FROM THE COACH: Baseball and business: Rules for measuring success

Richard Tyson 

I've coached youth baseball for over 50 years. In fact, I'm enjoying the opportunity to coach my 7-year-old grandson right now. Between my sons and grandchildren, I’ve coached nine of my family members and hundreds of other kids. For the most part, it’s been an incredible delight for me.

My son is the head coach for the team that his son (and my grandson) plays on, and from the very first practice, my son has established three team rules:

1. Think.

2. Play hard.

3. Have fun.

I’ve added two rules of my own as part of every practice— and every game:

• Each player, and as a team, everyone is routinely asked: “What did you learn?” This takes their thinking from game-time and practice experiences to downloading those experiences into skill development over the course of a season.
• The second rule is to have a short memory. This may seem somewhat contrary to the first rule since we want each player to remember what they have learned. However, since baseball is a game of imperfection, everyone is going to strike out or make errors. If they dwell on those mistakes, they won’t improve. So, while we want them to learn from their mistakes, we don’t want them to see themselves as failures. If they do, they can’t keep my son’s rule No. 3: Have fun.

So, you might ask, “What does this have to do with running a successful business?”

While you might do well in simply applying these five rules in leading your enterprise, a bit deeper thinking will be beneficial here. The great nuclear physicist Enrico Fermi provided guidance in this regard when he said, “If the result confirms the hypothesis, then you’ve made a measurement. If the result is contrary to the hypothesis, then you’ve made a discovery.”

If Fermi was coaching baseball, he would have undoubtedly suggested that players needed to test different hypotheses regarding hitting and fielding to see which ones delivered the best outcomes. That said, he would not have ignored the times that the hypotheses failed. These failures constitute valuable learning discoveries.

Let’s apply Fermi’s insights to a few desirable business outcomes:

• Revenue Growth.

Hypothesis confirmation (measurement): If revenue growth aligns with company forecasts, it confirms that your market expansion efforts are effective.

Contrary result (discovery): If revenue growth fails to meet expectations, you have discovered that your market expansion efforts are not working and that market trends, customer behaviors and/or internal inefficiencies must be addressed.

• Employee Productivity.

Hypothesis confirmation (measurement): If employee productivity meets or exceeds targets, it confirms that your workforce is efficient and resources are being utilized effectively.

Contrary result (discovery): Lower-than-expected productivity, if carefully examined, can discover issues with processes, employee motivation and/or resource allocation. Such discoveries unearth training needs, process improvements and motivational strategies.

• Return on investment (ROI).

Hypothesis confirmation (measurement): An ROI that meets expectations confirms that investments are yielding the expected returns and that resource allocation is efficient.

Contrary Result (discovery): Lower- than-desired ROI should lead to a reassessment of investment decisions and market conditions. This, in turn, focuses attention on discovering more effective investment strategies and a reallocation of resources.

The point here is that every hypothesis, or plan that you enact, is an opportunity to learn — to learn what works and what doesn’t, to use what you’ve learned to zero in on measuring the right things and to discover what needs to be changed.

When you do this effectively, batting averages improve, as do important business outcomes.

And what about the last rule: having a short memory? I would amend it slightly for business purposes. While you want to discover what needs to be changed or improved, your focus should not be on blaming your people for the failure, but rather on improving your processes. Have a short memory regarding who has failed, along with a deepening understanding of what has failed, why it failed and the discovery of how it can be improved.

Batter up!

Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses.