientists, and computer programmers, having these resources in today’s game has become less about finding market inefficiencies and more about not falling behind the competition.
If all teams are fully equipped, then how can teams differentiate? In today’s business world, where information and analytics have also become more of a need than a differentiator, we are starting to see companies gain advantage through design. They are doing so not just through the design of their products, but also through the application of the concepts of design to their entire business process—a method that Tim Brown, CEO of the revolutionary design firm IDEO—has called “design thinking”. Consequently, the mantra in business schools has begun to change. Instead of preaching resource-minded ideas such as return on investment, shareholder value, and “measure to manage,” business schools are beginning to also teach more design-minded ideas such as customer focus, empathy, collaboration, and diversity.
Whether baseball teams are actively using design thinking or subconsciously using best practices from design concepts, we are starting to see obvious and not so obvious examples in today’s game. It is not unreasonable to hypothesize that the teams that are most effectively using design thinking are the ones that are best able to differentiate themselves in baseball’s post-information asymmetry world.
Design thinking, according to Harvard Business Review, is "a method of meeting people's needs and desires in a technologically feasible and strategically viable way." Baseball teams have several core needs and desires, but they mainly want their employees to perform as well as possible in order to win as much possible in order to make the most profits possible. Obviously, in order to do so, teams want their players to play as well as possible, but they too also want their scouts to evaluate and find talent as well as possible, their coaches to teach and manage as well as possible, and their front office to make decisions as well as possible.
While this seems obvious, this is absolutely more critical in today’s game, where there are fewer and fewer ways to differentiate via talent acquisition. Unsurprisingly, Ben Lindbergh, in writing about the 2014 Saber Seminar, put it best,
“Because record revenues and higher stakes have made front offices so smart, the available edges have grown smaller and more slippery. “It sure felt like in ’02, ’03, ’04, we could more easily create a talent gap between the best teams and the worst teams, and you could more easily count on a bunch of wins before the season ever started,” [Ben] Cherington said. “That feels harder to do now. It feels like talent is more evenly distributed. If that’s the case, then finding ways to optimize player performance and get guys into the higher range of possibilities is more and more important.”
Cherington would go on to reference the need for new innovations and new findings, potentially from the public or from sports sciences. The issue with these solutions is that they are the old solutions (get more information) for a new problem (everyone gets all the information, so having more information is not an advantage).
So, what new solutions does design thinking provide for this new problem? Well, as Lindbergh mentions in the above article (titled Sabermetrics gets Soft), the other keynote speaker—Jeff Luhnow—discussed the importance of baseball’s “softer side,” the importance of effective implementation of these analytical findings. Lindbergh continues,
“…Luhnow wasn’t the only speaker who discussed sabermetrics’ sensitive side. Later on Saturday, Vince Gennaro, the president of the Society for American Baseball Research and the author of Diamond Dollars: The Economics of Winning in Baseball, gave a talk on the same topic. Echoing comments Luhnow had made, Gennaro emphasized the importance of organizational buy-in to analytics-driven innovations, warning that top-down implementation without the proper finesse can lead to resentment, subtle sabotage, and lost opportunities.”
The idea here is that if teams can improve on the standard top-down approach to implementation by using a more design-centric approach, teams will have far greater success, and potentially an advantage over their competition. Moreover, while analytical improvements in today’s game may very well prove to be incremental and short-lived because the competition is now equipped to easily replicate and respond, design thinking, alternatively, provides the potential for new breakthrough innovation that is more difficult replicate.
Over the next couple of days we are going to take a look at the different ways teams might be or could be using design thinking to improve their ability to make changes on the playing field and at the team-wide level. More importantly, we are going to do so with two of the giants of design thinking: Roger Martin and Tim Brown. Martin is a professor at and former dean of the Rotman School of Management, a trusted strategy advisor to the CEOs of companies worldwide including P&G, Lego, IDEO, and Verizon, and the coauthor of Getting Beyond Better and Playing to Win. Brown is the CEO and president of the international design consulting firm IDEO, which, according to Design Matters Podcast Host Debbie Millman, “perhaps more than any other company has expanded the definition of what design is.” He is the author of Change by Design. Also interviewed was Claudia Kotchka, an innovation and strategy advisor who successfully implemented design thinking into the culture and processes of Proctor & Gamble last decade.
On the baseball side, Stuart Wallace, Quantitative Analyst for the Pittsburgh Pirates, and Sahadev Sharma, Lead Writer and Editor-in-Chief for Baseball Prospectus Wrigleyville, were also interviewed. Wallace has the unique opportunity of helping pass down analytical insights to minor leaguers across the Pirates' system. Sharma has had the opportunity to observe and report on the most progressive manager in baseball, Joe Maddon, and the progressive Cubs front office. A.J. Hinch, manager of the Astros, also answered questions via email.
Tomorrow we will discuss the use of design thinking for improving implementation.