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Worst to First: 4 Startup Lessons From the Boston Red Sox

After 93 losses in 2012, the Boston Red Sox won the World Series this year. Here's what you should learn.
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The Boston Red Sox won the 2013 World Series--fulfilling my daughter’s birthday wish for me. But in 2012, the Red Sox finished the season in last place in their division. Their journey from worst to first offers some valuable lessons for your start-up.

To be sure, the parallels between a 106 year old sports dynasty and your start-up are incomplete. After all, the Red Sox have different individuals who do many of the jobs-- such as owner, general manager, and coach -- that you combine into one.

But in reading Bleacher Report’s analysis of how the Red Sox turned themselves around this season after 93 losses in 2012, I see four valuable start-up lessons.

1. Listen to your people. If you are a just getting your venture off the ground or taking over the helm from a technical company founder, the first thing you need to do is listen to what your employees are saying to you.

Generally, this is easier to do if you are new to the start-up CEO job. That’s because you can come into the organization as someone who is not the one who made all the decisions that you are inheriting.

So if people are unhappy, you should be in a position to listen to them with a clear mind - unfiltered by the defensiveness that comes from having to react effectively to your bad decisions.

This comes to mind in considering the actions of Red Sox general manager Ben Cherington who took over in 2011. Cherrington’s first year was a disaster - after all, he hired Bobby Valentine as the team’s manager and he angered the players.

According to Jeff Passan of Yahoo! Sports, on August 14, 2012, Red Sox players went to the Red Sox owners John Henry and Larry Lucchino and harshly criticized Valentine during a meeting called after a text message was sent by a group of frustrated players to the team and ownership.

Red Sox ownership realized that it needed to change.

2. Fix your mistakes. As an entrepreneur, you are getting negative feedback all the time. You need to decide whether that feedback is signal or noise and whether you are the cause or can be an agent of change who can solve the problem.

In the case of the Red Sox, that blistering August 2012 meeting between players and owners caused management to realize that the feedback was a signal that must be obeyed and that Cherrington was not only responsible in part for the problem, but that he could also be an agent of change to fix it.

In your start-up, you may be able to play the same role that Cherrington did. Or you might need to kick yourself out of the CEO role and hire someone who can fix the problems that you created.

3. Replace your expensive disruptors with lower-priced team players. In your start-up you may have spent too much money hiring big name talent that does not fit with your culture - or is simply costing too much money. If you realize that this is your problem, will you have the courage to replace the expensive disruptors with lower priced team players?

That’s sort of what Cherrington was able to do on August 25, 2012 when he traded a group of expensive players (not necessarily disruptors) -- Adrian Gonzalez, Carl Crawford, Josh Beckett and Nick Punto with 2013 salary obligations totaling $250 million -- for a group of lower-priced players from the Los Angeles Dodgers.

By lowering the Red Sox burn rate, Cherrington could also afford to bring on the team members -- like Shane Victorino, Mike Napoli, Jonny Gomes, Koji Uehara and Stephen Drew - who helped the team win the 2013 World Series.

If your team is not working as effectively as it needs to, a lesson that you can take from the Red Sox is to lower your burn rate and bring in a team willing to accept less pay who share your values.

4. Be (or hire) a great leader. If your start-up is getting bad feedback, the reason may be that you are not a great leader. Your investors may force you to hire your replacement; they might suggest that you get help; or you may be a great enough leader that you can reinvent yourself on the fly.

And when it came to the 2012 Red Sox, Cherrington’s challenge was not just to fire Valentine but to find a great manager to replace him. And that came on October 21, 2012 when Cherington hired former Red Sox pitching coach John Farrell to replace Valentine.

Cherrington was hiring Farrell, in part, because he could lead a team with a set of values that were inherent to the Red Sox and to players like Victorino, Gomes, and Uehara.

As Bleacher Report wrote, “All these players were lauded for their easygoing approach to the game and bringing Boston baseball back to the forefront. It is a testament to the job Cherington did-;not just signing them but going through a vetting process to ensure these players could handle the intense scrutiny that comes with being a member of the Red Sox.“

Like the Red Sox, you need to have a strong culture and make sure that every member of your team fully shares the values that you set.

Last updated: Nov 5, 2013

PETER COHAN

Strategy consultant, startup investor, teacher, corporate speaker, pundit, and author of 11 books, Peter Cohan has invested in six startups, three of which were sold for a total of $2 billion. Before founding Peter S. Cohan & Associates in 1994, he worked with HBS strategy guru Michael E. Porter.




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