When the St. Louis Cardinals and Boston Red Sox met in the 2013 World Series, the twenty-five players on their respective rosters rightfully took center stage. The composition of these rosters, though, was the result of the efforts of dozens of people in baseball operations positions who had scouted, drafted, developed, signed, or acquired the players. All of their decision making is analyzed and graded like never before by fans and writers, many of whom feel comfortable second-guessing not just Major League trades but also the drafting of high school prospects. In the end—at least for 2013—the Cardinals and Red Sox front offices found the right players more effectively than their counterparts on the other twenty-eight Major League teams.
Building a championship baseball team, 140 years after the start of the first professional league, remains a challenging task. Regardless of the strengths of any Major League organization, its management is generally competing against other smart, well-motivated people with significant resources of their own. In a direct competition, where every action draws a reaction, there can be no easy recipe for success. Moreover, in an industry where people shift between organizations on a regular basis, it is not possible to maintain trade secrets for more than a short period of time.
Organizations are also dealing with imperfect information when constructing their teams. Which eighteen-year-old draftee will add five miles per hour to his fastball, and which will hit for more power? Which player is ready to be promoted to the Majors, which declining player is over the hill and which will rebound, and which free-agent pitcher is least likely to break down due to arm troubles? The list of things one cannot know, at least precisely, is endless. Nevertheless, teams must make decisions.
Robert R. Bowie, a Harvard professor and a former director of Harvard’s Center for International Affairs, discussed the problem of having insufficient information in a slightly different context: “The policy-maker, unlike the academic analyst, can rarely wait until all the facts are in. He is acutely aware of the contingency of both the setting and the results of his action. He thinks in terms of odds and probabilities, rarely in terms of carefully reasoned analytical judgments or certainties. He is very often under strong pressure to do something, to take some action, even if all the facts are not yet available to him or where a careful assessment of current data would provide useful results.”1
Most baseball franchises recognize these limitations and spend time and money to improve their analysis and decision making, some more successfully than others. However, there is still much that can be learned from studying the history of baseball team building. Looking carefully, one can often identify differences between teams that consistently succeed and teams that struggle. Between evolving organizational frameworks and expanded or better sources of information, some teams have performed demonstrably better than others.
In this book we evaluate a number of successful teams throughout baseball history, along with the significant changes to the landscape that have affected how all teams have operated. We believe that the differentiating advantages that have led to their success, divided broadly between the organizational and the informational, can be grouped into four classes, which are not mutually exclusive.
The first advantage, which could result from luck or design, comes from having a creative, innovative, or simply brilliant person as the team’s key decision maker. New York Giants manager John McGraw was not a great leader or organizer by almost any usual criteria, and it is hard to imagine anyone successfully emulating his style, but he was among baseball’s most successful active baseball executives for thirty years. This may not be a particularly satisfying explanation, and this advantage is certainly less feasible with today’s much more complicated baseball organizations. But once in a great while, a person like McGraw simply has the intuitive feel, internal drive, or overwhelming personality needed to build a collection of players into a champion without a clear organizational or informational advantage.
A second advantage comes about when a team creates a better-designed or better-managed organization. Around 1920 New York Yankees owner Jacob Ruppert was one of the first owners to introduce professional management by hiring what we now call a general manager (GM) and presided over one of baseball’s best-administered organizations for the next twenty years. Similarly, George Weiss with the Yankees of the 1950s, Bob Howsam with the Cincinnati Reds of 1970s, and Bill Neukom with the San Francisco Giants of the late 2000s presided over streamlined front offices with a commitment to excellence from top to bottom. Central to building a top-notch baseball organization are finding, motivating, and listening to savvy scouts, player-personnel people, and, more recently, analytics and video staffs. Almost all great teams have done this better than their competition.
