Last week, I had the opportunity to attend the third annual National Middle Market Summit, in Columbus, Ohio, hosted by GE Capital, The Ohio State University Fisher College of Business, and the National Center for the Middle Market (NCMM), along with 1,000 business leaders, academics and industry experts in attendance.Billy Beane headlined at the conference, but it was a number of the other speakers who demonstrated that his baseball strategy applies more broadly to building a successful business. The first, Professor Anil Makhija, is academic director of the NCMM. Professor Makhija set the stage for the conference with a simple point: Success isn't usually the result of happenstance, it's thoughtfully engineered. He reviewed recent research by the NCMM that broke middle market businesses into four groups - decliners, stallers, breakouts, and sustainers - based on their revenue growth over time. Sustainers represented the most successful set of businesses, driving year-over-year growth consistently, despite operating in changing market conditions.
Only 1 percent of all middle market businesses proved to be "sustainers" in their study. Makhija reported that while it would be natural to assume that market conditions, market segment or business type, or business stage would be primary determiners of which companies achieved sustained growth, it proved to be none of these. Businesses that achieved extraordinary performance shared the same priorities, and on top of that list was successful team building.
But how does one build a successful team? Speakers later in the day offered some practical advice.
1. Choose the right team. When asked what one recommendation he would offer to the group of assembled business leaders, former Secretary of the Treasury Hank Paulson suggested, "Have the right people in the right chairs." Paulson further explained that he had met some of the greatest leaders in the world in both the private and public sectors. Every leader had a unique set of strengths and weaknesses, often on the opposite sides of the same coin. The most successful of them actively chose teams that compensated for their own shortcomings. We might lack the statistical proof that drove the Moneyball picks, but the same underlying concept of building a team of complementary skills holds true.
2. Define jobs expansively. Under Armour's founder and CEO's tip was to let leaders play their kind of ball through defining their jobs expansively. Kevin Plank explained that leaders will capitalize on opportunities and solve problems if their jobs are defined broadly and if they have significant latitude about where to focus and deploy resources.
3. Empower them to act. Plank joked that he had once proudly told a prospective investor that he signed every check for the business himself. "What," replied the investor, "you can't find someone to write checks for you?" Plank explained that CEOs must truly empower members of their team to maximize their success and to enable the CEO to have time to think strategically about the business. Both Secretary Paulson and The Washington Post Company chairman and CEO Donald Graham reflected on the importance of hiring people with absolute integrity. You must trust your team absolutely to rely on them.
4. Hold them accountable. Secretary Paulson reminded the audience that with authority comes responsibility. Teams that are empowered to act must be held accountable for the things they agree to do. If they are empowered, teams will respect those commitments and those made in the future.
In baseball, new statistics are created with every pitch. It's easier to measure the strengths and weaknesses of a player when you can observe their performance, repeatedly, in a variety of situations. That measurement provides guidance on how to assemble a team that will deliver results and allows a manager to measure the team against their potential.
The slate at the National Middle Market Summit made clear that, in business, we need to work actively to understand the strengths and weaknesses of each member of the team we assemble. As leaders, we need to leverage the strengths of different members to make up for our own shortfalls, as well as those of other leaders in the organization. And we need to use the KPIs we establish, measured against the commitments we make, to assess our team's progress and hold them accountable for the commitments they make. When we do this well, we take the first step to winning at the real Moneyball.
Tom Gerace is an NCMM contributor and founder and CEO of Skyword, a content marketing company. Prior to founding Skyword, Gerace also founded Be Free, a publicly traded online marketing services company. Follow him on Twitter.