Change is Hard, Part….

Imagine you are Roger Goodell, Commissioner of very likely the most successful sports league in world history, the National Football League.  By any measure, you should be happy — delighted, even ecstatic.  Money is literally pouring in from more sources than you can keep track of — TV, cable, radio, multimedia, direct corporate sponsorship, computer games.  While other sports talk about eliminating teams, you’re planning to extend to other continents.  You just had one of the most dramatic Super Bowls in memory, and like most Super Bowls it drew more interest and money from both advertisers and consumers than any other televised event of the year.  Television networks fawn over you, because your sport remains as the one piece of broadcasting which can reliably attract enough viewers at the same time to keep the entire network/ affiliate structure in place.  You survived a possible labor war to win a broadly accepted 10-year deal with your players, giving you long-term stability other sports leagues can only dream about.  And NFL owners — your bosses — have just rewarded you with a rich new contract that makes you the highest paid and most powerful single figure in all of American sports.

And yet you worry.  You know that the NFL’s fortunes depend on its acceptability to the American television audience, and in the eyes of advertisers, that increasingly means women.  Women, your research shows you, enjoy the speed, the athleticism, the strategy, the drama at the heart of the typical NFL game.  But they’re not so caught up on the extraordinary violence of the sport, particularly when that violence — as is being shown by medical studies — can lead to debilitating brain injury.  No viewer, male or female wants to be a part of this; no corporate sponsor wants to be seen as subsidizing the devastation of young men’s brains.  We’re already seeing evidence of this in the decline of tackle football among teenagers.  Even Troy Aikman, a Pro Football Hall of Fame quarterback with the Dallas Cowboys (and whose own career was cut short by concussions), refuses to allow his own children to play organized tackle football.  If this trend continues, you fret, within a generation professional football could well become like professional boxing, a once-dominant sport now only seen on pay TV or cable.  Past success is no guarantee of the future.

So, Roger Goodell, you’re living well but on a knife’s edge.  On one hand, violence is so deeply ingrained in the sport’s culture and historic appeal it’s almost impossible even to moderate it.  You’ve tried this past year by taking on the most damaging head-to-head hits, particularly when the offensive player isn’t in position to avoid the contact.  You’ve fined dozens of players, some even beyond $100,000, and you’ve even suspended a few for particularly egregious hits.  You’ve made player safety your signature issue as Commissioner, funded serious medical research into the long-term effects of concussions, and pushed the adoption of safer helmets.

But, you’ve learned, change is hard.  Your players disdain you for forcing them to change a whole style and philosophy of play that in most cases goes back beyond high school, and for punishing them in a way they see as arbitrary and high-handed.  Many of your coaches see you as attacking the purity of their sport, like substituting pastels for bold colors.  And most likely, even an owner or two has had their doubts: We’re going great — could Rog be screwing it all up?  Change is hard enough when a clear crisis makes it unavoidable; when things on the surface are going well, it’s nearly impossible.

So when you hear a report from your top league investigator that a top defensive coordinator has organized and subsidized a bounty program that rewards his own players for actually injuring opposing players, you say:  This is terrible.  Is this who we’ve become?  Players being paid to cripple other players? 

And then, in the privacy of your office, you pump your fist in triumph.  YES!!      This is good news, and even better that the coaches involved have confessed and there’s no disagreement about the basic facts.

Because now, and only now, do you have a stick for driving change.  Morally, you’re on the right side; no one can defend paying players specifically to harm other players, even though it’s been going on in the league for decades.  And you have the authority to do something about it which will emphasize the importance to everyone of accepting your new vision of safety.  The players most deeply involved will almost certainly be suspended for several games, costing them a big part of their paychecks; the coaches and team executives will likely be suspended more, even as much as an entire year; the team will lose the draft picks that any NFL franchise depends on for new talent.  No team, no executive, no coach, no player will want to meet the same fate.

Just as important, you’ll have a win under your belt.  If the penalties are severe enough (and the reaction of the press after the investigators’ report was leaked has made it nearly impossible for them not to be severe enough — think that was an accident?) you’ll will be widely praised for aggressive, responsible decision, and the positive press will enhance your popularity with the owners; you’ll also be able to tell TV executives and nervous advertisers that you’re on top of the safety issue.  Players will draw some satisfaction that they’re not the only ones being punished.  Ultimately, your authority to go after other threats to player safety will be stronger, and your broader vision of physical but safe football will have some more body and some more teeth.

All of which makes you wonder to what extent Goodell (sorry, you’re not the commissioner anymore) actually wanted this story to come out.  It had its roots in an NFC Championship game two years ago between the New Orleans Saints (which operated under the bounty system) and the Minnesota Vikings, in which the Saints hammered Vikings quarterback Brett Favre on nearly every play.  The Vikings’ coach complained to the league that the Saints were handing out bounties to get Favre out of the game, which launched an investigation.  The investigation stalled when the Saints’ coaches issued blanket denials, and only revived when new information became available.  Ultimately thousands of documents and emails were reviewed; this was not an effort to sweep bad news under the carpet.  You have to wonder — did the information simply surface, or did the Commissioner’s office apply pressure to extract it?  How badly did they want it?  And who leaked the investigators’ report to the public?

Change is hard.  Sometimes it’s only possible when there’s bad news, even humiliating news, that shows that the status quo isn’t acceptable anymore.

