Or as former Cardinals executive, now Athletics Assistant General Manager Dan Kantrovitz put it to me, “The bottom line is, Bill had the courage to fix something that wasn’t necessarily broken.”
A month after his initial meeting with Jeff, Bill DeWitt prepared a memo, which he shared with a few senior members of the organization, about his new hire, Luhnow. His proposed role bears more than a passing resemblance to that Bill DeWitt Jr. signed up for with the Reds back in 1967.
I asked Bill why he didn’t take on the role himself. After all, implementing these principles had been a lifelong pursuit of his. Plenty of owners with far less expertise meddle with their teams or flat out ruin them. But perhaps it is precisely the intelligence that separates DeWitt from a James Dolan of the Knicks or Jerry Jones of the Cowboys that convinced him to delegate that role.
“No,” DeWitt said, laughing, when I posed the question to him in September 2014.
“First of all, I was running the overall franchise. We had a lot going on, especially efforts to build a new stadium. That was a specific, full-time job at the time. I just figured I’d get the right person in there. And I’m not sure I could have done it. Someone at that age, with those computer skills, is what we needed. I always, in everything I’ve done, I’ve tried to get smart people around me. The smarter the better. And let them figure it out.”
DeWitt returned to this himself, later in the same conversation. “Jeff hired Sig [Mejdal]. It’s kind of, like, why didn’t I do Jeff’s job? Why didn’t Jeff do Sig’s job? Because you want to bring in smarter and smarter people.”
MEMORANDUM
FROM:
Bill DeWitt
RE:
Proposed Organizational Change
DATE:
September 16, 2003
I have been concerned for some time that our player procurement process and professional player evaluation system have not been at a level to give us a competitive advantage within Major League Baseball and in certain areas have in fact been below average. It is critical to the success of our franchise that we endeavor to correct this, and my goal would be to put us at the forefront in these areas to take advantage of what is certainly an inefficient market.
I would propose to establish a position under Walt titled Vice President of Baseball Development. Enclosed is a description I have developed of what this job would entail, and I am very excited to have come across an individual who, I believe, is ideally suited to take on this important role.
His name is Jeff Luhnow, and he is 37 years old. Although his family is originally from the East Coast, Jeff grew up in Mexico City and, of course, is very fluent in Spanish. He is a graduate of the University of Pennsylvania with a joint degree in Economics and Engineering and has an MBA from Northwestern. Following graduate school, Jeff worked for McKinsey and Co. in Chicago for five years where he was ranked at the top of his class, achieved pre-partner status at the earliest possible age, and was on track to become a partner when he left to pursue an Internet opportunity in California. From there he became a founder and C.O.O. of an Internet startup which has grown, appears to be on a successful track, and has continued to be funded by sophisticated venture funds in a very difficult climate. Jeff designed and implemented the information technology system and currently manages 35 employees.
The reason Jeff would leave his current position, which has substantial upside with his management warrants, is he is a baseball “nut.” He has always been a huge fan who follows and studies the game in his spare time including the extensive scientific work which has been developed over the last 20 years. He almost bought a minor league team a couple of years ago and has always wanted to be involved in baseball. I became aware of Jeff through Jay Kern, who worked with him and vouches for his talent and importantly, his personal qualities. He would fit in very well with our organization. I think he presents a unique opportunity for us to bring to the Cardinals a high level McKinsey talent at a below market price to fill a very challenging and important position.
VICE PRESIDENT OF BASEBALL DEVELOPMENT
Responsibilities
1. Establish methods of evaluation for amateur players.
A. Based on existing data and history, what are best predictors of success, e.g., tools, intangibles (makeup), performance, etc. Look backwards from MLB and forward from amateur signings.
B. Determine risk/reward parameters for various categories of draft, including high school, college, pitchers, position players and combinations thereof.
C. Research and assess cost/benefit analysis for outside U.S.; Dominican Republic, Venezuela, Asia and elsewhere.
2. Based on information generated from the above, determine the best organizational structure and allocation of resources to achieve our basic goal: to acquire players on a real value basis with maximum market efficiency.
3. Develop and establish information technology system relative to professional player personnel.
A. Build data base for professional players with maximum relevant information for each player.
B. Establish a model to evaluate a player’s contribution to winning which will help quantify a player’s financial value and therefore determine what he should be paid.
C. Model would include a forecast or a prediction of future success. Types of relevant information will include age of increasing, peak, and declining performance, ball park impact, performance to date, likelihood of injury, length of time in minors, etc.
4. The overall objective of this knowledge based and systematic approach is to enable the Cardinals to make the best possible player decisions, including financial commitments, and to take advantage of the inefficient market.
Luhnow soon had to employ one of the most significant attributes Kern touted to his father-in-law: an ability to withstand criticism.
