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Phillies must develop an organizational business model
by Scott Butler 7/1/13

Google something today and then Google the same thing tomorrow. You might find that the word Google looks different, the search bar looks bigger, or more search results appear on each page. Whenever you search, chances are something will be different because Google is constantly changing - it is part of the Google business model. Before making changes, most companies run focus groups, create surveys, and hold endless meetings, but Google is the exact opposite. Google devises an idea, puts it out there, and waits to see what happens – they shoot first and ask questions second.

The Google model is one of the most innovative and unique, but all good companies follow a business model that drives everything they do – including Major League Baseball teams.

The George Steinbrenner Yankees had a model. Their model was to pursue the best players and empty their wallets to obtain them – win by outbidding their opponents. The Tampa Bay Rays, on the other hand, have one of the lowest payrolls. Their model is to trade stars before reaching free agency and lean on a superior farm system to remain competitive. The Miami Marlins, handcuffed by similar revenue constraints, follow a model in which they stockpile their young stars, hope to win a World Series, and then dump them all at once before free agency and start again from scratch. And then there is the famous Moneyball model with a focus on Sabermetrics, avoiding free agent contracts, and identifying undervalued players.

The model for the Philadelphia Phillies is unclear. David Montgomery said in an interview in July of 2009 that he would prefer to remain in contention for a title each year rather than put all his eggs in one basket on one particular season. The fact that Ruben Amaro did the exact opposite, continually trading prospects to acquire top free agents, suggests the Phillies do not have a clear model.

In this first installment in a five-part series, we will examine what their business model should look like, how the Phillies failed by not developing a model, what that model should look like, and how it affects the Phillies in 2013 and beyond.

The Phillies must develop their organizational philosophy immediately. On a team with numerous aging veterans, a high payroll with little wiggle room, a sub .500 record, and a manager in the final year of his contract, the Phillies are at a crossroads. Now more than ever, a clear business model is crucial to the organization's success.

The Phillies should develop a model like the Atlanta Braves. The Braves model produced 14 straight division titles from 1991-2005 followed by winning seasons in 5 of the 7 years since. In the last 21 seasons, the Braves produced winning clubs in all but two seasons, reached the playoffs 16 times, and made 5 World Series appearances.

What smacks their model in the face is the number one, as in 1 championship in those 21 seasons. Since their first division title in 1991, six teams have won multiple championships while the Braves have just one. If number of championships is the only definition of success, the Braves fall far short.

But a lack of championships is not an indictment on the model itself. The fact is, championships are not easy to come by and there is an incredible amount of luck involved in the playoffs – how else can you explain more Phillies wins every year since 2008 and earlier playoff exits each season?

The goal, as the Braves would likely assert, should be contention over domination. The St. Louis Cardinals serve as a great example. The Cards won two World Series in the last seven seasons with an 83-win team in 2006 and a 90-win team 2011, just sneaking in the playoffs on both occasions. However, they lost with a 100-win team in 2005 and a 105-win team in 2004.

We can also use our Phillies as an example. The Phillies were champs in 2008 with just 92 wins, yet lost in the first round in 2011 with the best record in the club’s 131-year existence to a Cardinals team with 90 wins. The takeaway is that since the best team on paper rarely wins, the decision for a contending team to compromise long-term plans on a marquee player is oftentimes not a shrewd decision.

By not following a business plan like the Atlanta Braves, the Phillies severely injured the sustained success of their franchise. Ruben Amaro walked into a great situation when he took over as GM after the 2008 season. He had a terrific core of young players, a high payroll, and a healthy farm system. Rather than parlay that into a decade of continued growth, he pushed all of his chips in the middle of the table, hoped to hit big, and was willing to walk away empty-handed when he was finished.

In the second article in this five-part series, we will examine how the Phillies allowed the gift of an amazing core of players to become a curse during Ruben Amaro's five-year tenure.

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Next article: Phillies business model part two: the curse of the core

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