DISQUS

John Windsor · 2 years ago

Careful with statistics, Frank . . .

While the "payroll" for Boston finally came through (having to win the final three games to do it), they're now going to face the team with the 25th highest payroll (out of 30 teams) -- a team that has won 21 of 22 straight games.

Meanwhile, the team with the highest payroll (almost as much as the Sox and the Rox combined) bombed out in the first series, and then fired the manager with the highest salary of all managers in baseball.

It's a cruel world sometimes. :-)

Frank Roche · 2 years ago

John, lol....I'm against stats unless they work in my favor. ;-)

I'm really wondering about what would happen if a real company took the high priced approach. I know Netflix is doing it now and I'm going to try to interview them. It's a fascinating proposition. You're right about the stats, though. LOL.

albert · 2 years ago

one word: Google

Frank Roche · 2 years ago

Albert, you got it. Now name another...I'm casting about looking for companies that target the 75th percentile for employee pay...or higher.

albert · 2 years ago

Good question. I only know of Google through all that I've read in the last few years. And they're not just hiring top execs for big bucks, it's the people on the ground actually coding. I wouldn't know where to start looking for the rest.

rick · 2 years ago

I generally agree with your basic concept. I have worked with far too many people who were hired because they were " cheap" and it was reflected in the quality of their work.

Before larger companies go paying at the high end of the market they need to know what qualities make a quality employee for them. Many do not. Pay cannot substitute for good selection, training, environment, etc.

Frank Roche · 2 years ago

Rick, that's the tick, isn't it? Ti understand what makes someone really great. In baseball it's pretty easy to figure out (Read: Moneyball). In business it's a lot softer. It's that old pay-for-performance conundrum: What comes first? And what's "performance"?

Wally Bock · 2 years ago

There are two issues here. The first is: Can a team of all superstars win? The answer is "probably not."

The idea is that you want the best team possible. That usually includes a few special-purpose tools and a few support staff who aren't superstars. For the baseball angle on this, read Moneyball about Billy Beane and the Oakland Athletics.

I was a passionate playground basketball player growing up. I wasn't ever the best play on the schoolyard. But I found that if I was willing to hustle and play defense and pass a lot, I kept getting picked to play by the schoolyard superstars.

When we say we want "the best people," what we should mean is that we want the people who will fit together in talent and temperament to make the best possible team. That leads us to the second issue: "warm body" hiring.

Don't do it. Don't settle. I've seen individual managers do it and I've seen whole companies do it.

What always happens is that you're filling in or checking on the "warm body." It ups your stress level and trashes your productivity.

Philip Reed · 2 years ago

(Yes, baseball aficionados will cite Moneyball, but where are the low budget teams now?)

Frank, since you referred to Moneyball in your comment in a much different context -- in understanding what makes great performers great -- I'd like to clarify an understanding that I have about that book and about the Red Sox.

I've not read the book, but to my understanding the "Moneyball approach" is largely about using certain quantitative analysis in ways that the salty old "baseball people" would find quite surprising -- e.g. valuing on-base percentage more highly than traditionally is done, because your leadoff batter walking is almost as good as him hitting a single. And to my knowledge much of this quantitative reinterpretation goes back to the work of Bill James. Of course Bill James now is a consultant to the Red Sox!

So in my mind, the Theo-and-the-trio era Sox are the marriage of Moneyball with a really huge operating budget. Teams like Oakland have to some extent overcome their lower revenues with smart decisions, but obviously if you pit a rich Moneyball team against a poor one, the difference in money will still tell in the end.

Thoughts? And does that have any real-world implications?

Frank Roche · 2 years ago

Phillip, that's a brilliant analysis. Yep, in Moneyball it was about getting the metrics right. And as you say, the combo of correct metrics with fabulous talent and watch out!

You really have that right. Maybe it's Moneyball for Business. It's the essence of pay for performance and you're right at it.

BTW: Did you see the score last night? 13-1 Red Sox. Wow, those high priced guys paid off.

Thanks much for this thought provoking analysis.

Jaime Fitzgerald @ Fitzgerald · 1 year ago

Philip Reed is spot on...Moneyball tactics (generally speaking, analytics & fact-based decisions) help teams improve their Return on Investment (ROI). But the size of the investment itself (including salaries, management....even the analysis itself!) still matters in the equation.

Your post especially thought-provoking because it highlights the high-stakes decisions at the heart of the professional services business model. The high-stakes decisions you describe are inevitably faced by professional services organizations, whether they recognize it or not. For example, running a consulting firm, a law firm, or even a school demands that we seek ROI on our human capital investments (i.e. what talent to procure, and how to deploy this talent). Like the Oakland A's, AND the Red Sox, hopefully we recognize the stakes when making these decisions, and invest in the analysis to make them well.

Cheers,

Jaime Fitzgerald
President
Fitzgerald Analytics, Inc.
Visit us at http://www.fitzgerald-analytics.com

Frank Roche · 1 year ago

Jaime, it's about the analysis, isn't it. Excellent points here. Thanks for adding to the thinking here. (BTW: I'm still a fan of working with the very best people money can buy.)