The Cardinals Way (9 page)

Luhnow even met Cardinals manager Tony La Russa, though it wasn't their first meeting.

“Tony had just gotten the win that made him third-winningest manager, so they were going to present him with a watch on the last week they were with him,” Luhnow recalled. “I went into the club to watch them present Tony with a watch, and interestingly enough, Tony and I, our paths had crossed in '99. I was head of marketing for
PetStore.com
and we were trying to do a relationship with the ARF, which is the foundation he runs, and I had supported their fund-raiser. He came to our warehouse, and I met him. I remember talking to him, and he had gotten on the phone with Walt Jocketty, and they were thinking about a trade where they got [Pat] Hentgen and [Mike] Matheny. And he said, ‘What do you think?' And I knew enough about all these players where I was able to give me my point of view. He was, like, ‘Oh, you actually know something about baseball.' And Tony gave me tickets to go to the game when the Cardinals were in town against the Giants.

“So we had that connection and I remember giving Tony a bag. Like a briefcase. And fast-forward [four] years and I'm in his office and Bill DeWitt's giving him this watch, and Tony says to me, ‘I still have the bag.' And I thought, ‘Oh my God. He remembers me. Like, how is that even possible?' I didn't say [anything about the last meeting], and he was, like, ‘I still have the bag.'

“So I'm thinking, ‘What is Tony thinking? Here's the
PetStore.com
marketing guy in with DeWitt. What is going on here?' And it was strange.”

Bill and Jeff first talked in August 2003. At the time, the Cardinals were locked in a three-way race in the National League Central with the Astros and the Cubs. They'd finish 85-77, three games out, the only season between 2000 and 2005 when they'd fail to win 90+ games. They slipped to 83 in 2006, but it's hard to call that a lost season: the Cardinals made the play-offs and won the 2006 World Series.

“I think what led up to it, Bill just had some ideas,” Walt Jocketty, the team's general manager from 1995 to 2007, recalled in a January 2015 interview. “And he wanted to try some different ideas. And at first I resisted, because I thought we were pretty successful in the way we were doing it.

“And I think as time passed, one thing I did regret, in hindsight, was probably not agreeing to adapt more quickly than I did. We really hadn't done a lot with analytics, and that type of information. And I think it was also working with a manager and a coaching staff that weren't really that adept at that either. And they resisted it initially as well.”

So consider for a moment how Bill DeWitt Jr. might have been thought of in St. Louis as he changed what was working with the Cardinals. The coming years provided scores of critics, both within and outside the organization. If the new direction for the team had faltered, the change would have seemed like the reason.

“I never thought about my legacy if success had not followed what I believed to be the optimal process,” DeWitt told me in November 2014. “Of course you are right that there was no assurance that good outcomes necessarily follow good process. The challenge at the time was to change the organizational culture, and it wasn't easy, particularly with the on-field success we were having. It was easy for those who disagreed with the approach to be critical, and this worked its way into the media. There was never any question in my mind, however, that this was the correct path for the Cardinals, and I was prepared to live with the results despite the disruption and scrutiny.”

Or as former Cardinals executive, now Athletics Assistant General Manager Dan Kantrovitz put it to me, “The bottom line is, Bill had the courage to fix something that wasn't necessarily broken.”

A month after his initial meeting with Jeff, Bill DeWitt prepared a memo, which he shared with a few senior members of the organization, about his new hire, Luhnow. His proposed role bears more than a passing resemblance to that Bill DeWitt Jr. signed up for with the Reds back in 1967.

I asked Bill why he didn't take on the role himself. After all, implementing these principles had been a lifelong pursuit of his. Plenty of owners with far less expertise meddle with their teams or flat out ruin them. But perhaps it is precisely the intelligence that separates DeWitt from a James Dolan of the Knicks or Jerry Jones of the Cowboys that convinced him to delegate that role.

“No,” DeWitt said, laughing, when I posed the question to him in September 2014.

“First of all, I was running the overall franchise. We had a lot going on, especially efforts to build a new stadium. That was a specific, full-time job at the time. I just figured I'd get the right person in there. And I'm not sure I could have done it. Someone at that age, with those computer skills, is what we needed. I always, in everything I've done, I've tried to get smart people around me. The smarter the better. And let them figure it out.”

DeWitt returned to this himself, later in the same conversation. “Jeff hired Sig [Mejdal]. It's kind of, like, why didn't I do Jeff's job? Why didn't Jeff do Sig's job? Because you want to bring in smarter and smarter people.”

MEMORANDUM

I have been concerned for some time that our player procurement process and professional player evaluation system have not been at a level to give us a competitive advantage within Major League Baseball and in certain areas have in fact been below average. It is critical to the success of our franchise that we endeavor to correct this, and my goal would be to put us at the forefront in these areas to take advantage of what is certainly an inefficient market.

I would propose to establish a position under Walt titled Vice President of Baseball Development. Enclosed is a description I have developed of what this job would entail, and I am very excited to have come across an individual who, I believe, is ideally suited to take on this important role.

His name is Jeff Luhnow, and he is 37 years old. Although his family is originally from the East Coast, Jeff grew up in Mexico City and, of course, is very fluent in Spanish. He is a graduate of the University of Pennsylvania with a joint degree in Economics and Engineering and has an MBA from Northwestern. Following graduate school, Jeff worked for McKinsey and Co. in Chicago for five years where he was ranked at the top of his class, achieved pre-partner status at the earliest possible age, and was on track to become a partner when he left to pursue an Internet opportunity in California. From there he became a founder and C.O.O. of an Internet startup which has grown, appears to be on a successful track, and has continued to be funded by sophisticated venture funds in a very difficult climate. Jeff designed and implemented the information technology system and currently manages 35 employees.

