We're thinking of adding a new course to our curriculum this spring: Boston Red Sox 101.
Too much champagne you say?
Well, it's true that normally a management school like MIT Sloan wouldn't think of using an organization that takes 86 years to achieve its ultimate goal as a positive teaching lesson. But Boston's historic World Series victory--and the way the team meshed quantitative and qualitative elements all season to achieve it--is a case study of business and managerial success.
To start, the way this Red Sox team was constructed during the off-season proves that numbers do matter. By fielding interesting and competitive teams for years, the Red Sox organization has secured a devoted fan base spread across New England and beyond. These fans feed ticket sales, broadcast and cable contracts and other revenue streams that have enabled the team to assemble one of the highest payrolls in baseball.
At the same time, the Red Sox proved the importance of clever and careful quantitative analysis before making major investment decisions. Adhering to the "moneyball" philosophy, the Red Sox paid more attention to hitters' on-base percentages than their batting averages. Similarly, even if a pitcher's actual win-loss record wasn't too great, the team's interest might be piqued by data showing that he got batters to hit a lot of ground balls.
The Red Sox combined the resources to sign high-profile players with the statistical smarts to do so intelligently. The team also made a series of lower profile but clever moves to fill out its roster with affordable talent who became essential role players. But all this number crunching and signings would have mattered little unless all the parts meshed into an effective machine. And that involves not only leadership at the top, but commitment and dedication across and among all levels of the organization.
Red Sox Manager Terry Francona was dubbed a "players' manager," which sports reporters thought was a good thing when the team was playing well and dubbed a weakness when it wasn't. In fact, Francona understood the importance of consistency and of creating an environment that encouraged mutual respect and positive attitudes. Ownership can assemble a great team on paper, but the manager's role is to make those players perform as a group over the course of a long, tiring season, to make the most of what each player brings to the table.
Effective as he has been, Francona is not the only leader of this team. Other players--often quietly--were able to bring out the best from each other, and not just on the field. In the clubhouse, Pedro Martinez would help keep the team loose; Curt Schilling drove others as he drove himself; and in the first lackluster games of the American League Championship Series against the Yankees, lead-off hitter Johnny Damon was willing to publicly put the weight of the team's collective failures on his then-slumping shoulders. No matter how good Francona was as the manager, it would matter little unless the players were just as concerned with making the team work well and were willing and able to play diverse leadership roles.
If the Red Sox succeeded in proving the management lessons of solid analysis and strong, across-the-board leadership, the team has also learned to "turn the page," as Manny Ramirez has put it. Dominant organizations tend to become complacent, and organizations that have been frequent losers tend to become defeatist. Successful or not, any organization that doesn't relentlessly look forward is in trouble. This Red Sox team was able to put the past behind them and look forward. They looked beyond the curse.
Of these management lessons, only "moneyball," is relatively easy to teach. A hard data analysis, for example, would in itself make a strong case for signing catcher Jason Varitek to a new Red Sox contract. But Varitek also has enormous--if harder to quantify--value as a team leader. Every day, managers face this challenge of balancing quantifiable and qualitative factors. If they follow the lead of the 2004 Red Sox, they might have a shot at their own bit of history--and better yet, the knowledge that goes along with it.
Richard Schmalensee is the John C. Head III Dean at the Sloan School of Management. This opinion piece appeared in the Nov. 2 issue of The Wall Street Journal.
A version of this article appeared in MIT Tech Talk on November 3, 2004 (download PDF).