In Praise of Grump.

The NFL Network last night ran the first of an NFL Films two-part special on New England Patriots head coach Bill Belichick.  Belichick is certainly the most successful coach of his era — he’s won three Super Bowls as a head coach, two as a defensive coordinator, and two of his game plans are in the  Pro Football Hall of Fame.  He’s also the most enigmatic.  His press conferences are studies in revealing absolutely nothing, his vocal range rarely goes beyond a monotone, and his signature wardrobe for game day is a hooded sweatshirt with the sleeves cut off.  He doesn’t look or sound like what anybody expects of a head football coach.

The special is based on nearly round-the-clock closeup footage of Belichick during the 2009 season.  Belichick and the Patriots organization gave NFL Films complete access to shoot and record anything and everything in the coach’s life, trusting that the producers (who work for the league and have no incentive to make anybody look bad) would show the proper discretion.  And so we see Belichick everywhere — on his boat, in training camp, in meeting rooms, on the sidelines, breaking down film.  It’s an exhaustive look at what life as an NFL head coach is like.

The common perception about Belichick is that he’s a data-crunching automaton, devoid of warmth or emotion, and to many the show’s biggest surprise is that he actually does have a personality — understated but funny and sincere.  What impressed me, though, was how relentlessly negative he is, and I mean that in a good sense.  He doesn’t try to inspire — there are no rah-rah speeches.  He doesn’t grin with glee when anticipating how a particular gameplan will stifle an opponent, he doesn’t gloat after big wins, and he is brutally candid when assessing his team’s own weaknesses (If a rival team is able to shut down his two top receivers, he says in a coaches’ meeting, “We’re done.  We’re done.”).  Even when he’s trying to get his team to celebrate big plays, he sounds like a grump.

But this very trait allows him to adjust to bad news.  Because there’s no gloss of optimism, he doesn’t risk losing credibility when a game goes badly.  Because he’s relentlessly indifferent to excuses (the weather, bad officiating, plays that go bizarrely wrong) he forces attention on what he and his team did badly, and because he holds himself and his coaches as accountable as his players, no one feels scapegoated.  Accordingly, he’s able to pinpoint the flaws and fix them, quickly.  And his track record is good enough for players to know that if they do what’s expected of them, a Super Bowl championship is never out of reach.

This is in stunning contrast to political life, where this kind of candor is almost unheard of.  Presidents notoriously live in bubbles of enablers and sycophants, but Belichickean-level candor is rare in Congress as well.  I sat through dozens of Congressional leadership and conference meetings, and  rarely did I hear anyone say:  “We are doing a lousy job at x and need to get better.”  There seemed to be an unspoken code that self-criticism undermined the credibility of their own leadership, that some obstacles were inevitably impossible to overcome (press bias, a bad economy, bad Presidential poll numbers), and that any proposed change in direction would generate more internal criticism and bickering than positive change (there is a lot of truth to the last of these).  When I was on the Hill, now-Speaker Boehner would try to shake this up but the overall culture seemed immovable.  (I should note that although I saw this with Republicans, I’m sure it’s also true of Democrats.  Nancy Pelosi has never impressed anyone as someone who heard bad news with a smile and a thank you).

Part of this is no doubt true because success and failure in Belichick’s NFL happen on a weekly basis and elections only happen every two years.  But it’s also true because people expect political leaders to be optimists and to be inspiring — to tell us, their followers, what we want to hear, with passion and commitment.

I’d suggest that part of why politics is so polarized is this basic difference.  Brutal honesty in the Obama White House would have counseled for a much smaller health care bill in 2009 and an overarching agreement with John Boehner’s Republicans on the debt limit, entitlement spending, and tax reform.  Brutal honesty in Congress during the Bush Administration would have highlighted Republicans’ obsession with fundraising and wedge issues while also neglecting fundamentally critical substantive work like oversight (Katrina happened in part because no one ever held New Orleans accountable for having a legitimate emergency plan, and rarely was there a whimper over the Bush Administration’s lack of a post-military plan for Iraq).  Honesty would argue that long-term political success has more to do with broadly established leadership credibility than with mobilizing either party’s base.  And honesty — however grumpy — remind people that no matter how great that week’s success, next week’s challenges still awaited.

Patriot Way

How would your professional decisions — the ones you make for your organization — be different if you were free to make the best decisions, free of internal politics, competing agendas, or external expectations?  If all you had to worry about was the result, not the politics?

Answering that question is why I love watching the NFL draft, particularly the decisions made by New England’s vaunted head coach/ major domo, Bill Belichick.  Every year, the draft is like three dozen case studies in decisionmaking.  Some teams are driven by desperation.  This year, teams were desperate for quarterbacks, so four teams used their first-round picks on a QB class that impressed no one.  Other teams are driven by hope — that they’re just one or two players away from the Super Bowl, so they trade away lots of down-the-road picks so they can get the superstars who’ll put them over the hump.  Others still are driven by short-term business reasons; the Redskins for years routinely traded away vast quantities of picks so they could snatch up high-profile college stars who would prop up fan interest long enough to sell season tickets packages.  And some still are driven by love:  the NFL lifer, hoping to find the next Montana, Rice, or Ray Lewis, convincing himself that a player he likes is the genuine article.

