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The Case for Not Extending Theo Epstein

When Theo Epstein left the Boston Red Sox and took his new position with the Chicago Cubs in late October of 2011, he wrote an op-ed in the Boston Globe to explain his choice to Red Sox fans. He opened by citing Bill Walsh (the football visionary who innovated the West Coast Offense), who believed coaches and executives should seek changes of scenery at least every 10 years. Walsh felt that doing so allowed both the individual and the organization to maintain healthy growth and consistent energy. What Epstein was saying, in essence, was that his time had come (if a bit earlier than he’d imagined), and a great opportunity had arisen.

That was only a bit over four years ago, and Epstein has done a borderline miraculous job of running the Cubs over that span. So I understand why it caused waves, two weeks ago or so, when I suggested on Twitter that the Cubs might be wisest to shelve the much-discussed idea of extending Epstein’s contract beyond 2016, and to move on. As insane and radical as it sounds, though, I still think that. My goal today is to show you why.

About two years ago, when Addison Russell was still an Oakland Athletics prospect and Anthony Rizzo was a .233 hitter, I was something else, too: a collections specialist at a network of mental health clinics. One day, I was sitting in the waiting room of the corporate office, waiting to interview for a promotion I didn’t want all that badly, wasn’t qualified for, and didn’t get. I sifted through the stack of magazines next to me, hoping for Sports Illustrated, but they had only ESPN: The Magazine. So instead, I turned my attention to a copy of the Harvard Business Review, from the previous fall. On its cover, stylized with nonsensical Xs and Os, were the words: “The Radical Innovation Playbook,” and, smaller, “How to engineer breakthrough ideas, PAGE 73.” The magazine has taken this approach for several years now—theming its issues—thus providing multiple angles on a given management topic each time.

If the person in charge of interviewing me for that minor promotion had been but a little more punctual, you wouldn’t be reading this right now. But I was left alone for a while, so I got most of the way through the first article that day. After the interview, I slipped in and asked if I could take the issue home. Thus, I still have it, and I’ve finished that fateful article. Read it a few times, in fact. Here’s the gist.

The piece is by two former co-directors of DARPA (the Defense Advanced Research Projects Agency). They walk the reader through the things that make the DARPA model, arguably, the best there is for fostering innovation and game-changing breakthroughs. Among those things: project leaders and teams working on fixed-term contracts, with established, non-negotiable end dates. The justification for that stipulation comes in several paragraphs; I’ll quote them at just the length necessary to get the point across.

Projects with set time frames (up to five years at DARPA), leaders who leave when the projects end, and the scalability, diversity, and agility of contract performers have an edge over traditional captive research organizations. All of those things make it possible to recruit high-caliber team members from a broader pool and get them on board faster.

The DARPA model also allows a company to alter its portfolio of projects faster and at a much lower cost than a conventional internal research organization can.

Another benefit of limited tenures is that—combined with a clearly articulated important need and a scientific challenge—they create a sense of urgency. This forces the team to act as a whole to benchmark progress and to continually challenge “how things have always been done.”

As a practical matter, a high-risk effort by a diverse set of world-class experts can be sustained for only a limited period. One reason is the intensity. Another is that both the problems and the scientific advances needed to solve them are perishable.

Leaders who leave when projects end. Altering a portfolio of projects faster. A sense of urgency. A willingness to challenge convention. In addition to being effective, this is an extremely exciting way to do business. Admittedly, of course, the Cubs aren’t DARPA, and baseball simply isn’t as ripe for innovation as many other fields. More to the point, a single business review article does not an academic case make. Still, a lot of the major principles here bear considering. After all, the primary project Epstein took on—not only rebuilding the Cubs, but making them both dominant and sustainable—is complete. He’s even put in place a codified Cubs Way, providing a degree of stability to the ongoing project of team-building.

The Cubs are going to be very, very good over the next five years. Almost any credible executive can safely guide this team through the next phase of its growth, because the cornerstones (and for that matter, most of the capstones) are in place already. That doesn’t mean that Epstein has outlived his usefulness in Chicago, and the moves he makes between now and the end of the season (a big trade to supplement a World Series hopeful? The most challenging Draft of his tenure? One or two high-profile, or several medium-sized, Cuban amateur additions? Maybe all of the above) will be important. There might be no one better-suited to make them.

