Your Business, Winning, and the 2017 Dodgers

I love baseball.  When I was a kid I remember sitting on my couch watching Game 1 of the 1988 World Series.  The Dodgers were never going to win that game.  Our star pitcher, Orel Hershiser, wasn’t available because he had pitched Game 7 of the previous series.  Kirk Gibson was hobbled by old age, though the official injury read “knee”.  The A’s were stacked.  It was just a terrible match-up, until it wasn’t.  Kirk Gibson limped up to home plate, smacked a game winning home run, and the rest is history.

The game itself went down as one of the great games ever played.  But outside of the unlikely outcome and otherworldly heroics, it also personified an age-old axiom in baseball; one player, one moment, can be the difference between legend and goat.  It helps to shed light on why General Managers in baseball practice a model of business that hinges on two simple principles, snap shot measurement and the practice of “going for it”.

It’s a model that may rear its head in your business, and you should be afraid.worn-out_baseball

Baseball GM’s annually go through a ritual of All Start break calibration, taking a snap shot measurement of where their team is relative to the standings.  The purpose of this annual measurement is to asses if they fall into one of two categories, “buyers” or “sellers”.  If a team is in a position that gives them a realistic chance of making the playoffs, they will begin the process of surveying the league for potential players they can trade for.  Meanwhile, the opposite calibration is happening for teams less fortunate.  If they do not have a realistic chance of winning, they will begin looking to dump high priced players in favor of younger, cheaper “prospects”.  This dynamic drives the annual trade market every July in Baseball.

The teams with winning prospects will automatically assume the role of “going for it”, trading away prospects for players that can help them win now.  Sometimes it works.  Last year the Cubs gave up a haul of young prospects in exchange for hard throwing closer Aroldis Chapman.  They won the World Series.  In 2015 the Royals acquired Johnny Cueto for prospects and won the Series.  These moves indelibly notched the names of their GM’s, Managers and players in the history books.  But sometimes, history can have a cautionary tale.

Baseball, and sports in general, is a talent based exercise.  The best talent does not always win, but they almost always are part of the final group.  The “going for it” mentality by its nature loads a disproportionate amount of talent into a small window of time.  While it maximizes the probability of winning within the given window, it creates a vacuum for future years.  When a team depletes its farm system, or talent pool, in exchange for right now talent, it creates a void.  As the current players on a team begin to age, the organization is unable to replace them with up and coming young players because they traded them away.

Imagine you had a business that consistently generates $15,000 in net revenue.  Out of nowhere, you suddenly get a surge of demand for your product.  To handle that surge you order new equipment, new storage space, and additional headcount, you go for it!  You fulfill the orders, and your quarterly net revenue surges to $40,000.  You win big, right?  Yes, for the moment.  But what happens if the orders slow down or revert to their natural pattern?  Your stuck with debt, finance charges, and HR issues that could quickly erode whatever additional cash you earned and nosedive you into the red.

In that light, you can understand the insanity of the baseball culture when it is bounced against good business practice.  The 2009 Yankees were a great baseball team.  But years of trading away talent and absorbing astronomical baseball salaries depleted the team of future talent.  The result?  A historically great franchise hasn’t played in a World Series since.  Despite having one of the largest payrolls in sports, they have had four consecutive years of near .500 baseball with fan attendance falling in each of the last three years.

Then there are the Dodgers.  Andrew Friedman, the LA General Manager, has done something very un-baseball like over the last four years.  Despite winning the division in each of his three full years with the Dodgers, and having a realistic shot at winning a championship in each, he hasn’t traded his prospects for win-now talent.   Each year he has held his cards at the trade deadline, despite big name players being dangled in front of him for his prized young prospects.

The result?  A team littered with home grown talent, deep at every position, with a farm system stacked as high as a Doyle Brunson chip count.  Friedman has eschewed the “win now” philosophy and seems to have adopted something the business world can learn from.

Win forever.

How the business system Andrew Friedman has adopted will ultimately play out will be seen.  But for now, it appears someone in baseball has finally started doing something novel, running a team like you should run a business.

