Management Wisdom from the New York Yankees' Dynasty by Lance A

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Management Wisdom from the New York Yankees’ Dynasty What Every Manager Can Learn from a Legendary Team’s 80-Year Winning Streak

By Lance A. Berger and Dorothy R. Berger Published by John Wiley & Sons, 2005 ISBN 0471715549

Introduction and a few others, “buying” superstars has played a Whether you love the New York Yankees or hate small overall role in Yankee history. In fact, al- them, it’s clear to anyone who looks at their history though they acquired stars from other teams, they from an objective, business perspective that they purchased no existing superstars from any other aren’t just another sports team. Something about major league team after the acquisition of Babe the Yankee organization enables them to win Ruth and Waite Hoyt from the Red Sox in the early decade after decade, despite changing players, 1920s until they outbid their competitors for pitcher changing owners and changing managers. Catfish Hunter in 1974, when the era of free agency The reason is a set of 14 principles that repre- blossomed. sent the Yankees’ best management practices. The Over the eight-decade history of the dynasty, principles emerged in the 1920s under the leader- most of the Yankee greats were actually home- ship of owner Jacob Ruppert and have been devel- grown and developed within the organization. The oped and refined by later owners and managers reason the Yankees’ payroll is so large is that high ever since. salaries are required to keep great players after the To adopt these principles, however, you must Yankees discover them and turn them into super- move beyond the common myth that the Yankees stars. Mickey Mantle was plucked up by astute win because they have deep pockets that allow scouting right after high-school graduation. Lou them to buy the best players from their competi- Gehrig was signed while playing for Columbia Uni- tors, dating back to Ruppert’s purchase of Babe versity. More recently, Derek Jeter, Bernie Williams, Ruth from the Boston Red Sox. While it’s true that Mariano Rivera and Jorge Posada came up under George Steinbrenner the Yankees have had through the farm system. the biggest payroll in baseball, offering big salaries As well, dynasties are built on much more than to lure superstars from other teams is only one a few superstars. For example, the rosters of highly component of their overall strategy and culture. paid players failed to reach post-season play between 1965 and 1975 and then again between Beyond Buying Superstars 1982 and 1994. The reason is that the Yankees did- The reality is that with the exception of Babe Ruth n’t follow their own principles during those periods.

The 14 Principles nized team leaders. For the Yankees, those were the The Yankees are a superstar team rather than a eight captains, chosen because: team of superstars. With a reasonably competitive pay- • Their accomplishments exceeded the accomplish- roll, your organization can be a top contender in its in- ments of their peers. dustry by more efficiently applying the 14 basic Yankee • They inspired others to superior performance. success principles: • They embodied the organization’s core values. 1. Leadership establishes the foundation. Most • They were recognized and respected as team Yankee owners brought an opportunistic spirit to the leaders by their teammates. team and added their special touch to the Yankee tradi- Players needed to meet all of those requirements tion. In particular, they communicated the importance of before management would bestow the title of captain. At being number one. That has been translated through the times there was no Yankee captain because no player people they chose to run the team to the players them- lived up to the role. selves. Interestingly, none of the dominant field man- 4. Set the bar higher than your people have ever agers who operated during the dynasty had previously seen it. Every organization must have clear and estab- won a World Series, but collectively with the Yankees lished winning standards for the organization as a whole, they won 24 world championships and 34 league pen- and for each employee. Everyone must be clear as to nants. That came about because they embraced the val- what constitutes winning. For the Yankees, winning is ues of the principal owner. equated with a world championship. Team success, of 2. Hire the best front-line managers you can. The course, is also measured by the size of the fan base rela- first-level manager in any organization represents the key tive to other baseball and sports teams, and whether the formal figure. He or she is the face of the organization team is selling out the ballpark, dominating the airwaves that employees see every day. With the authority of the and selling its various products. The Yankee goal, there- owners, the first-level manager plans, organizes and/or fore, is to put the most competitive team on the field, not integrates a function or a set of employee activities. The only to win championships but also to attract and retain first-level manager must possess all the professional, cit- the greatest number of fans. izenship and leadership competencies exemplified by Baseball is a game where many aspects of player ownership to help your organization create and sustain performance are easily measured. The Yankees have excellence. measures of individual success based on contribution to Yankee field managers have had a passion for the team achievement. Employees know the behavior and game, a tenacious desire to win, and the potential for suc- accomplishments that are expected of them, how that cessfully managing the Yankees. They’ve been skillful tal- contributes to the organization achieving its goals, and ent managers and straight that organizational triumphs communicators. They’ve Cheap e-Learning? take precedence over indi- picked a cohesive, knowl- vidual stardom. Sorry — we haven’t found it either! edgeable coaching staff to 5. Make organizational train and develop the play- But we can turn your boring, black and white competencies the heart of ers. They’ve been strategic training binders into engaging, interactive, full-color your appraisal process. eBooks and deliver them digitally on CD, Internet risk takers. They’ve recog- Competencies are the ob- or intranet for about the same cost as the binders. nized the importance of servable and measurable Ask us for samples of what we’ve done building their team around a skills, values and behaviors for clients like Benjamin Moore. superstar and have focused that contribute to enhanced on cultivating superstars’ Custom Publishing Services by employee performance and contributions. execuBooks organizational success. 3. Formally recognize Media That Means Business Competencies must be your informal leaders. Toll-free: 1-866-888-1161 clearly defined, articulated Each company or team E-mail: [email protected] and embedded throughout should have formally recog- your organization. In busi-