Not Belichick.  Belichick is incredibly unusual in the coaching world in that he has the complete support of his owner and just one charge:  to contend for a Super Bowl championship every year.  He’s also unusual in his pedigree; both a coach’s son who has coached professionally since 1975 and who majored in economics at a very academically rigorous school.

The job security and the exposure to both football and economics allows him to see the game at its most fundamental level.  Today’s NFL isn’t solely about talent or superstars; it’s about excellence at specific positions (mostly quarterback), attrition, culture, and creating and exploiting market inefficiencies.  Belichick has the quarterback — Tom Brady, possibly the team’s only superstar.  His team model puts a higher priority on skills that don’t necessarily attract a lot of attention or budget-busting contracts — consistency, hard work, leadership, the ability to learn and execute different kinds of game plans and to constantly hone individual skills.

The others he addresses through the draft.  The college game is so different from the pro game that it’s hard to project a player’s NFL success accurately, so Belichick routinely trades single high picks for multiple later-round picks, and does this so well that six of the first 96 picks in this year’s draft are his (in a 32-team league).  He’ll also trade into future years, getting higher-round selections one or two years in the future.  To keep emotion in check, the Patriots methodically assess players for value, determining how much that player will help them in relation to the tradeable value of the pick in question and how much of their fixed budget they’ll have to spend on him.  This leaves him with lots of players whom he can assess further in training camp, and with depth at each position that can survive the rigors of an NFL season.

Belichick is very smart, very analytical, and very creative.  But other NFL coaches and general managers are too.  What sets apart Belichick and others whose teams are routinely successful in the NFL is how he can tune out distractions, focus on the best interests of his team, and make good decisions.  His job is solid; his reputation in New England is bullet-proof.  Other teams can’t, and every year, he turns their desperation, their loss of objectivity, their short-term striving, into more draft picks for the Patriots, a better choice of players, and more wins.

Sport, and Physics, and Risk

The National Football League and its players’ union are in the middle of a labor fight which might risk the 2011 season, but both sides need to pay attention to a longer-term risk that’s fundamental to professional football’s very viability:  will parents allow their kids to play the game as we find out more and more about its health risks?

We know football is a game of collisions, and this has put the game in some sticky situations; in the early 20th century, the deaths of a handful of players led to pressure to outlaw the sport, and Theodore Roosevelt himself brokered the deal that allowed it to survive.  But we’re finding out more and more about the consequences of those collisions: in particular, of frequent concussions.   Increasingly, former NFL players seem to be suffering dramatically higher incidences of depression, dementia, and chronic pain.  One former player, Dave Duerson, killed himself recently by shooting himself in the chest, specifically to preserve his brain for scientific research.  And, as scientists are getting a chance to study the brains of dead former players with troubling post-retirement mental health problems, they’re seeing a tremendous amount of damage that they trace back to the game itself.  Concussions are clearly the big part of the problem, but so is the culture of the game, the pressure to walk off injuries and keep playing.  A concussion is bad enough, but given adequate rest, brains can heal themselves.  The problem intensifies when players try to shake off the fog and get back on the field.  And coaches facing in-game pressure to win will almost always want to return their best players to the game and will look for any excuse to do it.

Will more of this be coming?  Almost certainly.  Consider the physics.  Collisions are basically releases of kinetic energy, the amount of energy that the colliding body represents while in motion.  The formula is this:

KE = ½ M V₂

Where M is mass and V is velocity.  Notice the V₂:  that means speed is even more important than mass in determining the violence of the collision.  Running 10 percent faster doesn’t make the hit 10 percent harder.  It makes it 21 percent harder.

Which means that bigger, faster athletes will hit not just a little harder, but a lot harder.  The average NFL defensive back in 1970 weighed 185 pounds and ran a 40-yard dash in 5.1 seconds.  His counterpart today weighs 215 pounds with a 4.5 second time in the 40 — 13.3 percent faster.  That means today’s defensive back, fully launched, will hit a receiver, running back or quarterback about 50 percent harder than in 1970.  Running just a tenth of a second faster would make the collision 56 percent harder.  And with more sophisticated training and nutrition, players are only getting bigger and faster.

The league is aware of the concussion issue, and spent much of last year cracking down on the most devastating hits, particularly head-to-head contact and hits to players who weren’t able to protect themselves; it also prohibited players who suffered concussions from playing until they’d recovered .  But this can only do so much.  Numbers are numbers, and in this case the numbers are dramatic.  Just as important are the hits that players take before they get to the NFL — in high school and college, where they’re trying to attract the attention of scouts who will get them the scholarship and then contract they want, and where ambitious coaches are looking for their next step up the ranks.  Remember, it’s not just one hit that does the big damage (unless it’s a truly devastating one), and high school and college teams are less likely to have doctors on the sideline who can evaluate a concussion and rule a player out of the game.  It’s the frequency of them, particularly before the player has recovered fully from the last one.

Why is this a big issue for the NFL?  Because big money sports all have this in common:  kids play them with their parents and with each other.  The NFL earned over $2 billion last year from its network deals.  Major league baseball earned $670 million for weekly, All-Star, and post-season games, but that doesn’t include individual team earnings from local broadcasting deals.  Even the National Hockey League makes over $500 million a year from television.  In contrast, professional wrestling — more entertainment than sport, and lacking that critical element of serving participants as well as spectators — made about $200 million from television last year.  Two billion to $200 million is a big, big dropoff.