“I was in charge of recruiting for both Northwestern and from Chicago,” Luhnow said. “From the McKinsey Chicago office. And [Kern] was one of the top recruits. He did a summer internship. I recruited him to come back full-time. He had offers to go work in Wall Street. We got him back full-time. I was working for a manager who was known as one of the toughest managers in the office. She was really, really tough on people. And I didn’t have any problem with her at all. Jay rolled onto a study that I was rolling off of and took my role on the study with an insurance company, and this woman became his manager, and he sort of freaked out. He had a tough time handling her because she was a micromanager. Jay’s a really smart guy, I mean he’s really capable, but they didn’t get along at all. And I remember Jay saying, ‘I can’t believe you survived under this manager. You must have a really thick skin. You must have a really great way of getting along with people that I don’t have.’ Because I’m not sure that’s the study that drove him from the firm, but he ended up leaving the firm shortly after that.
“I think he felt that if I could survive under her that I could probably survive the rough-and-tumble baseball world. He anticipated some negative reaction to someone like me coming in. He communicated to Bill that this guy, one of his strengths is that he’s got a thick skin and he’s not going to be easily pushed aside by some of the traditional baseball guys.”
Understand this: over the past decade, baseball has come a long way on the idea that those who didn’t play the game can eventually run it. When Luhnow was hired, the use of statistical analysis by the A’s was an anomaly. Now, clubs that don’t rely on such analysis are very much the anomaly. Clubs without an analytics department don’t exist. Theo Epstein, don’t forget, was a widely mocked hire back in 2002. That he was a breakthrough in any number of ways for the sport didn’t gain widespread acceptance until he broke a little eighty-six-year-old streak in Boston.
But even today, someone with Jeff Luhnow’s background, brought in with a relatively senior title (vice president of baseball development) and an expansive portfolio, would be looked upon suspiciously by many people within a major league organization.
And this wasn’t just
a major league organization. This was the St. Louis Cardinals. And while there were a few around who’d internalized what George Kissell stood for—the constant innovation that he’d learned from Branch Rickey, the consistent adding to and changing of his manual first scripted decades ago during a snowy Ithaca winter—for many others, the Cardinals were this static, successful thing.
“When you think about the timing—okay?—’03 was not a great year for us,” Mozeliak told me in a January 2015 interview. “Wasn’t awful, but wasn’t great … and Walt at the time was probably considered one of the top five general managers in the game. And then subsequently, Bill brings in Jeff, and I think Walt had a hard time with that because it wasn’t his decision to bring him in. It wasn’t necessarily his type of person to be around from a personality standpoint. And now fast-forward from October of ’03 to now, say, July of ’04, guess what? The St. Louis Cardinals are a pretty damn good baseball team all of sudden. Right? And so I think, in Walt’s case, he was, like, ‘We knew what we’re doing.’ We subsequently win 105 games. We go on to the World Series. And I think he felt, like, ‘Jeez, maybe we weren’t that bad off.’”
And some guy from McKinsey was going to come along and ruin it.
“But if you think of it from Jeff’s perspective, that he was brought in by the owner, you know? The owner,” Mejdal, who joined Luhnow with the Cardinals in 2005, told me in an October 2014 interview. “At a time the team was winning. There weren’t many people with his background in baseball at that time. I can say that the resentment of the portrayal of scouts in Moneyball was quite fresh in people’s minds. And Jeff was brought into a system that wasn’t particularly interested in having him in that system.… I think that’s a description of what ground rules were like when he came in.”
Or as Mozeliak put it, “I don’t think Walt trusted him, and I don’t think Walt liked him. And from that standpoint, that was where it began.”
Precisely how huge an advantage the Cardinals had just given themselves came into focus early on, in a meeting with the analytics team.
“When we first did the retrospective study, I could see the improvement to realize with the proposed methodology and felt compelled to convince anyone I could that we needed to take advantage of this.” Mejdal recalled. “I remember we presented that to the owner, La Russa, and [then–pitching coach Dave] Duncan, and [team president] Billy DeWitt [III] was there, too. I remember the look on Billy’s face very well. I didn’t know if there would be skepticism or even a dismissal of the idea, but instead I saw a look of excitement. He and his father both appreciated that the inefficiency was there, and I remember feeling a great relief. It was just a question of how much of it could we grab and how long would the inefficiency remain.”
Also, how quickly the team could implement a system to capture that inefficiency without the support of some key stakeholders, such as the general manager. Jocketty, who’d led the Cardinals to significant success that continued as Jeff was brought in, had a hard time fathoming that he’d be more than an advisory hire.
“Initially, I was told, in fact by Jeff himself, that he was there to observe and [find] ways that we might do things better, and how we might make better decisions, however the process was,” Jocketty said. “And it was something that was more an informational piece as much as anything. But then, through the years, when he was brought in full-time, he got more involved with scouting, then player development, it became obvious that it was a change in direction, in philosophy, that they were eventually going to go to.”
Luhnow lacked the credentials that would have made him palatable to many in the organization already. Several people I talked to, including Jocketty, believed that Luhnow’s receiving a senior title right away created additional friction as well, though Mejdal believes, with good reason, that Luhnow’s ideas would not likely have been heard at all without that title and his direct line to DeWitt.
Every single person I interviewed told me that Luhnow’s ideas would have been a huge problem regardless of who advocated for them. Luhnow worked hard to implement these ideas slowly enough to avoid more significant conflict, often to the frustration of his analytics team. But if he’d slowed them any further, he would have been operating at a suboptimal level for the man who hired him.
