By Robert Holton
Operating a successful Major League Baseball franchise takes a great team, and not just the guys on the field. At a recent event, Rick Schlesinger outlined what it takes to build a winning organization behind the scenes. Over 11 seasons with the Milwaukee Brewers, the last three as COO, he has helped them eclipse nearly every record for business performance, from increasing average season attendance nearly 70% since 2003 to increasing annual marketing sponsorship revenue by 150% since 2005. The Milwaukee Brewers are a dynamic and growing sports franchise. Here are five key areas they focus on inside the operations, reorganized here in a convenient acronym-CHEER!
Build a work environment to encourage creativity, which can dynamically respond to the challenges an organization will face. Schlesinger shared specific ideas to facilitate such an environment.
First, break silos. Don't allow one part of your organization to build up resistance to other parts of the operation. In the Brewers organization this means the creation of interdisciplinary task forces to accomplish specific goals. They believe words matter and quickly squash any talk of us vs. them, sales vs. marketing. Schlesinger preaches "We are all one team." But he still allows employees to hash out disagreements themselves rather than get involved too early. Let them fight, as long as they fight nice, only intervening if the issue seems intractable. For a family business, finding ways for family members to work together through conflict is critical to a well-functioning team. Interestingly, he also avoids off work team building events, as they intrude on family life and don't allow employees to relax fully.
Second, question the boss. From the top of the organization on down, there must be some freedom to express opposition or new ideas. Schlesinger shared a trick used in the Brewers organization. From the top to the bottom, each person honors the well-worn military phrase "Permission to speak freely?" That phrase emotionally prepares the supervisor for a new idea, opens up an avenue for communication, and gives the supervisor the right to decline input if necessary. This can be particularly useful to break through the established communication patterns in our family businesses when issues of generational leadership are involved, such as the communication between a parent and a child.
Third, question the status quo. For the Brewers organization this means refusing to ever think "small market." In the Wisconsin area, there is another professional sports team which has transcended any label of small market-the Green Bay Packers. Forbes ranked the Green Bay Packers as the 24th most valuable sports team in the world for 2014, which is not bad for a group of local owners in a town of just over 100,000 people. Nothing is gained in thinking too small. What could your family business gain by thinking beyond the current efforts?
An organization's performance is driven entirely by the talent of the employees, and focusing on diversity positively contributes to that talent.
A mutual commitment to both growing the best and hiring the best is the only way Schlesinger believes an organization can only ensure the best talent. This commitment may mean allowing people to leave in order to grow in another organization where opportunities might be present which are not currently in your organization. Schlesinger believes in allowing these types of transitions without opposition, rather with open encouragement, in order to build a reputation as a great employer, an employer truly placing the employee first. Perhaps a family member needs to leave the business to grow personally in their career. Embrace the opportunity for them to grow and understand they will return if the environment remains open and welcoming.
Another critical component of becoming a great employer is the cultivation of diversity. The Milwaukee Brewers organization is one of the best in baseball in hiring and promoting women into executive roles. They are also actively working on efforts to achieve similar results for other minority groups. This is not simply a passive openness to hiring diversity, this is an active effort from top to bottom to find minority talent and grow them into the roles the organization needs filled. Diversity promotes new ideas, new approaches, and a more inclusive environment, which all improve the organization and drive bottom-line results. This may simply mean expanding outside the family for executive advice, but should also include all forms of diversity, to maximize the potential talent pool for your firm.
Place people in the roles they are best suited to and then provide them with the resources they need to succeed.
In business, as in sports, there is no true equilibrium according to Schlesinger. As he sees it, when things are going great, leadership is easy as current objectives are being accomplished. When things are at rock bottom, leadership is also easy as the future objectives are clear. The true test of a leader is when business is at a crossroads, when the objectives are unclear and the path forward is muddled. When at a crossroads, Schlesinger contends a great leader must do the following:
- Identify opportunities and dangers. A leader accomplishes this by listening; listening to customers, listening to employees, listening to the community.
- Devise strategies. A leader must both think creatively and actively invite input from the team for more creativity and as a sounding board for ideas to take advantage of opportunities.
- Set the path. A leader must implement clear, actionable plans to accomplish the desired strategy.
- Delegate. A leader must delegate both the tasks and the responsibilities required to achieve the desired path.
The most powerful example Schlesinger provided may also have been the most challenging of his career, the suspension of Ryan Braun. When the Milwaukee Brewer's star player, the 2011 MVP of the league, was suspended for 65 games to conclude the 2013 season, Schlesinger knew he had a daunting challenge. He had to rebuild the trust of the community in order to salvage attendance for the season. So he devised a strategy he wasn't sure ownership would support-to give away vouchers for $10 worth of merchandise with every ticket. He approached Mark Attanasio, the Brewer's owner, with a plan to provide the vouchers for an entire series in September, which would cost the organization about $90,000 assuming average attendance. Mark responded-"Why not August?" A series in August? No. A home stand in August? No. He suggested the entire month of August. The promotion cost the organization approximately $3.8 million. But the faith of the public in the sincerity of ownership was restored. All from a creative idea, fully empowered. What ideas, what new approaches are not fully empowered in your business? What would happen if they were?
Develop clear, aspirational goals and consistently hold one another accountable for achieving those goals.
One goal of the Milwaukee Brewers organization is to constantly improve the team on the field. First build a playoff caliber team, then a playoff winning team, then a world champion. This is an iterative process-build, develop, achieve, repeat. The same is true of the operations of the team. They are seeking to build to three million fans in attendance in a season. They want to build a coveted brand, transcending the local geographic market. To build progressively higher levels of accomplishment, each member of the team needs to be aligned to these aspirational goals of the organization. These cannot be forced or assumed. The same is true in the family business. Simply being in the family does not necessarily equate to alignment with the goals. They must be voiced, discussed, and agreed upon.
Each individual also is held accountable to clear, aspirational individual goals. They must be achievable and measurable, but just as importantly, should constantly strive for something greater. If the goals are properly aligned and personally meaningful, an employee can be both engaged in the accomplishment of the greater goal and also held accountable to personal performance. These two work in conjunction, not in isolation. When an employee cannot clearly define how their efforts drive organizational accomplishment, they become unengaged, and efforts to enforce accountability are futile. And if enforcement is lacking or selective, especially with a family member, employees quickly disengage.
Find uniquely powerful ways to reward both individuals for their accomplishments.
Money matters. Schlesinger appreciates the many ways employees can be incentivized, but in the end, he believes money matters. His advice begins with providing an employee with a good base salary, competitive to the market and appropriate to the role. Then layer in a high level of incentives, and not trips and trinkets, but cash. By ensuring employees are making above market income, an organization can hold employees to above market performance. In our family business, we cannot demand performance because someone is family; we have to pay for it. To demand it creates only lingering resentment.
After the organization has provided an excellent earning opportunity, Schlesinger adds a final layer: thoughtful rewards. The baseball season is a fixed calendar. The finite season and the inflexible deadlines create a uniquely stressful environment. Recently, when an employee finally got a day off during the season to take his wife out for their anniversary, Schlesinger called the restaurant and picked up the tab. A simple and inexpensive gesture, but it acknowledged what mattered to the employee in a very personal way. Effective organizations find creative ways to make personally meaningful gestures.
These ideas are not easily executed and require not only initial implementation, but constant support. The net result however may just be an organization which causes both employees and customers to CHEER!
Robert Holton is a vice president in Milwaukee-based Cleary Gull's Wealth Management Group.