And that’s the risk the league faces.  As more retired players get older and start manifesting concussion-related problems, and as medical science learns more about football and concussions, do parents stop allowing their kids to play anything rougher than flag (non-tackle recreational) football?  Does the threat of litigation force colleges to start dropping football programs?  And does the game as we know it become something that, knowing what we will probably know, you’d actually feel guilty watching?

The Hidden Hand Commissioner

Real leadership skills are much more nuanced than most people think, sometimes so subtle they’re hard to pick up.  Let’s take Roger Goodell, Commissioner of the National Football League, which is currently mired in an ugly labor fight with its players.  Goodell is the public face of the NFL and while games are being played his power is substantial.  But on big, big issues like the league’s Collective Bargaining Agreement — which the owners opted out of, leading to the current lockout of NFL players — his direct power is minimal.  He can facilitate a deal, he can use the tools at his disposal to create the conditions favoring a deal, but he can’t strongarm anybody.   Under league rules, 75% of owners have to sign off on a labor agreement for it to take effect; the owners are both financially and emotionally invested in a deal; and, oh yes, Goodell himself serves at the pleasure of the owners.  Add to this the feeling among owners that Goodell’s predecessor, Paul Tagliabue, had been taken to the cleaners by the players’ union in the last negotiation; they are bound to be skeptical this time.

Goodell’s position, though, gives him maybe the single best perspective on the NFL’s business, and business is booming.  Revenues are up, team value is up, and things only look to get better.  Just as important, the networks who pay billions of dollars to televise NFL games appear to need them more than ever.   Eight of the 10 most watched time blocks in all of TV last year were NFL games, and as the internet is putting more and more pressure on TV’s network-and-affiliate model, NFL football is one of the few forces keeping the model together.  Times are good; in the big picture, a season lost to a labor war might be the only thing that can slow the NFL down.

So assume Goodell wants a deal; assume the players want to keep as much as they can; assume that a critical mass of owners are willing to risk a lost season to get a deal to their liking; and assume that if Goodell is heavyhanded toward either players or owners, he risks undermining the negotiations.  What can he do?

He has to find opportunities to nudge his owners in the right direction, and he has to seize them.  One such opportunity came up when Peter King, probably the most read football writer in the country, decided to do an in-depth profile of Goodell for Sports Illustrated, just around the time of the Super Bowl (King also did one on DeMaurice Smith, the President of the players’ union).  In his interview with King, Goodell tried to justify one proposal the owners had made that was proving increasingly unacceptable to players:  to extend the regular season from 16 to 18 games.  Owners wanted it to make more money, and players were opposing it because of the (significantly) higher risk of injury that comes with it.  At first blush, it seemed the sort of demand that one side will come up with when left in a room by themselves — greedy and incidental, but with emotional investment.

There are always more ways than one to sell an idea like this publicly, and what’s interesting is to see which ones are used by different people.   New England Patriots owner Robert Kraft is a dealmaker, and his argument was a dealmaker’s:  more games makes for a bigger pie for everyone, owners and players alike.  It’s not incredibly compelling but it at least makes the owners seem reasonable and keeps the idea alive as something worth discussing.

But it’s not the justification Goodell used.  Instead, Goodell described the 18-game season to King as something that the fans themselves wanted; the owners were simply acceding to fan interest.  King was dubious and canvassed his own readers online; overwhelmingly, they rejected it.  Fans didn’t want an extra two regular season games tacked onto the schedule.  They just didn’t want to pay full freight for each of the four meaningless exhibition games that precede the regular season.

It’s tempting to say that Goodell was simply sticking to his talking points, but I don’t think this gives him enough credit.  You don’t get to be Commissioner of the National Football League without superb political skills, and he has to be too smart to know that blindly parroting patently absurd talking points simply undermines his own credibility and leadership.   And there’s no way that as savvy a marketing enterprise as the NFL wouldn’t have surveyed it extensively; Goodell had to know that what he was saying wasn’t true even as he said it.

Instead, I think Goodell decided to use the opportunity to weaken the case for the 18-game schedule among owners.  By describing it to King as something that fans actually wanted, he created a testable assertion which would make public opposition clear and conspicuous.  This in turn let him go back to his owners and say, in effect:  This represents a big risk for us.  We already know that a longer season means more injuries and watered-down talent.  Now we also know that the public hates it by a huge margin, and the harder we push it the greedier we look.  Is this something we really want to make a priority? At the same time, the fact that he was defending it means no one can attack him for opposing it internally or attack him as a way to defend the idea.  It is a very shrewd way to shift internal dynamics without having to use his own personal political capital.  And it worked.  The latest offer made by the owners before the players broke off negotiations included a proposal to go to 18 games only if players agreed. Fat chance of that.

The downside to this kind of problem-solving is that it doesn’t actually build political capital going forward.  Dwight Eisenhower’s entire Presidency was a case study in it, but it wasn’t until a generation later that he got credit for his ability to make problems go away (in a book by Fred Greenstein called, tellingly, The Hidden Hand Presidency). A big, dramatic chest-beating speech to the owners carries the near-suicidal risk of bearing bad news unnecessarily, but it would also have allowed him to tell the players he’d fought for them and push them toward more compromise, because it’s what people think of as leadership.  But it could also have hardened the owners’ stance and crippled his position.  If the owners and players — currently testing their legal positions to see how their leverage players out — can reach a deal without losing playing time, this kind of savvy will be a big reason why.