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ness they consist of such • Make sure everyone factors as an action orienta- Running Out of Corporate on the team is rated as at tion, communications, cre- Gift Ideas? least a solid player. ativity/innovation, critical Every organization judgment, customer orienta- When the pen, calendar or desk clock should classify its own em- tion, interpersonal skill, lead- just won’t do, give the gift of knowledge! ployees and identify its own ership, teamwork and tech- Stand out from the rest and offer key positions, applying a nical job expertise. The your clients execuBooks. The corporate gift Yankee-like strategy. minimal standard for all Yan- that keeps on giving week after week. 9. Create a solid farm kee competencies is “ex- system — train and devel- ceeding expectations for the execuBooks op your people. Since average level of peer players The Easy Read to Succeed 1929, one of the primary on a competitive team.” Toll-free: 1-866-888-1161 reasons for the continuation 6. Make everyone on E-mail: [email protected] of the dynasty has been the the team a talent scout. farm system. Through The Yankees have a formal global network of scouts, but minor league teams, talented young players are devel- everyone on the team realizes the necessity of keeping a oped, their skills are honed, and they learn the values of steady flow of talent to the major league club. Individual the Yankee organization. In your own firm, you should players are always contacting players on other teams view each organizational level as a part of a farm system whom the Yankees are trying to trade for or sign. Your in which employees are identified early in their careers, organization can expand its scouting field beyond the developed to their optimal abilities and moved to higher formal conduits by instilling talent assessment and levels as positions become available. scouting as an organizational value. Employees must un- 10. Pay your people based on their contribution to derstand their potentially critical role in bringing fresh tal- organizational success. Babe Ruth said, “Someday ent into your company. every player will be paid his true worth.” With the death 7. Create a balance of superstars, stars and solid of the reserve clause that bound players to a team, their performers. Although detractors say the Yankees win salaries rose, and today a player’s salary should be because they’re a team of all stars, in fact there aren’t based on his contribution to the team. enough superstars in the baseball pool — or the talent Your organization must remember the first principle pool you compete in — to buy and field a team of only of compensation management: not spending more than superstars. The Yankee dynasties have been developed you can afford. The second principle is spending what around a blend of players at varying performance levels: you can afford wisely to obtain a sustainable competitive superstars, stars and solid performers. The Yankees advantage. continually classify and reclassify players and use those 11. Make the superstar the focal point of your or- categorizations to create a dynastic team with the right ganization. Superstars are in short supply and their blend of talent. Every organization, including the Yan- value to the team is immeasurable. The superstar’s pres- kees, has finite dollars to spend on its workforce, so it ence alone inspires confidence. When he’s absent from must use its money wisely. the starting lineup due to injury, heads begin to droop in 8. Establish your talent strategy and fill the gaps. the dugout and mistakes are made on the field. The Yankees build a continuous inventory of players, in- Make sure your organization has a strategy for court- side and outside the organization, which allows them to ing superior people. Track as many as possible of your implement a unique three-point strategy: competitors’ current and potential superstars and stars, • Identify and retain superstars in the organization especially in your key positions. Know the best sources and/or acquire them from competitor organizations. of recruitment for superior people. And make absolutely • Ensure the key positions of pitcher and catcher — sure you don’t lose any of your superior people. known as the battery — has at least star and potential 12. Diversify your talent pool. The failure of the Yan- star backups. kees to expand their pool of diverse players in the 1940s

