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Transactional or Developmental Leadership: How Ned Yost Made the Kansas City Royals Unstoppable

Steve Spear, 10/20/2016

This is a first post from MIT's Steve Spear, which he originally published for LinkedIn. It goes deeper than my earlier entry on theory in sport. What Steve shows is that the focus on finding undervalued players is not as effective as creating an environment where knowledge grows.

Popular notion in baseball is “Money Ball,” the big data, Sabermetrics notion that with a sufficiently large data base of past performance, we can mine/extract accurate predictions of future performance, and those predictions should be what guides our decisions.

It leads to a highly “transactional” view, both of on the field tactics and longer term strategy in building a team’s roster.

But the core assumption is the basis of the inherent limitation in such thinking. It accommodates little change.

For the past to be a reliable enough predictor of the future, situations have to repeat with sufficient consistency and the actors in those situations have to remain largely unchanged.

Big data works in non evolving systems, but if situations repeat infrequently or if the actors in those situations change in important ways, the past is a hint but not a guarantee of what will happen.

In light of that contrast, Kansas City Royal’s manager Ned Yost becomes the baseball counter example to Billy Beane. As described in the a New York Times article, he’s operating with a developmental mindset, not a transactional one.

Put players in situations where the big data says they don’t belong, not because they will necessarily succeed——in fact the article highlights situations where Yost is pretty well convinced they won’t. Instead, Yost puts players in situations in which they won’t necessarily succeed _now_ so they can learn how to succeed in the future. Struggling pitchers left in games to figure out how to rescue them, rookies left in for critical at bats earlier in the season so they are prepared for later-in-the-season pennant race and playoffs.

So, in running organizations and conducting business, which is the superior model——the transactional one or the developmental one?

One can probably make a strong argument that it is some blend——with the transactional one providing context, but with emphasis on the development one.

I think, for instance, of engineering heavy organizations which could, in the moment, take a transactional approach and delegate hard problems to the proven engineering talent. But those with the best track records deliberately carve out some of those challenges for the less experienced junior engineers to maintain a steady pipeline of experienced and talented engineers. There are the process intensive firms that could delegate system redesign to a controlled core cadre of subject matter experts. Instead, they use those SMEs——not as the primary process (re)designers but as coaches and guides so capability is broadened and deepened.

See Steve's book: The High-velocity Edge