Baseball: Faster, Better, Cheaper.

Between 2000 and 2003, with one-third the payroll, baseball’s Oakland A’s won three more regular season games than the mighty New York Yankees, and were within a game of winning more regular season games than any other team in the major leagues. This was not supposed to happen; small-market teams like the A’s had been written off as chronically uncompetitive, simply because teams win with talent and talent costs money.

But not all talent costs the same amount of money. For almost a century, baseball used the same metrics to value players — runs batted in, batting average, and home runs for hitters, strikeouts and earned run average for pitchers. As Michael Lewis detailed in Moneyball, Oakland rigorously and creatively identified other, less-used statistics that were most closely related to wins. They found that attendance depended less on high-profile players, as conventional wisdom held, but on winning — a winning team with no-name players would outdraw a losing team with big names. Most critically, their search highlighted the importance of hitters who understood the strike zone, drew bases on balls, and drove up the pitch count of opposing pitchers. Because these kinds of hitters weren’t as highly valued as those with big RBI or home run numbers, Oakland could get them for a bargain — exploiting an inefficiency in the marketplace.

This took both intellectual acumen and a certain level of indifference to conventional wisdom, which is a powerful force in professional sports. Oakland’s General Manager, Billy Beane, had himself been tabbed by baseball scouts as the Next Big Thing, but his own disappointing major league career had been a painful education in the shortcomings of scouts’ highly subjective judgment. And Oakland couldn’t afford to field a team the conventional way, through high-priced talent. As they pursued their new course, they found that baseball’s rigid culture worked to their advantage; because teams were slow to embrace change, they had the Moneyball-favored players all to themselves.

But eventually other teams caught on. In 2002 a commodities trader, John Henry, bought the Boston Red Sox, and hired as his GM 28-year old Theo Epstein, who after graduating Yale had worked his way up the San Diego Padre operation. Epstein, in turn, brought on board Bill James, the uber-guru of baseball statistics. The Red Sox institutionalized practices like batting discipline and driving up opposing pitch counts, and tied so-called sabermetrics to some of their own significant resources. By 2004, they’d won their first World Series since 1918, and in 2007 they won another.

This intensified the search for other insights and other metrics which would identify new inefficiencies in baseball’s labor market. The latest appears to be Runs Prevented, which highlights the contribution of players with extraordinary defensive skills who are usually valued much lower than offensive stars. Preventing an additional 80 runs over the course of a year can shift eight games from the loss to the win column — the difference between being an also-ran and a pennant contender. Boston’s run in the mid-oughts included an influx of great defensive players, and both Tampa Bay and Seattle have made huge turnarounds by emphasizing defense.

Oakland, meanwhile, hasn’t been able to stay ahead of its statistical analysis competition, and therein lies a tale. What Oakland did was nothing less than to reinvent the business model of a major league baseball team, and it showed that the key to succeeding in baseball wasn’t having the best players; it was having the best and most efficient model for constructing a team. Other teams have supplanted the A’s not just because they had better players, but because their own models let them exploit newer and bigger inefficiencies in the talent market. Business model innovation has defined the last decade of baseball even more than steroid use, and this will accelerate as a lagging economy limits team income.

It’s these two factors — the search for inefficiencies and business model innovation — which are defining today’s economy, and underlying so much of the uncertainty. The search for underexploited inefficiencies was behind the explosion in financial derivatives, and it’s the reason Google, with its endless pursuit of consumer information and ways to use it, is the single most important company not just in media but in retail. Business model innovation is why Apple and its iPhone and iTunes platforms have left the traditional music industry gasping in their wake, and the single most critical aspect of Apple’s growth isn’t just their parade of wildly imaginative and engaging products, but the way these products transform entire industries.

And, keeping with the binary theme, two points follow. The first is that the key to any country’s ability to thrive in the increasingly global and technology-driven economy isn’t necessarily bandwidth availability or tax structure or availability of skilled labor or access to capital, although those are all important. It’s the overall ease with which companies can develop and implement new business models. If a country has a flat tax, 95 percent 3G broadband penetration, and the best workers and universities in the world, it still won’t be able to compete successfully if other obstacles make it harder to implement new business models here than somewhere else.

The other is that the pace of change in our economic life isn’t going to slow down because the minute any firm rests on its existing practices, it’s vulnerable. That means there are no safe jobs, no bellweather companies, no certain industries other than those which are deeply rooted the federal government. Policies that try to protect the status quo are worse than useless because they maintain the fiction that the status quo is even viable for more than a few years. But policies that help people adapt to changes in the economy — pension and health care portability, for example, or truly excellent mid-career education — might actually help people not just hang on, but thrive.

Baseball traditionalists greatly resented how Billy Beane changed the game and still resent the ascent of number-crunchers like Epstein, James, Paul DePodesta, and an under-30 generation of General Managers who rely more on performance data than on scouting reports. But the old tools, which emphasized power above all else, directly contributed to the steroid era. Ultimately statistical tools will help teams field not just the best teams on the field, but the most satisfying experience for fans; a new emphasis on defense will help by showcasing exciting defensive play and shortening games. And business model innovation, if we choose to embrace it instead of fighting it or denying it, could very well point the way toward a U.S. economy that can compete and win for the long term.

