Peter Drucker's Winning Team
In the summer of 1985, an executive named Peter Bavasi pored over a Harvard Business Review article by Peter Drucker in which the great management thinker described the "widow maker"—a job so inherently impossible that it was apt to defeat even the best and brightest.
Drucker's warning, "Any job that ordinarily competent people cannot perform is a job that cannot be staffed," was especially ominous for Bavasi. He had, you see, just become president of the Cleveland Indians, a sports franchise to which the word "hapless" seemed inextricably tied.
So Bavasi called Drucker to seek his counsel, and there began a relationship that, with the new baseball season just under way, is well worth revisiting for what it can teach all managers (BusinessWeek.com, 04/1/08), whether on the diamond or off.
Wanted: Organizational Expert
The 1985 season, during which the Indians had lost 102 games and won a mere 60, had given way to 1986 by the time Drucker came aboard as a full-fledged consultant. The Austrian-born professor enjoyed watching America's national pastime, and he had even struck up a friendship with Hall of Famer Yogi Berra when the two oft-quoted figures were neighbors in New Jersey in the early 1970s. (Drucker: "The best way to predict the future is to create it." Berra: "Prediction is very hard, especially when it's about the future.")
Bavasi, though, wasn't looking for a baseball guy. He needed an organizational expert, someone who could help teach his entire operation, from the equipment manager in the clubhouse to the skipper in the dugout, how to be more effective at a broad range of tasks. In fact, Bavasi had long been a big believer in Drucker's concept of MBO, or management by objectives.
MBO—by which managers throughout the organization jointly identify goals, clearly define each individual's responsibility for meeting them, and figure out how to measure the results—has had its share of critics over the years. Some, for instance, say the system is difficult to implement and doesn't work well in rapidly changing environments. Drucker, who had introduced the idea in his 1954 landmark The Practice of Management, himself pointed out that MBO was no silver bullet against inefficiency. It works, he emphasized, only "if you first think through your objectives." Yet he pointed out "90% of the time, you haven't."
Assembling the Right Staff
Bavasi, however, found MBO was perfect for a baseball team, in part because the objectives were so unmistakable. "It's a business of absolutes," he told me. "It's win-lose, ball-strike. There's no in-between. There's no maybe." And so he drew up a 450-page strategic and operating plan, which was based on MBO and covered every department of the Indians.
Drucker tempered it slightly, advising Bavasi to make the objectives more qualitative and less quantitative as he moved from areas such as ticket sales to the ball club itself. To hold the manager to an exact number of wins, Bavasi explains, "would have put too much pressure on everybody." Instead, Drucker suggested the Indians concentrate on putting together the right kind of coaching staff that would ultimately lead to more victories.
To that end, he prompted Bavasi and his inner circle—the Indians' manager, general manager, and player personnel director—to think not only about honing the squad's physical skills, but tending to its emotional and intellectual development as well. With Drucker's guidance, Bavasi brought on a Spanish-speaking coach who could relate to his young Latino players. He made sure that one of his coaches was an avuncular sort the players could lean on, while another was tough enough to give them the occasional kick in the butt. "What he reminded us was that if we managed the human aspect," Bavasi says, "it would lead to productivity on the field."
The Hard-to-Manage Players
Drucker (who charged $5,000 a day) wasn't a constant presence. He was teaching in California at the time and would meet with Bavasi and the boys only when they traveled to Anaheim to play the Angels. Nor did he decree anything. Mostly, says Bavasi, "He consulted by probing, asking layers of questions, our answers to which began to reveal new ways of approaching old problems."
Drucker was also "a master," Bavasi recalls, at "creating discussions about certain hard-to-manage players." Among them was relief pitcher Ernie Camacho, who had a penchant for turning in a terrific season, only to follow up with a lousy one.
"Well," Drucker said, "looking at his statistical history we can conclude that he is a regressive personality. We see a lot of that among top-flight computer programmers. They will be given a very complex assignment and write brilliant code. Their next assignment will end up mediocre, sometimes even a disaster. Then they'll write something brilliant. Up, down. On, off. Just like your pitcher."
Bavasi remembers Manager Pat Corrales perking up, sensing Drucker "was about to reveal the answer" to stabilizing the erratic reliever. "Peter," Corrales asked, "what can we do to get this guy to be more consistent?"
"Patrick," answered Drucker, in his formal manner, "the way I see it, there's only one thing you can do." Finally, after a long pause, he said, "You should consider trading this man as soon as you can." (Camacho lasted another year with Cleveland before joining the Astros.)
Bavasi left after the '86 season, and Drucker didn't consult for the team anymore. But while he did, the turnaround was undeniable: The Tribe won an impressive 84 games, and attendance at Cleveland Stadium soared to nearly 1.5 million from just 655,000 the year before.
"Peter had a lot to do with getting us focused as an organization," Bavasi says. "He had us look at everything we were doing to see if there was a good rationale behind it…Peter was our MVP."
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