Epstein remains an excellent baseball executive, and if he’s here for five more years, the Cubs will profit from his presence. A section of the article on the DARPA model discussed “A special breed of leader,” and many of the attributes listed could be a specific description of Epstein. “They need to have deep technical or scientific knowledge,” the authors write, “be natural risk takers, and be thought leaders who can create a vision that inspires an entire community.” That’s Epstein in a nutshell. The Cubs are the league’s most aggressive, flexible, opportunistic and systematic organization right now, and they owe much of that to Epstein’s leadership.

On the other hand, it’s not hard to imagine that the designers of the DARPA model might have a better, more finely-tuned sense of when the bloom begins to fall off the rose for dynamic leaders and organizations than had Bill Walsh. Five years might be a better time for the Cubs to seek a change than 10 years would be. When terms like “risk takers” and “a vision that inspires” show up in a description of a leader, there’s an implicit sense that the shelf life is short. Again, the Cubs can’t help but be good, going forward. If they want to keep innovating, keep revolutionizing, and keep exploring the frontiers of running an MLB team, though, they need to look for someone with a whole new set of ideas that can be integrated into the foundation Epstein has laid.

Recall that, late in his tenure with the Red Sox, Epstein made a few missteps—extending Josh Beckett and signing Carl Crawford to a seven-year deal that immediately flopped, most notably. Both deals (and particularly the Crawford deal, which followed a year or so of borderline-creepy digging by the Red Sox) were born of a certain overconfidence, a notion that the front office’s years of experience and codified methods made them invulnerable (with the right amount of thorough preparation) to certain critical pitfalls. It’s because of things like those moves, things that seep in when everyone gets a little too sure of their processes, that the DARPA directors’ description of that special breed of leader tended to preclude anyone moving past their early 40s. It simply gets harder to learn and adapt as one adds experience and success to one’s resume. Assimilation takes over for accommodation in the process of adding new ideas and data points to one’s existing schemas. Slowly, and despite the best and most honest efforts made by brilliant and open-minded people, experience and success become drags on the process of constant, healthy change.

There was another article in that issue of HBR, entitled “Rethinking the Decision Factory,” about how organizations can better manage knowledge workers. One of its key tenets is that those organizations tend to underestimate the ability to port knowledge capital developed by a specific individual or individuals to new ones, especially if steps are taken to codify the knowledge the organization develops in real time. They also often underestimate the availability (and so overestimate the market value) of great knowledge workers. I think that’s as true in baseball as anywhere. We underestimate the number of people out there with great, bold ideas, many of them belonging to groups (demographic, philosophical, and otherwise) underrepresented in MLB front offices right now.

Epstein is a tremendous front-office talent, but he’d be a very expensive one to retain, and the groundwork he has laid ought to allow even slightly less talented replacements to thrive. It’s not that Epstein doesn’t deserve to enjoy his success, revel in it, or be praised for it long after he leaves. It’s just that the Cubs have a chance to be more than a great team. They have a chance to change baseball for the better, in many ways. Opening up the organization to an entirely new perspective, perhaps even from someone in another field of endeavor altogether, could foment that possibility. In my opinion, before they commit to the second five years with Epstein, the Cubs should seriously consider their alternatives, and be willing to take the risk of changing direction in search of the next mountaintop.

Lead photo courtesy Jerry Lai—USA Today Sports.

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15 comments on “The Case for Not Extending Theo Epstein”

Carlos Portocarrero

Well done… You’ve taken quite an unpopular stance and made a great case for it. Though I bet it will be too hard for ownership to overlook how “ungrateful” this will make the team look when everything is else is going so well. I’m guessing they won’t want to rock this particular boat.

Isaac Bennett

Really nicely written, thoroughly enjoyable.

The difference between his tenure with the Red Sox when he started making high-profile mistakes, and his current one with the Cubs, is that he already had two rings in Boston. The sense of urgency had worn off and a certain expectation (complacency?) took over. He’s yet to reach the ultimate goal in Chicago, getting ever so close and failing. That will serve to do nothing but drive him madly to the ultimate height.

I agree with your thesis in principle, but I believe you’re five years too early in delivering it.