ADDENDUM 03/09/10: To give you a sense of how deeply analytics have penetrated pro sports — and how sports is mirroring business management — MIT’s Sloan School of Management hosted a conference last week titled “What Geeks Don’t Get: The Limits of Moneyball,” hosted by Michael Lewis himself. The conference drew the best and brightest management talent from all three sports — here’s a great summary from ESPN’s Brian MacPherson.

Change is Hard, Part….

In the Nation’s Capitol, change is in the air.  Old patterns of failure will no longer be tolerated; tough decisions no longer deferred; old limitations no longer recognized.  Boldness is no longer a choice but a necessity, and our future success lies in putting aside old differences and finding new ways to work together.  Yes, We Can.

I’m referring, of course, to the impending announcement that two-time Super Bowl-winning coach Mike Shanahan has signed on to take charge of the Washington Redskins, a team with a proud heritage in the 70s, 80s and 90s but which for the last 10 years has taught Washington how it feels to be a Chicago Cubs fan.  The outgoing coach, Jim Zorn, suffered from inexperience (he only got the job because no one else would take it), terrible personnel choices by his front office, and dysfunctional leadership from the team’s owner, Daniel Snyder, who had (and may still have) a habit of paying top dollar for over-the-hill talent and undermining his coaches.  Things got especially hot for Snyder this year when the Redskins faithful figured out that the problem wasn’t the coach, of whom there have been six since Snyder bought the team in 2000.  It was him — his micromanagement, his bad personnel decisions, his inept but loyal-to-the-death general manager.  In a town full of unpopular people, he topped the local list.

And so Snyder at least seemed to learn some new tricks.  He fired his general manager, hired a new one highly regarded within the league, and leaked to just about everybody he could that he had his sights set on Shanahan, one of the most respected head coaches and tacticians in football.  Fans will be excited about the Shanahan hiring, but the question everybody’s asking is different:  will Shanahan, or any other head coach, really have the authority to run the team correctly?  Has The Daniel (as he is known in these parts) really learned his lesson?

And that’s the big question for Shanahan.  The key to nearly every successful team in the NFL is sound, knowledgeable long-term management, and Shanahan must know that he’ll only be successful in Washington if Snyder does not control the team’s football decisionmaking process.  Previous coaches have been promised Snyder would let them do their jobs, and previous coaches have found those promises forgotten.  The  question for Shanahan is how he manages the process to make sure he keeps the authority he’s been promised.

Which means Shanahan needs to understand that he is a change agent every bit as much as he is a football coach.  He has internal constituencies, he has external constituencies, he has various sources of capital that will help maintain his authority, and he has huge problems with his team that no amount of blackboard wizardry are going to fix overnight.  Unless Daniel Snyder has had a personality conversion of Biblical proportion, there is no reason to believe he will stick to his new lessons once the pressure is off.  To succeed, Shanahan needs to manage all his resources and his constituencies as any effective change agent would.

What does this mean?

First, he needs to understand that his only organizational support comes from the fan base.  It was the fan base that got Snyder’s sycophantic GM fired, and it was the fan base that got Snyder to publicly give decisionmaking authority to the new GM (Bruce Allen, son of legendary Redskins ex-coach George Allen and brother of the former U.S. Senator and Virginia Governor of the same name).  To maintain the necessary degree of support from the fan base, Shanahan will have to consciously manage them.  He will have to convey to them a clear vision of what kind of football team he will build here (and “winning team” doesn’t cut it).  He will have to define realistic expectations, and meet them; the Redskins have been overpromising and underdelivering for years.  And he’ll have to deliver specific actions over the next several months that fit his vision without discouraging the fans more than they already are.  High-priced, high-profile free agent signings will seem like more of the same, for example.  Most importantly, he’ll have to be positive.  Laying out a safety net of excuses — talking about what a mess he inherited, for example — will fail, because people already know what the problems are.  They expect him to fix them, not complain about them.

And he has to have a communications strategy.  Shanahan will need the press on his side because the first year will probably be ugly and Washington’s instinctive response is cynicism.  He has to build relationships with reporters so they and the fan base understand how he’s changing the team, even when things go badly — why he’s trading away popular players for draft picks, or why he uses high draft picks on little-known offensive linemen instead of the hot receiver, running back, or quarterback.  And — this is the important bit — he needs to be able to use those relationships to send Snyder the occasional message to back off when Snyder reverts to custom (and he has with every single head coach).  The leak is an art form in Washington, and Shanahan needs to be able to do it shrewdly and invisibly if he wants to take full advantage of his power base, the fans.  A private complaint can easily be talked away; far tougher is a column in the Washington Post citing “Redskins Park sources” to say that Snyder is back to his old ways.