The reason Jeff would leave his current position, which has substantial upside with his management warrants, is he is a baseball “nut.” He has always been a huge fan who follows and studies the game in his spare time including the extensive scientific work which has been developed over the last 20 years. He almost bought a minor league team a couple of years ago and has always wanted to be involved in baseball. I became aware of Jeff through Jay Kern, who worked with him and vouches for his talent and importantly, his personal qualities. He would fit in very well with our organization. I think he presents a unique opportunity for us to bring to the Cardinals a high level McKinsey talent at a below market price to fill a very challenging and important position.

 

VICE PRESIDENT OF BASEBALL DEVELOPMENT

Responsibilities

1. Establish methods of evaluation for amateur players.

        A. Based on existing data and history, what are best predictors of success, e.g., tools, intangibles (makeup), performance, etc. Look backwards from MLB and forward from amateur signings.

        B. Determine risk/reward parameters for various categories of draft, including high school, college, pitchers, position players and combinations thereof.

        C. Research and assess cost/benefit analysis for outside U.S.; Dominican Republic, Venezuela, Asia and elsewhere.

2. Based on information generated from the above, determine the best organizational structure and allocation of resources to achieve our basic goal: to acquire players on a real value basis with maximum market efficiency.

3. Develop and establish information technology system relative to professional player personnel.

        A. Build data base for professional players with maximum relevant information for each player.

        B. Establish a model to evaluate a player's contribution to winning which will help quantify a player's financial value and therefore determine what he should be paid.

        C. Model would include a forecast or a prediction of future success. Types of relevant information will include age of increasing, peak, and declining performance, ball park impact, performance to date, likelihood of injury, length of time in minors, etc.

4. The overall objective of this knowledge based and systematic approach is to enable the Cardinals to make the best possible player decisions, including financial commitments, and to take advantage of the inefficient market.

Luhnow soon had to employ one of the most significant attributes Kern touted to his father-in-law: an ability to withstand criticism.

“I was in charge of recruiting for both Northwestern and from Chicago,” Luhnow said. “From the McKinsey Chicago office. And [Kern] was one of the top recruits. He did a summer internship. I recruited him to come back full-time. He had offers to go work in Wall Street. We got him back full-time. I was working for a manager who was known as one of the toughest managers in the office. She was really, really tough on people. And I didn't have any problem with her at all. Jay rolled onto a study that I was rolling off of and took my role on the study with an insurance company, and this woman became his manager, and he sort of freaked out. He had a tough time handling her because she was a micromanager. Jay's a really smart guy, I mean he's really capable, but they didn't get along at all. And I remember Jay saying, ‘I can't believe you survived under this manager. You must have a really thick skin. You must have a really great way of getting along with people that I don't have.' Because I'm not sure that's the study that drove him from the firm, but he ended up leaving the firm shortly after that.

“I think he felt that if I could survive under her that I could probably survive the rough-and-tumble baseball world. He anticipated some negative reaction to someone like me coming in. He communicated to Bill that this guy, one of his strengths is that he's got a thick skin and he's not going to be easily pushed aside by some of the traditional baseball guys.”

Understand this: over the past decade, baseball has come a long way on the idea that those who didn't play the game can eventually run it. When Luhnow was hired, the use of statistical analysis by the A's was an anomaly. Now, clubs that
don't
rely on such analysis are very much the anomaly. Clubs without an analytics department don't exist. Theo Epstein, don't forget, was a widely mocked hire back in 2002. That he was a breakthrough in any number of ways for the sport didn't gain widespread acceptance until he broke a little eighty-six-year-old streak in Boston.

But even today, someone with Jeff Luhnow's background, brought in with a relatively senior title (vice president of baseball development) and an expansive portfolio, would be looked upon suspiciously by many people within a major league organization.

And this wasn't just a major league organization. This was the St. Louis Cardinals. And while there were a few around who'd internalized what George Kissell stood for—the constant innovation that he'd learned from Branch Rickey, the consistent adding to and changing of his manual first scripted decades ago during a snowy Ithaca winter—for many others, the Cardinals were this static, successful thing.

“When you think about the timing—okay?—'03 was not a great year for us,” Mozeliak told me in a January 2015 interview. “Wasn't awful, but wasn't great … and Walt at the time was probably considered one of the top five general managers in the game. And then subsequently, Bill brings in Jeff, and I think Walt had a hard time with that because it wasn't his decision to bring him in. It wasn't necessarily his type of person to be around from a personality standpoint. And now fast-forward from October of '03 to now, say, July of '04, guess what? The St. Louis Cardinals are a pretty damn good baseball team all of sudden. Right? And so I think, in Walt's case, he was, like, ‘We knew what we're doing.' We subsequently win 105 games. We go on to the World Series. And I think he felt, like, ‘Jeez, maybe we weren't that bad off.'”

And some guy from McKinsey was going to come along and ruin it.

“But if you think of it from Jeff's perspective, that he was brought in by the owner, you know? The owner,” Mejdal, who joined Luhnow with the Cardinals in 2005, told me in an October 2014 interview. “At a time the team was winning. There weren't many people with his background in baseball at that time. I can say that the resentment of the portrayal of scouts in
Moneyball
was quite fresh in people's minds. And Jeff was brought into a system that wasn't particularly interested in having him in that system.… I think that's a description of what ground rules were like when he came in.”

Or as Mozeliak put it, “I don't think Walt trusted him, and I don't think Walt liked him. And from that standpoint, that was where it began.”

Precisely how huge an advantage the Cardinals had just given themselves came into focus early on, in a meeting with the analytics team.