Yankee Ingenuity:Management Wisdom from the N.Y. Yankees
What can the Bronx Bombers teach us about building and running an industry-dominating business? That’s the question authors Lance and Dorothy Berger address in their 2005 book, Management Wisdom From the New York Yankees’ Dynasty : What Every Manager Can Learn From a Legendary Team’s 80-Year Winning Streak.
So in a year when the pinstripers have moved into a new Yankee Stadium, when captain Derek Jeter has equaled and will surpass Lou Gehrig for most hits by a Yankee, and when the storied team will return to post-season play, here are the Bergers’ findings in a Dave’s Top 10 List format.
10. Celebrate your history, heroes, and legends, creating and boldly promoting a tradition of excellence.
Companies should create their own Hall of Fame and internally market (i.e. train) the business skills represented by those company legendary figures.
9. Diversify the talent pool and pay people based on their contribution to organization success.
Fixed salaries with almost guaranteed annual increases become satisfiers not motivators. Companies should structure compensation so there is always a component based on achieving individual, division, and corporate objectives.
8. Create a balance of superstars, stars, and solid performers, assessing and classifying employees. But make the superstar the focal point of the organization.
This seems to go against our equalitarian preferences, but real superstars are superstars for good reason: clearly superior talent; leadership qualities; correct instincts in tough situations; and good corporate citizens. These traits need to be encouraged throughout the organization.
7. Establish your talent strategy and fill in the gaps using a well-developed farm system. Train and develop your people.
Successful companies determine the critical competencies required to conduct the business at a high level, then hire and train to those competencies. They make constant individual improvement a virtue and they promote from within.
6. Make everyone on the team a talent scout.
Every employee knows people and encounters new people in their day-to-day activity. Encourage (and monetarily incent) employees to “recruit” potential team members who show the “right stuff” (based on numbers 10 and 7 above).
5. Make organizational competencies the heart of your appraisal process, using qualitative measures as well.
It’s easy to measure quantitative results, and they should be measured since ultimately they represent what you can actually take to the bank. Successful companies put significant emphasis on competencies, i.e. behaviors that when consistently practiced by employees lead to increased productivity and heightened “intangibles,” such as teamwork, accountability, and ownership.
4. Set the bar higher than your people have ever seen it, reflected in ambitious quantitative performance measures (stretch goals).
Every year the Yankees set the bar as high as it can be set—win the World Series. They don’t always get over the bar, but the goal has become synonymous with working for that organization. There is no business equivalent, but every company has the opportunity to identify what the World Series of their industry is and maintain everyone’s focus on that kind of goal.
3. Formally recognize your informal leaders.
Every organization has a formal structure—the organization chart with president or owner on top. But there is also an informal (unnamed) leadership in every company or group. This leadership is made up of the influential employees, who lead by example and performance if not by official title. Other workers look up to them, look to them, and management relies on their results. These performers should be recognized publicly (if not materially rewarded). The recognition spurs them on and motivates others to perform at higher levels so they can be recognized as well.
2. Hire the best frontline managers you can find.
There’s an old saying that sergeants run the Army. Frontline managers are the business equivalent. Put good ones in place. At least two of the past Yankee field managers were initially thought to be losers—Casey Stengel and Joe Torre. Stengel’s teams won 5 straight World Series in the 50s. Torre’s teams won three in a row and 4 out of 5. Frontline managers should be people-oriented and results-driven. Look for the talent that knows how to achieve results through other people, because the manager doesn’t actually play in the game.
And the number 1 example of Yankee ingenuity . . .
- Cultivate ownership values from the top down.
Nothing succeeds like self-interest. And there is no greater self-interest than that of ownership. Companies need to foster the attitude that everyone is a stakeholder—the employee owns the results and the effort to get the results. People need to feel empowered to unleash their skills as if they own the company, and the firm’s success depends on their performance. And it does. Business, like baseball, is a team activity that relies on individual execution. If you have a great day at the plate, but the team loses, you own the loss.
Love them or hate them, nearly a century of Yankee success means something—they do enough of the right things right most of the time. That’s a winning formula for anyone.