With fully functional NFL teams, a coach wouldn’t have to do this.  New England coach Bill Belichick clearly has the full backing and respect of his team’s owner, Robert Kraft, and has been able to make huge and unpopular decisions without losing authority.  But for the last decade, the Redskins haven’t been functional; they’ve been a case study in how not to run a football team.  Shanahan knows this — before his successful tenure with the Denver Broncos and their very supportive owner, he failed in Oakland under the domineering Al Davis.  It’s inconceivable that the subject didn’t come up in his conversations with Snyder that led to his agreement to coach the team.  The question is whether he understands what he needs to do to protect that authority.  If he can’t, he’ll fail, like all the others.

Tiger Woods: Why Did We Care in the First Place?

Events have a way of forcing reevaluations of opinions so deeply ingrained they seem like laws of science.  For example, given the late night car crash, the sanctimonious evasions and half-apologies, and now the text messages and voice mails:

Why was Tiger Woods so popular in the first place?

It’s a legitimate question.  He is quite possibly the most boring individual champion of the last half-century in any major sport.  Borg at least had foils, Connors and McEnroe, whose raw emotion reminded you that tennis is a game played by humans with creativity and verve.  Nicklaus and Palmer always had a knack for drama, and Palmer made his name — and, arguably, the future of televised golf — with daring charges of go-for-broke golf when the tournament seemed lost.   Golf wouldn’t seem to be made for TV, which made it rich, but Nicklaus, Palmer, and those who followed them proved that it could be by fleshing out the inherent drama of how individuals, forced into difficult situations, can tap deep inside themselves for courage and the occasional miracle.

But not Tiger.  Tiger’s strength is his course analysis, the way he calculates the risks and rewards of every hole and carves up the course with optimum efficiency.  If he were in another line of work, he’d be a hedge fund manager, surveying the market for hidden inefficiencies and exploiting them.  His game plan is constant:  stay with the pack on Thursday, steadily open a lead on Friday and Saturday, and then force players to catch up with him on Sunday, when pin placements and course setups are at their most difficult.  Occasionally we see real flair and creativity, but only when necessary.  For the most part, Tiger wins golf tournaments not because of the spectacular chips or putts, but by regularly making 8-9 foot putts that allow him to keep par and stay on program.  That’s why his strength is the 72 hole tournament, which emphasizes consistency, and why he’s so mediocre in Ryder Cup play, which rewards risk-taking and flash.  What he can do on a golf course is impressive, but impressive isn’t always interesting.  And when Tiger has a three-shot lead on Sunday, it rarely is.

What else explains his popularity?  Cross graciousness off the list.  With few exceptions, most champion golf players radiate a sense of almost astounded glee at the fact that they play golf for a living — a very good living — and more than in any other sport, they respect the efforts of those who came before them.   But to Tiger, it seems all one great burden.  Galleries are a distraction, the press (and the golf press is notoriously polite) is a nuisance, and he seems to have practically nothing to do with his fellow players.  I’ve seen Phil Mickelson fist-bump a close competitor after a good shot in the last round; the most Woods will muster is a glare.  His caddy, Steve Williams, stares down fans who would dare disturb his boss from behind the ropes.  Bad shots are followed — loudly — with f-bombs and the kind of fury that Bobby Jones learned to correct as a teenager.  He has a charitable foundation, to be sure, but it’s not clear whether he actually puts skin and sinew into it, or simply treats it as a part of a carefully crafted public identity.

It’s not the gracefulness of his swing — unlike the long, easily-flowing arc of a Sam Snead, a Fred Couples or a Vijay Singh, Woods is all muscle.  And it’s certainly not his personality, which at least in interviews is stiff and scripted.  To the extent we see any personality peek through at all, it’s obsessive-compulsiveness:  nearly everything he says has something to do with his play that day, the mechanics of his swing,

So why, up to the recent revelations, was Tiger Woods so astoundingly popular in the first place?  Let me suggest three reasons.

First, he was not offensive.  Golfers are not, by nature, an offensive lot, and it doesn’t take much to cause dislike.  People hated Nicklaus for years because he dared to beat Arnold Palmer, The King.  When he burst onto the scene, Woods was clean-scrubbed and well-behaved and had no universally popular icon to dethrone.   He had an audience which was immediately receptive and only occasionally resistant to his talents.

Second, because he’s usually in the hunt in the most televised tournaments he gets lots of television coverage, which in turn makes him enormously attractive to advertisers and sponsors.  The sponsors themselves have in turn undertaken the huge marketing effort for the Tiger Woods brand.  The ads, particularly Nike’s, humanize him and probably articulate identity and personality for him better than anything else he’s done.

Third, he’s a winner, and we love winners.  Michael Jordan was a great, great basketball player but only became a hero when his Chicago Bulls starting racking up championships, and the halo of those championships turned lesser players on those teams into heroes as well, with endorsement deals and book contracts well beyond what they could have expected without the banners.  We are willing to forgive an awful lot for people who win consistently, and far less for those who don’t.

The question facing the Woods camp, after (allegedly) buying the silence of  the three or five or seven or nine women he’s (allegedly) had affairs with, is what to do next.  He has to figure out whether or how to rehabilitate his public image, he has to figure out how he’s going to deal with the media, and he has to figure out what he wants to do about golf.