JS

The primary job of the President of Baseball Operations / GM is to manage team ownership. Epstein is not a flawless executive (there is no such thing), but he commands the respect of everyone in the organization and most outside of it, and has the courage to admit mistakes, defer to subordinates in their areas of specialization. He has the ability to attract elite talent at all levels (Jed Hoyer, Joe Maddon, Jason Heyward…).

The Cubs are an organization that is focused, top to bottom, on the same goal and their is faith in the people and the process for success. There are times for change and times for stability. This organization is as healthy as it has been since WW2. Stability will allow everyone to continue to focus on their role and grow in their arenas without opening up areas for new personalities to come in and disrupt the organizational ethos. This ethos is something that Theo himself spoke about:

“The organization as a whole from ownership to the business side to the front office to Joe and his coaching staff, all 25 players, even the guys who were not on the roster that came up from the minor leagues, all the way down to the minor league system, it was the most connected, selfless, team-first organization that I’ve seen in a long time….. We will be mindful of not screwing it up,” Epstein said. “And trying to add to it as things change. You can’t try to stay in one place forever with your chemistry. It does evolve. You just have to try to manicure it as best you can.””

Letting Theo walk (which really amount to pushing him out since everyone involved, including Theo, has said he’s staying) over the size of his contract and the opportunity to add new perspective offers very little upside and enormous downside. What if the new PBO/GM tells Joe how to manage the games? What if he or she cannot get Crane Kenney to extend the necessary resources for the team? What if the pitch to MLB free agents is less resounding and thus, less effective and more costly? What if less scouts and development personnel want to work with new management?

Letting Theo go would mean replacing him with someone else. There is no one available that could replace what he brings to the Cubs today, and that’s not even including the transaction cost of management turnover. There will be a time when Theo and the Cubs way. It will certainly not be after the 2016 season and if it does, it will be a catastrophic organizational failure. The Ricketts family will continue to feed the golden goose and Epstein will be paid in accordance to his immense talents.

Source for quotes: http://chicagocubsonline.com/archives/2015/10/theo-epsteins-end-of-season-press-conference-was-chock-full-of-information.php

Norm

The project Theo took on is winning a World Series.
If the Ricketts *actively choose* to move on from him before that happens and they don’t win in the next 3-5 years, it’ll be the equivalent of the Red Sox trading Babe Ruth, and the Ricketts legacy will be ruined.
If they did decide to move on, they would take a horrible PR hit, even if they did win it – they would simply look greedy because it would come off as not wanting to pay him.

I don’t think there is literally ANY scenario where CHOOSING to move on from Theo is a positive thing for the organization.

Jared Wyllys

I’m sort of with Norm here. I applaud Matt’s ability to make me at least entertain the notion of letting Theo walk, but I still don’t think there’s a strong case for it. True, many team executives could probably guide this team to the finish line of a World Series, but they doesn’t mean they should. From the beginning, the new ownership and eventual front office have had the mindset of rebuilding the team and surrounding culture so that the Cubs can finally end the “curse.” I just don’t trust anyone other than Theo and Jed to guide this organization to that point.

mlermo

It’s an incredibly risky move that goes counter to the culture the organization has constructed (largely at the direction of Theo). You would want the new person being brought in to sign on to the Cubs Way, but, by definition, forcing Theo out undermines it. You are advocating bringing in someone with the autonomy and leadership skills to change the Cubs and MLB (drastically so). Doing such a thing can only be seen as a rebuke to Theo when his stated goal is to stay on, to say nothing of the relationship with the team’s irreplaceable manager, who signed on only a year ago largely because of a stated alignment in baseball philosophy (and who, coincidentally, opted out of his contract with his last team when the general manager left them). I get the thought experiment, and no idea should be dismissed out of hand, but this one is fraught with risk with little to no upside.

jefflamb

This piece is well done. I saw quickly where you were going with the DARPA model and immediately thought “but they require constant innovation… baseball doesn’t, if you have a model that is working”. Alas, you covered that line of thinking.
I want another contract for Theo, mostly because I think one should get to see things through when they have done the hard work, but you made a great case.

PolitiJim (@politiJim)

Any article that makes me think is good. On that measure – this one is great. But wrong.