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and ‘50s reduced the number of superstars and stars ble, clear and practical processes that the organization available to the team in the late ‘60s and ‘70s. This must follow to reach its goal. Perhaps the two critical shortsightedness contributed to the Yankees’ first dark processes are the talent evaluation system, consisting of age, from 1965 through 1975, when the team failed to well-defined selection criteria and superior talent re- compete in post-season play. Today the Yankees are a cruiters, and an organization-wide talent development blend of African-American, Latino, Asian and Caucasian system that provides a steady stream of high-quality re- players. There are no restrictions on where the team will placements. search for talent — and the same should hold true for Third, there must be a conscious effort by leaders to your organization. create and sustain a culture where employees are moti- 13. Celebrate your history, heroes and legends — vated to establish personal goals that derive value from create traditions of excellence. The Yankee organization their contribution to organizational success. e has gone to great lengths to promote its history and tradition of excellence. The Yankees tell their stories, pub- ABOUT THE AUTHORS: Lance Berger has served as a con- licly celebrate past heroes and legends, and use their sultant to Major League Baseball. He specializes in talent past successes to persuade current and prospective management, change management and compensation. players to believe that they’re destined to win. Dorothy Berger is a consultant in talent management. Take pride in your organization’s past. Every organization has its unique history, values and skills. Your company’s owners, top executives, managers and superstars Related Reading are transmitters of your company’s “way.” Document The Talent Management Handbook: Creating Organization- your company’s history and tradition in reading materials al Excellence by Identifying, Developing, and Promoting that are distributed to employees, potential hires and Your Best People, by Lance A. Berger and Dorothy R. customers. Use employees’ accomplishments, both at Berger, McGraw-Hill, 2003, ISBN 0071414347. work and in the community, to promote employees and, through established goodwill, your organization. The One Thing You Need To Know ... About Great Man- 14. Boldly promote your tradition of excellence. aging, Great Leading, and Sustained Individual Success, The Yankees promote their winning tradition with fans by Marcus Buckingham, Free Press, 2005, ISBN and the media through associating the Yankee brand 0743261658. with winning and becoming an employer of choice. They’ve used colorful and committed hucksters — such Confidence: How Winning Streaks and Losing Streaks as Mel Allen, the voice of the Yankees on radio and tele- Begin and End, by Rosabeth Moss Kanter, Crown Busi- vision from 1939 to 1964, and the team owners — to ness, 2004, ISBN 1400052904. spread the message. Know what you’re promoting in your own organization and identify, encourage and turn loose your best hucksters to shout your company’s mes- execuKits! sage and accomplishments. Want to run an engaging and effective workshop for your team on an issue covered by execuBooks? Conclusion Try execuKits: turnkey toolkits for 60-minute work- Those 14 principles cover the three factors that the Yan- shops! kees use to achieve success: leadership, processes and With these all-inclusive kits, busy team leaders can culture. easily and efficiently organize powerful knowledge and First, you must establish a strong and pervasive skill development events for their teams. The kits incorpo- leadership structure, beginning with the owner who can rate proven adult learning principles and contain con- credibly influence employees to achieve a defined goal cepts drawn from the best minds in business — like those for competitive success. found in execuBooks. Second, the organizational goal of the leader must Contact us for a catalog and more information at 1- be translated into a road map comprising a set of credi- 866-888-1161 or [email protected]