Change-Up: How Management of Change is a Critical Success Factor in Business and Baseball

By Toby Reed

So I’m sitting with my family enjoying a hotly contested game between the Yankees and Royals when it occurs to me that both long established industry giants, like the Yankees, and defending World Champion upstarts, like the Royals, are both ultimately faced with the task of finding ways to reinvent themselves to remain at the top of their games. The same is true in business.

Out with the Old, In With the New?

The Yankees, like so many of the long ago established pillars of our economy like Exxon MobilGeneral ElectricJohnson & Johnson and the like, find themselves in an unfamiliar place. They are struggling for relevancy in an ever changing game. A team built on a payroll of $225 Million (2nd highest in 2016) and the success of 27 World Championships, the Yankees now find themselves without a playoff win since 2012 or a World Series Championship since 2009. The Yankees of 2016 have become expensive, old, slow, and in desperate need of reinvention simply to compete in a game they have virtually owned since the days of Ruth.

The Royals on the other hand, an organization who since the middle of 1980’s has struggled to be relevant, had reinvented themselves in 2014. They built a team that was defensively sound, fleet of foot, and young. Sprinkle in a nice starting rotation and a phenomenal relief crew and these guys were formidable. This rendition of the Royals were league disruptors who seemed to have found the secret sauce. The new American League upstarts earned their first trip to the World Series since 1985 in 2014 and punched a return ticket in 2015 to officially TAKE THE CROWN.  Much like the market disruptors in our business economy, UberAirbnbSnapchat, or Spotify, the Royals found success by flipping the script on what it took to be successful in our national pastime.

Keep the Line Moving

No longer did the power 3, 4, and 5 batters muscle their way through a season because “chicks love the long ball”.  The Royals were playing National League style ball in the American League. They were taking the extra base, moving their runners situationally and finding ways to “keep the line moving”. And they are doing it with a payroll that is a very average $143 Million in 2016 (15th highest of 30 MLB teams).  

Sure you will still hear from smaller market teams that Major League Baseball is unfair because the bigger markets have more money to throw at player rosters. But as of today there are still 17 of 30 teams legitimately fighting for a playoff berth. Included in those 17 teams are 8 clubs who do not crack the top 10 in payroll and 3 clubs (Cleveland Indians -#22, Houston Astros-#24, Miami Marlins-#28) who are actually in the bottom 3rd of payroll budget this year. So while I agree it may be tough for Tampa Bay or Milwaukee to compete with payrolls under $55 million, there is definitely more parity in the league these days than we have seen in the past.

So just like the new digital economy, where the internet and its reach has lowered the barriers of entry for so many new startups; no longer can the wealthiest in the room use their war chests to keep competitors at bay by drowning them out with huge advertising budgets or massive store counts. To remain relevant, businesses (and baseball teams) need to innovate and find new ways to deliver unique value for their customers.

So does this leveling of the playing field signal the end for the traditional concerns like the Yankees, Exxon, and the Rockefellers of the business world and anoint young upstarts like the Royals, Uber, and the digital start-up as the successors of tomorrow? Not really.

The ability to change is not an exclusive right of the new upstart. As of the writing of this post the Yankees have shed age from their lineup in favor of a youth movement that has seen them mount a late season surge that has them one ½ game out of the American League Wild Card and General Electric is becoming a disruptive leader in the “Internet of Things” movement. While on the other side of the ledger the upstart Royals now find themselves 4 games out of the American League Wild Card, while Uber is nursing a $1 Billion operating loss for the last 6 months.

Keep Up With Change

So the morale for businesses, and ball clubs alike, is that you can’t rest on your laurels. The landscape will continue to change. And to remain successful we must all be willing to change as well. Businesses who pay attention, stay nimble, and continue to innovate by embracing new technologies that bring their customers unique value will be the ones who come out on top. Those who simply plow forward without recognizing the changes around them will become the cellar dwellers who like their baseball counterparts, will be left title-less and clutching to fleeting hope that things will magically turn around. Leaving their customers listlessly wondering if they should “wait ‘til next year” or find a new ball club to cheer for. 

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