Regional Influence of GCVCC Being Felt

The All Valley Legislative Lunch held May 12th was not unlike many legislative events our valley hosts annually.  Local Assembly and State Senate members shared updates on pending legislation, current initiatives, and projects that are important to them.  There was some common ground, some not so common ground, and a broad array of ideas and visions for the future of our valley.

Oh yeah, and there was a leading candidate for California Governor on the stage.  Wait, what?

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Nearly a year ago the Greater Coachella Valley Chamber of Commerce was formed to lend a strong regional voice to the business community in our valley.  At the time many involved in launching it saw clearly the need to bring together industry from across the valley in an effort to pool resources and work together on issues and opportunities that effect us all.  Our valley economy is a strong engine tied together by a diverse weave of events, agriculture, retail, hospitality, and tourism.  The more that diverse business base communicates, the more influence they have in shaping the valley’s future direction.

What may not have been so clear at the time of it’s formation was just how loud that voice would be – loud enough to reach Sacramento.  California’s economy is big, so big it would be the sixth largest in the world if stood alone.  Standing out in a business community that large can be tough.  And yet last Friday, on stage in front of 300 local Coachella Valley chamber members stood Antonio Ramón Villaraigosa, the 41st Mayor of Los Angeles and a leading candidate in the 2018 California Governors race.  How did he get there?  That is a story I will save for another conversation.  I can share this, he would not have been there if it were not for the formation and regional influence of the GCVCC.  That is a fact.

As our economy continues to get closer and more interconnected, regionally and globally, the ability to be a relevant part of the conversation is paramount.  What happens in Los Angeles, San Diego, San Franciso, and Sacramento impacts our valley.  The GCVCC understands that.  Our goal?  Whether it is a phone line 500 miles away, or a moderated stage 50 feet away, we will continue to be part of the conversation.

Joshua Bonner is President & CEO of the Greater Coachella Valley Chamber of Commerce (GCVCC).  The GCVCC is the largest Chamber in Riverside County with over 1,400 dues paying members.  It officially represents the city’s of Cathedral City, Coachella, Indio and La Quinta, as well as the Cabazon Band of Mission Indians and the Twnety-Nine Palms Band of Mission Indians.

“Bold” Shines at LQ State of the City

“A ship is always safe at the shore – but that is NOT what it is built for.”
― Albert Einstein

The recent La Quinta State of the City was a chance for the business community to tip their cap’s to the risk takers, and see on full display the rewards of forward-thinking.  SilverRock Resort certainly has not been a hasty project for the city, and as we are learning was never about rushing into the first available deal.  What it has proved to be is a display of innovation, patience, and a laser focus on building a development the city and our business community can be proud of.

When Mayor Evans announced form the stage last week a pair of luxury hotels through Montage International to be built at SilverRock Resort, it was big news.  The five star property will help to elevate the profile of an east valley hospitality industry that is finding its stride.  Long known for the world famous events that put it on the map, the communities that support those ventures are starting to build out the infrastructure necessary to fully capitalize on it.  In the long run, that will be good for the entire valley.  As we continue to see a push to build out the valley as a year-round destination, having venues and activities that last longer than a weekend will be a vital element to stimulating further development.

Watching the SilverRock development come to fruition, it is clear city leadership in La Quinta gets that.  “This news is game changing, not only for La Quinta but for the entire Coachella Valley,” said Mayor Evans.  Game changing indeed, and hopefully a well laid road map for others.  SilverRock is a great example of how private and public partnerships can work.  Even through the rough waters of a recession the City stayed the course, selecting a quality partner in The Robert Green Company.  That commitment is about to pay off big.

At The Chamber we have always enjoyed good working relationships with our city partners.  We work together to help create conditions that are conducive to economic growth through a variety of programs and services, and encourage more of the same across the valley.   From regional agencies like the Greater Palm Springs CVB and CVEP, to private equity partnerships like SilverRock, the way forward has always been together.

“When I look at economic development for the city and the surrounding communities, this could generate other developers to want to come in.”  Well said Madame Mayor.

Joshua Bonner is the President and CEO of the Greater Coachella Valley Chamber of Commerce.  The Chamber is a business membership organization representing the Coachella Valley. We support our members through advocacy, education, networking, and other community based opportunities. The Greater Coachella Valley Chamber of Commerce is a registered 501c6 non-profit supported through member contributions.