If business could be more like baseball
“The one constant through all the years has been baseball. America has rolled like an army of steamrollers. It has been erased like a slate, rebuilt, and erased again. But baseball has marked time. This field, this game, it’s a part of our past. It reminds us of everything that was once good, and what could be again.”
-James Earl Jones in Field of Dreams
the business of baseball
As spring training begins to wind down and the regular season of baseball begins, I get excited. I love baseball. I always have. But, as I got older, I learned to appreciate it even more. One of the best things about baseball is the fact that EVERYTHING is measured. I recently got to thinking about how great it would be if we could measure key business metrics as accurately and consistently as baseball stats are tracked. If it has any meaning to anyone, it’s most likely measured in baseball terms. I spend a lot of time developing, monitoring and reporting on key performance metrics (KPIs) at work, but it’s pretty hard to get anywhere near the level of consistency (which is critical) that can be found in baseball.
Just like in business, there are certainly hot trends and statistics that come and go in baseball. Currently, OPS (on-base + slugging) is very popular. As a fan, I track OPS more than any other stat, including average, RBI, and home runs. OPS is an outstanding metric because it measures a hitter’s ability to not only get on base, but also to hit with power. Of course, over the last twenty years these and most other numbers have been inflated due to steroids, but hey, it’s still a great comparison tool when you factor in that unfortunate fact. In sales, you might consider OPS the equivalent of total sales + high value sales + retention rate, or something similar.
In business, and especially finance it seems, there are more metrics and ratios than anyone really knows what to make of. But I’m not sure anything in business can be measured with as much precision and consistency as baseball, even with the steroid problem.
The main idea? Treat business more like baseball. Here are five ideas to help you on your way:
1. If you haven’t already, start working on a KPI dashboard. Think of this like a baseball (or any other sport) scoreboard. It can be complex (think modern LED scoreboard) or simple (think vintage scoreboards at Fenway Park or Wrigley Field). Whatever works best for your situation. It is best if all employees have access to this bookmark (see #4).
2. Develop your version of the OPS stat. A “superstat” is a great way to quickly check things at any time. But be warned: if you focus too much on one metric, performance can be artificially skewed toward results that don’t contribute to your overall goals.
3. Measure everything. What is measured is generally improved. I am always amazed at the small plays that contribute to big wins in baseball. In 2004, a ninth-inning stolen base by Dave Roberts paved the way for the Boston Red Sox to win their first World Series title in 86 years. Without that stolen base, the Red Sox would have been swept by the Yankees in the ALCS without ever reaching the World Series. In business, the little things often yield the best results, just like baseball.
4. Provide employees/team members with accurate, real-time performance feedback as often as your situation allows. How many times have you seen athletes looking at the scoreboard during a match? Happens all the time. As a business example, I was once touring a Nucor Steel plant as part of an assignment I was working on. Throughout the plant, small performance reminders were posted for all employees to see. Some of the most relevant metrics were written in huge chalk letters on the walls throughout the floor. As different teams posted better scores, they proudly covered up the old numbers and posted their own, often in large, ornate type. Great idea!
5. Don’t get caught up in the death spiral of measurement error. In baseball, these statistics are everywhere. Slugging percentage is an example. The same goes for business: market share comes to mind. Certain stats can sometimes lead to false achievements and unintended consequences. Be careful not to focus too much on one statistic (see #2), and of course constantly monitor your key metrics to make sure they are actually contributing to your goals and objectives.
additional inputs
There is some irony in my message here. For several years, baseball teams have been trying to build business in baseball, and I’m arguing that businesses need to do more to emulate baseball. To me, that shows how similar business and baseball really are. The introduction of Sabrmetrics, which is an advanced statistical measurement in baseball, has substantially increased the availability and measurement of metrics in the sport. For a great book on Sabrmetrics, read Moneyball: The Art of Winning an Unfair Game by Michael Lewis.