“I felt like the mandate from Bill was ‘Let’s make sure that we put together a system to provide information to the decision makers, especially on the baseball side, so let’s make sure that we’re not flying blind when it comes to all of the GM stuff,’ all of the sabermetrics, if you want to call it that,” Luhnow said. “Information that front offices are clearly starting to use to make better decisions. Let’s make sure that we’re up to speed. And Bill’s instinct was that we we’re not up to speed. And he was correct. And so there was not a lot of information that looked at—at performance in a different way than just looking at the scout sheets.”
While the organization was not monolithic in resenting Luhnow, it must have felt that way to him, particularly early on.
“I thought it was good that we were starting to take a more analytic view of the game,” longtime Cardinals front office executive John Vuch told me in a December 2014 e-mail. “But for a long time, I was the closest thing we had to an analytics department—at one point my title was something like Manager of Baseball Information. So I was all for us ramping up the statistical side of things, as I thought we underutilized the stats in our decision-making process.”
Luhnow concurs, crediting Vuch for doing what he could within the system. But Luhnow added, “There was nobody—it wasn’t like I was encroaching on anybody’s territory because there was nobody really to do any of these things.”
Yet, at least the implied threat was obvious to Jocketty, according to John Mozeliak, who was hired by Jocketty in 1995. Jocketty had succeeded in his role. But his method for doing so was not dramatically different from that of the Cardinals GMs who’d preceded him.
“My first thoughts were—one was, I was scared. Because I could tell Walt wasn’t happy,” Mozeliak said in an October 2014 interview. “So I didn’t know what all of this meant, or how this would affect us. But there was a part of me that also saw it as a wonderful opportunity. I was curious. I understood how the old model worked. I got it. I could do that. But I also saw that the world was changing.”
Or as Jocketty put it, “I think my feelings then and now are much different. I still have a lot of respect and admiration for that organization, for the people there, and the utmost respect for Bill DeWitt, and what he’s done for that franchise through the years. But at the time, I didn’t understand. Because I thought we had been very successful with what we had been doing. But Bill had the vision to see that things were changing rapidly.”
To a certain extent, I’m not going to call them all social outcasts, but they’re not exactly people you’d find at a bar, you know, late at night.
—JEFF LUHNOW
If the entrenched forces that made up much of the Cardinals front office rejected Luhnow himself, you can imagine the response to the advisory board Luhnow immediately put together to begin analysis of any inefficiencies in the team’s operations.
“I read a lot,” Luhnow remembers of this time. “I researched a lot and I found people that resonated with me that I thought were smart and could help, and I started asking them for advice. If you were the baseball team, what capabilities would you want to build with? Things you’d focus on, et cetera, et cetera. Also really enjoyed reading because I was into fantasy, [innovative fantasy-baseball writer] Ron Shandler’s stuff about how to predict the future from stuff from the past. And so I got Ron Shandler involved and I actually created this advisory board. When you’re in the start-up world, you create an advisory board of people that are in your sector just to get credibility, and you use them for advice as well. You don’t pay them anything. We had a great advisory board at Archetype of, like, [high profile businessman] Arthur Rock … so people with clout and knowledge.
&
nbsp; “And so I figured, let me get in this little area of baseball information, advanced baseball information. Let me pull together a little group of experts and let them feel involved in what we’re doing, but more importantly get access to their brains and figure out what we can do.”
Luhnow didn’t start bringing this group to meetings or anything—as he put it, “Walt wouldn’t have known Mitchel Lichtman from Tom Tango from Ron Shandler from any of these guys.… So it didn’t matter who I presented. It was going to be weird and different and odd no matter what. Now, these are some odd characters. You know, none of them played. The analytical crew is a unique breed of people.… To a certain extent, I’m not going to call them all social outcasts but they’re not exactly people you’d find at a bar, you know, late at night.”
But while Luhnow gathered information about how he’d recommend changing the team’s process long term, “At the same time, I was getting myself as up to speed as possible on how I could help the baseball decisions that fall,” Luhnow said. “And there were a lot. There was trading J. D. Drew and what we were going to get back from that. There was signing free agents like [Jeff] Suppan and [Reggie] Sanders and—how can we make sure that if we’re going to go out and sign a free-agent pitcher that we get the right guy? Obviously we had scouting reports from pro scouts on all that, but I felt like my responsibilities were to make sure that we didn’t make a mistake, by really understanding their performance history. And so Suppan was probably one of the first signings that I felt like I influenced.
“But I do remember, in particular, it was Suppan, I was really intrigued by the consistency of his win-share production year over year. And the fact that he was kind of money in the bank to earn between ten and thirteen win shares every year regardless of environment or—and to me, on what I thought was a play-off-contending, championship-contending team, that would translate into ten to fifteen wins. Which when you add it to Matt Morris—it just seemed like a number three starter that would stabilize the rotation, and that’s what I argued. I remember arguing that to Walt and Bill, and I think I successfully moved Suppan to guys to consider. Because he wasn’t the sexiest guy in the world.… He was just, kind of, Mr. Consistency.”
The Cardinals Way Page 7
