A B-School Fix for the Biggest Loser Baseball Franchise

The time has come for the Philadelphia Phillies to invest in some more MBAs and tap into the magic of the matrix. The need for sports analytics in baseball

Realistically, the 2014 Phillies club is at best a .500 performer. At worst, it’s a limbo act—how low they can go? Team ownership would do well to adopt MBA-think in order to turn things around sooner rather than later.

What is MBA-think—that staple of all leading business schools? It is framing strategic issues within 2-by-2 matrices in order to yield both/and, rather than either/or, solutions. 2x2 matrix

Three 2-by-2s are key for baseball franchises: (1) incumbents versus outsiders; (2) money versus talent evaluation; and (3) scouting versus analytics.

The first and overarching grid is the source of leadership and management: incumbents vs. outsiders. Yes, continuity matters. Trust is a function of years of working together—internal collaboration. But any organization that does not embrace external competence will implode. Former Phillies General Manager Pat Gillick came in from the outside and was instrumental in guiding the team to its 2008 World Series title. But there have been precious few outsiders at the top reaches of the Phillies organization before or after Gillick. The team desperately needs more.

The second essential matrix is money vs. talent evaluation. These two variables account for most Major League Baseball teams’ success or failure. Historically, the Phillies had been low/low. Then they became good at talent assessment and developed a core group of players—led by Jimmy Rollins, Chase Utley and Ryan Howard—who in 2008 helped to bring Philadelphia its second World Series championship in the Phillies’ 131-year history, and the team’s first since 1980.

A glaring problem now is a product of the club’s having re-signed this core group when it was clear that the players’ best days were behind them. MLB players peak at 30 years old, plus or minus one, two or a few; after that, fast-twitch reflexes and robust health decline. A related problem is the various trades that the Phillies engineered for relative oldsters, most notably Roy Halladay and Cliff Lee (twice traded for), which gutted the farm system of youthful prospects. So what we have now is a passel of yesterday’s stars combined with a run-of-the-mill rest-of-the- roster with scant tomorrows in sight.

Bottom line? The Phillies demonstrate a readiness to spend, but an inability to grade present-day talent and legitimate prospects—and therefore have a dearth of either.

The third and final 2-by-2 is a subset of, and input for, the second (player evaluation): scouting versus analytics. This challenge is how to maximize the value of both methods of player evaluation. The Phillies never have been leading-edge at either of these tasks—particularly sports analytics—or for that matter, much else (they were the last National League team to integrate African-American players). The low-budget but winning Oakland Athletics under general manager Billy Beane, whose use of analytics was popularized through Michael Lewis’ best-selling book turned movie Moneyball, realize the importance of each realm—and have actually increased their scouting budget as they continue to parse relevant big data.

So there we have it:  three 2-by-2 matrices that help explain the decline of a professional sports franchise, and offer hints for turnaround. Granted, that’s more easily said (and drawn) than done. But by seriously addressing these puzzles, the Phillies, and every other organization—sports, corporate or otherwise—can load the dice for success.

Editor’s note: As of June 12, 2014, the Phillies owned a record of 28-36 and were seven games out of first place in the National League East Division. David Montgomery, C’68, WG’70, the Phillies’ general partner, president and CEO, is one MBA already on the team’s roster.

 

 

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