In a recent, weekend edition Wall Street Journal article, Federal Reserve Board Chairman Ben Bernanke took a respite from quantitative easing and the seemingly endless battle with the under-performing U.S. economy to share thoughts on his second obsession: baseball and his beloved Washington Nationals.
A Ph.D. with a strong statistical background on leave from the faculty of Princeton, Bernanke, like many economists, is a devotee of Sabermetrics, baseball’s version of advanced analytics, pioneered by Bill James 30 years ago. And the Nationals, who’ve been in D.C. just 7 years, are this season’s biggest success story, compiling the best record in major league baseball.
Bernanke’s thesis is that, despite all the political turmoil around town, there‘s a noteworthy example of excellent leadership in the nation’s capital – in the person of Nationals manager Davey Johnson. (Disclosure: I delivered newspapers to Johnson’s house as a kid when he played for the Baltimore Orioles. He was a great tipper and a favorite customer!)
Not only was Johnson a Gold Glove second baseman who led the National League in home runs one year, he’s been a consistently outstanding ML manager as well, capturing a World Series championship with the Mets in 1986 and accumulating a career winning percentage that ranks him among the all-time leaders.
Along with a high regard for his performance, Bernanke’s also impressed with Johnson’s philosophy of team management. With a degree in math, Johnson, under the tutelage of legendary Oriole manager Earl Weaver, was “an early proponent of the use of statistical analysis in baseball decision-making, and it is clear in his tactical management of games that he is very conversant with Sabermetric principles.
At the same time, with the wisdom of his 69 years, Johnson has shepherded a young, inexperienced and injury-bedeviled team to the brink of a championship. In addition to his facility with baseball analytics, Johnson has the baseball savvy to “identify and nurture talent,” simultaneously showing “himself willing to sacrifice short term tactical advantage for the long-term benefit of bolstering the confidence of a player in whom he sees great potential.”
Bernanke cites the example of Nats shortstop Ian Desmond, a talented young player who’s struggled over his first few seasons. Johnson overruled the statistical “book” in Desmond’s case this year, keeping the budding star in the lineup, emphasizing that the job was his. Desmond’s “response was to have an absolutely sensational year.”
In sum, Johnson’s style deftly combines analytics, empathy and emotional intelligence. “He strikes the right balance between relying on the tangible (data) and the intangible (confidence and motivation) and shows the rare ability to make the right trade-off” between the short and long run.
Bernanke’s assessment is corroborated in a Sloan Management Review article by Ritu Agarwil and Peter Weill entitled “The Benefits of Combining Data with Empathy.” Driving from their studies of successful Indian firms, Agarwil and Weil conclude that optimal use of technology and processes is a necessary but not sufficient basis for business success. In addition, organizations must “apply data compassionately in response to new opportunities and risks.”
The authors call their overall strategy “softscaling,” an approach “based on three core activities: nurturing emotional connections to achieve commitment and loyalty from employees, customers, suppliers and other business partners; optimizing business processes to achieve low-cost and reliable operational excellence; and combining data (captured by optimized processes and technology) with a deep understanding of local context to make empathic decisions. Being excellent at just one is not enough – it takes all three.”
The takeaways from the Agarwill and Weill research is a softscaling strategy that:
- Prioritizes process optimization but acknowledges that it’s just one piece of the management puzzle,
- Uses BI and analytics to discern stakeholder needs,
- Applies contextual insight to elucidate the analytics, and
- Uses technology to standardize operations, reinforce the company brand, and personalize the customer-company connection.
The authors surmise: “The empathic use of data enables companies to be, in effect, left-brained and right-brained simultaneously. The data provides the bridge that allows the rational (left side) to communicate with the emotional (right side).”
I think Bernanke – and perhaps Johnson and Desmond – might agree with their assessment.
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