A third advantage comes when a team quickly grasps that there is a shift in the landscape, when new talent or new information is freshly available. In Only the Paranoid Survive, Andrew S. Grove, a onetime Intel chief executive officer (CEO), dubs these transitions “strategic inflection points,” a point in time “when the balance of forces shifts, from the old structure, from the old ways of doing business and the old ways of competing, to the new.”2 Changes within the technology industry, where Grove worked, are usually more dramatic and momentous than those in baseball, but the concept he describes is certainly useful for thinking about changes in baseball.
A final class of advantage can come when a club creates a new approach to managing its baseball operation or takes advantage of circumstances unique to the team (including superior financial resources)—in effect generating one’s own strategic inflection point. To highlight these last two opportunities—taking advantage of a shift in the landscape or effectively finding one’s own new advantage—we devote six chapters to inflection points that are among the most significant in baseball history.
1. the creation of the general manager role in the 1920s
2. the establishment of the first farm systems in the 1920s and ’30s
3. the integration that followed Jackie Robinson’s 1947 debut
4. the advent of the first-year-player draft in 1965
5. the start of player free agency in 1976
6. he rise of baseball analytics in the 2000s
We also discuss several other inflection points that had important consequences, such as the baseball stadium boom in the 1990s, the acceleration of player signings in the Dominican Republic in the 1980s and Asia in the 2000s, and the recent marriage of video technology and high-speed computing.
Many of the most successful teams in baseball history have been ones that either best reacted to the changes to the game or created their own new approach. The best teams in the 1930s (the Yankees and Cardinals) were those that built productive farm systems. Many of the best teams in the 1950s (the Dodgers, Giants, and Braves) were ones that best took advantage of the newly admissible African American or Afro-Latino players. Pat Gillick built the Blue Jays after systematically scouting the Dominican Republic more aggressively than most of his competitors and then put his team over the top by smartly exploiting free agency.
Gabe Paul, blessed with his own experience and great scouts, combined these advantages with the Yankees’ monetary edge to create a great team in New York. Simply having a better idea, such as the incorporation of analytics by the Moneyball A’s of the early 2000s or the early adoption of video technology by the recent Giants, can also provide an advantage, although generally a transitory one, since good ideas will sooner or later diffuse throughout baseball. The more a successful new approach goes against the conventional wisdom and the harder it is to implement, the longer the advantage can last.
As teams have tried to implement the changes discussed above by building stronger, more efficient organizations or by taking advantage of changes in the environment in which they did business, the structure of their organizations evolved as well. Moreover, as baseball has grown as a business, with large increases in both total revenues and the number and variety of sources of those revenues, an increasingly sophisticated organization has been required to manage them. A second and related theme of our book is how the demands of building and managing a better organization inexorably led to increased complexity and size in baseball front offices.
Barney Dreyfuss, owner of the Pittsburgh Pirates from 1900 to 1932, personally kept a journal, or “dope book,” filled with information on young players around the country, and he would often travel to see them play and sign or purchase those he liked. Jacob Ruppert built the Yankee dynasty in the 1920s after creating an organization of talented executives. From the 1930s to the 1970s, men such as Branch Rickey, George Weiss, and Bob Howsam presided over similar organizations, with much success.
Eventually, with the increasing complexity of the business side of the franchise, a team president or CEO typically emerged as ownership’s top front-office employee, and the general manager’s role was relegated to the baseball side. In many front offices the relationship between these two executives became the most important in the organization. The baseball side itself (which is now dubbed “baseball operations”) has become much more sophisticated and complicated with the introduction of advanced data analytics, video technology, and player physiological applications.
The teams we have chosen to examine in this book were not necessarily the best or only example of a particular class of success, but were selected because we felt they best illustrated the way a particular organization at a particular time succeeded in overcoming the prevalent challenges. These teams are among the most successful in history, and in most cases the people who ran them did something new and interesting that was adopted by their competition. Not surprisingly, some of the approaches with which these teams met their particular challenges cannot automatically be extrapolated to a different time and place. Nevertheless, we believe that the stories of these winning teams can offer useful ideas or frameworks for future success.