Over-reliance on old methods Afraid to make mistakes Poor talent evaluation Few self-checks One bad...

Over-reliance on old methods› Afraid to make mistakes

Poor talent evaluation Few self-checks

› One bad contract kills a team

Anything that prevents a team from reaching its potential› Overpaying for talent› Injuries› Age› Unrealistic expectations

SELF-INFLICTED

Sensitivity to Operations Preoccupation with Failure Deference to Expertise Commitment to Resilience Reluctance to Simplify Interpretations

Everyone understands the big picture Knowledge sharing throughout

organization System-wide knowledge of operations

MLB teams have no top-down identity Teams are thrown together

› No attention to cohesiveness or culture Moves are made based on whims

› Reactions instead of proaction

All teams should have a core identity› Young players› Forward-looking statistics

Teams should communicate its policy with players

All members of organization should have the ability to offer suggestions› Players› Front office staff› Stadium concierge staff

Failure is always possible Small mistakes may become

catastrophic Active evaluation of operations

› Identify errors before they happen

Teams routinely shoot themselves in the foot› Improper evaluation of talent› Bad contracts› Ill-conceived signings› Poor talent evaluation

Teams think too much about what could be› Not enough about what actually is

The mistakes of today have tremendous future consequences› Instant gratification

Contract year syndrome

WAR: Wins Above ReplacementAverage Starter: +2 WAR

Make sure all talent fits the bill› Don’t force square pegs into round holes

Only sign affordable talent› No aging/injury prone players

Consider intangibles› Media pressure› Ability to handle success/money

Decisions should be made by people with the most relevant expertise

Those with the most knowledge make the decisions regardless of rank

Blindly following the hierarchy can lead to mistakes

Baseball talent evaluation favors the wrong stats› Wins› RBI› Batting Average

Teams are unwilling to embrace new methodologies

Teams act before they think

Bring in stats experts from outside of baseball› New perspective

Incorporate new stats› New methods + common sense

Give the “numbers guys” a voice

On-Base Percentage (OBP)› Patience and discipline

Ultimate Zone Rating (UZR)› Advanced look at fielding

Batting Average on Balls in Play (BABIP)› Quantifies luck for pitchers

Wins Above Replacement (WAR)› Measures a player’s true value

Position Old New

Hitting Batting Average On-Base Percentage

Defense Errors Ultimate Zone Rating

Pitching Earned Run Average

WHIP ((Walks + Hits)/Innings Pitched)

Overall Value

None Wins Above Replacement

All errors cannot be prevented Minimize the escalating consequences

of unpreventable errors Anticipate errors

› Don’t be caught by surprise

Most people believe defects cannot be predicted

Teams quickly stray from plans when adversity strikes› Rebuilding efforts› Financial responsibility

Teams listen too much to outside sources› Media› Fans

Record: 69-93› Last in AL East› Worst season in franchise history

Opening Day Payroll: $173,186,617› Traded $73 million of salary during season

2013 Outlook› “I know that we'll have a very strong payroll, a

large payroll… I'm confident in saying that we'll be amongst the larger payrolls in the game.”

–Ben Cherington, Red Sox GM

Tunnel vision› Stick to the budget› Keep statistical analysis above all else› Don’t listen to critics

Communicate plan with fans› Treat fans like shareholders› Convince them to buy into your plan

Don’t accept simple answers to complex questions

Drill down to find the real heart of the matter

Teams often act impulsively› “Gut” feelings

Focus on getting “a” player instead of “the” player

Whack-A-Mole mentality

Bring in only necessary players› No “second choices”

Focus on the whole team› Not just one position

Look for new ways to interpret data› Advanced stats

Revenue Sharing› Every team gets a piece of a leaguewide

pool› Teams don’t have to work to make money

Miami Marlins

TV Money› Teams receive tens of millions each year› Payments have increased exponentially

2010› Declared bankruptcy› Reached World Series

Payroll: $55,250,544 Payroll Rank: 26 out of 30

› Signed 20-year TV deal Pays $80 million annually

2012 Lost Wild Card play-in game

› Payroll: $120,510,974› Payroll Rank: 6 out of 30

Declared bankruptcy in 2011› Taken over by Major League Baseball

Purchased for $2 billion in 2012› Previous record purchase: $700 million

(Chicago Cubs, 2009) Payroll

› Start of 2012 season: $95,143,575› Current payroll: $198,314,286

TV Deal› Negotiating with Fox Sports› Rumored Deal: 25 years, $6 billion total

High reliability is the way of the future› Yankees: 1 World Series since 2000› Rays: 3 playoff appearances in last 5 years

Patience and smarts trump money Embracing HRO now is ideal

› TV money has potential to ruin baseball› Teams must be smart with added funds