Commenter NORM has it right. The task is to win a World Series. In fact, according to Ricketts, it is to win MULTIPLE WS or be perennially in contention for one. That task is not done.

The Red Sox fell into disarray BECAUSE of their success and structure, not because of Theo’s management or mismanagement. He inherited a much more mature roster and was fortunate to build upon that foundation. But all that success made those mature players too expensive and the underlying culture and talent feeding system was impure.

The other management principle that is missing in this idea is that unlike a project manager – a CEO’s value is in providing structure, culture and overseeing the performance, adjustments and maintenance of OTHER managers. It isn’t just the individual deals and accomplishments that create his or her value – but their relationships, trust, confidence, focus, vision, encouragement and leadership that MAKES the other 300 people under him more effective. Just as we all recognize the importance of Joe’s leadership to the players – it is Theo’s leadership and engineering (structural, emotional and even spiritual) that allows these other things to thrive.

As someone who has been a part of over a dozen start-ups and restructured companies, I can say with all confidence removing Theo now would significantly increase the risk soars that Cubs only compete for a WS for the next year or two, instead of establishing a permanent organization (yes – like the Cardinals) that will compete for the next 10 years.

Ryan

[Ricketts hires Matthew Trueblood to inform Theo he’s being let go]

Matt: Hey, uh, Theo
Theo:Yes?
Matt: You don’t know me but I’ve been told to inform you that you’re not being reupped for another contract. You’re being let go.
Theo: (laughs uncontrollably) Go on!
Matt: Yeah, well, it’s the truth. Front offices should be replaced every 10 years. It’s a rule. With the exception of this case, where it’s 5. And while you’ve had among the most remarkable turnarounds in MLB history. And while you’ve stacked this organization with talent at every level.
Theo: (starts sobbing)
Matt: You see, you’re being replaced… but not until the end of the year. Be sure to continue doing everything right for the rest of the season. The thing is, Ricketts was so enamored and captivated by my article filled with personal anecdotes and “could maybe possibly definitely sort of” reasoning that he choose me to inform you you’re being let go. I’m also heading up the search committee to find someone you will replace you who doesn’t mind doing everything right but getting still fired after a few years. Welp, nice try though!

JoePepitone

Great article — thought provoking and contrarian. And not going to happen. Not now.

victor19nyc

You present one side, management not extending.

What if Theo decides he doesn’t want to stay for the same reason as your theory regarding management? What if he feels he’s done all he can and wishes to pad his legacy somewhere else? He has the Cubs well positioned so he will get the lion’s share of the credit when the WS is won so what’s to be gained by hanging around?

Rob

One element not discussed here is the ability of the franchise to accurately choose a new president. Assuming Hoyer were to stay and is not promoted to President, it would be rather curious for him to hire his own boss. If that is not the case, what acumen do the Ricketts family or Rain Kenney have in hiring a baseball mind? Theo was a known commodity. Hiring the next big baseball mind requires the ability to identify that trait or skill. What tools do the Cubs have to do that?

That said, such well-reasoned and provocative arguments are a pleasure to read. This site is a treasure.

Chris

“Slowly, and despite the best and most honest efforts made by brilliant and open-minded people, experience and success become drags on the process of constant, healthy change.”

This is simply incorrect. Experience empowers success. Learning a craft makes it easier, over time, to exercise that craft. Complacency or disillusion are drags.

“One of its key tenets is that those organizations tend to underestimate the ability to port knowledge capital developed by a specific individual or individuals to new ones, especially if steps are taken to codify the knowledge the organization develops in real time. They also often underestimate the availability (and so overestimate the market value) of great knowledge workers.”

The person who wrote this has never worked in the private sector. Knowledge loss is a constant threat when turning over personnel. I know this from the real world where I work. The codification of knowledge sounds good until you realize that you can’t codify the experience that uses that knowledge. You are also depending on the people who replace your knowledge workers having the same attributes that made the former ones successful. Good luck with that one.

Change should be viewed with suspicion, not embraced for its own sake.

blj60618

Great article well written, but disagree with you! Finish what you started. If they don’t resign him that’s a poor decision and that changes everything the Ricketts aimed to do to with the Cubs. If he leaves on his own than he is no better than a good used car salesman..

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