And the fulcrum of that, I think, will be conversations his representatives are certainly having with Billy Payne, the chairman of Augusta National Golf Club, which hosts the Masters.  Augusta National’s members like things tidy and under control, dictating the terms under which CBS will cover the tournament (under annual one-year agreements) and spending millions annually to protect the reputation (and brand) of the course, the club, and the tournament.  Augusta National’s members don’t care about gate revenues or television ratings — in 2003, they responded to a planned boycott of its corporate sponsors by making its coverage commercial-free.  It’s inconceivable that Payne would allow Woods’ presence to turn the tournament into a tabloid frenzy, and I’d be surprised if Payne isn’t diplomatically sharing that warning with Woods’s representation.

Then consider the British Open, to be played this year in St. Andrews, Scotland.  Unlike Augusta National, the Old Course at St. Andrews offers no protection from prying eyes.  There are no fences, no walls, no gates, and the British tabloids — never known for restraint — will have a field day with him.  The Royal and Ancient Golf Club of St. Andrews is at least as prestigious and protective of its reputation and tournament as Augusta National, and it’s almost impossible to imagine the R&A wanting its centerpiece overrun with reporters from the Sun, News of the World, and the Daily Mirror any more than their peers in Augusta.  Consider the same for the Ryder Cup, to be held in September in Wales.  Will the U.S. team captain, Corey Pavin, want to disrupt his team’s chemistry on foreign soil when Ryder Cup team dynamics are inherently difficult in the best of times?  Will other players want to answer questions about whether their wives approve of Tiger being on the team?

Which, possibly, leaves the U.S. Open (at Pebble Beach) and the PGA (at Whistling Straits in Wisconsin) as the only major tournaments for the year where pressure from television networks and the PGA itself might be enough to make Woods and the attendant tabloid swirl tolerable.  (But consider, also, that GM, a major Woods sponsor, parted with Woods when it went bankrupt).   Is that enough for someone who treats all other golf tournaments as warmups for the majors?

So here’s what I think happens, or at least makes most sense for Woods as  a professional, economic entity.

Sometime soon, he announces that he is withdrawing from playing professional golf for 2010 so he can focus exclusively on his family and his (alleged) personal problems.  He needs to do something this bold and dramatic to show the full depth of remorse that, in the public eye, his (alleged) serial philandering requires, and he needs to show he has values beyond tees, greens, and fairways.

Operationally, this will give him cover from the press, but also allow him to manage his public communications on his own terms.  And he’ll have some time to figure out what he actually wants to do without having his decisions driven by short-term pressures.  When he makes those decisions, he’ll give the occasional interview with friendly reporters who will ask questions Woods needs to answer but won’t press too much.

The next big question is whether Woods’s void can be filled by some of the exciting young golfers who grew up idolizing him and are now winning tournaments on their own.  If so, it might be hard for Woods to come back.  The players, television, corporate sponsors (especially Nike, whose image-shaping will be critical for any comeback), and those responsible for putting on the major tournaments may have moved on.  But that is the risk he took.

Bend or Break – Win or Lose

The National Football League is a great place to learn about strategy because resources are so evenly shared that it’s often the only real advantage that teams have, both long- and short-term.  There’s no one better to learn from than New England’s Bill Belichick, and in this Sunday’s game against the (then) undefeated Baltimore Ravens, he taught another lesson.

To better protect quarterbacks from season-ending injury, this year the NFL tightened up the rules on what defenders can and can’t do when they rush the passer.  For defenders, intimidating quarterbacks is just as important as tackling them, and the new rules have gotten a fair amount of pushback from football traditionalists who think that quarterbacks should be treated no differently than any other player.  But, as Belichick would say, it is what it is — the new rules are as valid as the old rules, and you gain more from understanding them than from resisting them.

Belichick is known for leaving no stone unturned in search of useful information and analysis.  A few years ago he changed his offensive playcalling based on an economic analysis of field position, and the way he manages his team’s roster and payroll owes an awful lot to portfolio theory.  So when QB Tom Brady told a weekly Boston radio audience that Belichick’s staff had researched the tendencies of this Sunday’s referee crew, found that it had led the league in penalties assessed two of the past three previous years, and that they could expect a tightly called game this week, it shouldn’t have been any surprise for Patriots fans.  As a result, his players knew what to expect and adjusted.

Their opponents, the Baltimore Ravens, didn’t.  Baltimore’s defense is one of the league’s most physical; they hit hard and often, and this is central to their personality.  Unlike New England, they didn’t adapt to the fact that new, more protective rules were being enforced by a crew which has a history of enforcing rules aggressively, and because of this they wound up committing two roughing-the-passer fouls which led to two New England touchdowns.  That was the difference in the game:  New England won 27-21.

After the game both Ravens players and coaches were unrepentant.  The rules, linebacker Ray Lewis said, were “embarrassing.”  Coach John Harbaugh told reporters after the game that tough, physical play was fundamental to his team’s character, and that regardless of Sunday’s penalties they’d keep playing this way.

Here’s the point.  At some point, circumstances force a collision between necessary change and tradition.  GM failed because it wouldn’t adapt to a changing energy environment.  Republicans lost power because they (we) wouldn’t adapt to a political environment in which cutting taxes and aggressively going after terrorists had become secondary issues.  You can wrestle thoughtfully with the issues that a changing environment presents and gain some useful insights — or you can ignore them and keep doing what you’re comfortable doing.  Change happens whether you like it or not; the only choice is how you respond to it.

On a football field in southeastern Massachusetts this Sunday, we saw which approach succeeded, and which failed.