I first heard about an organization developing leadership from within, by Ashish Nanda, at the 2006 Leadership Summit. Ashish Nanda is a Harvard Professor with a PhD in Business Economics from Harvard. Nanda’s talk was fascinating.

Nanda talked about when businesses get in the practice of hiring “stars”. “Stars” tend to perform poorer at their new organization, and the performance of their new coworkers also drops. Why is this? A star doesn’t know the people, the team, the environment, the culture, and more. A coworker within the organization has their performance drop because they don’t see any chance for promotion within the organization they had been loyal to.

One of the examples Nanda shared, about an organization doing it the right way, was the 2004 Boston Red Sox. The Red Sox had started to develop a culture and system in developing players from within their organization. Sure, they signed free agents, but they were specific about their needs and making sure they fit the culture. As Nanda stressed, in relating it back to businesses, “There are no shortcuts, loyal staff are developed from within.”

The Red Sox philosophy has changed a lot since then. They’ve slowly drifted into the process of hiring stars, and the end of the 2011 season saw them reap what they have sown with having this mindset the past few seasons.

Since the end of the 2006 season, the Red Sox have signed the likes of J.D. Drew, Daisuke Matsuzaka, John Lackey and Carl Crawford to multi-million dollar deals.

Speaking of Carl Crawford, what do the numbers $14.9 million and 0.2 represent? His 2011 season.

Crawford’s 2011 salary was $14,857,143. He was a free agent signing, by the Red Sox, last offseason, and the average annual value of his current contract is the third highest for an outfielder…of all time. You’d think with paying someone that kind of money you’d get a better return than 0.2*, which represents his WAR. In simple terms, WAR stands for “wins above replacement”, the amount of wins you get with a player in place of a replacement player at that position.

*I’m being nice in going with Crawford’s FanGraphs WAR. His WAR on Baseball Reference? 0.0

In 2011, Carl Crawford, and his salary, garnered the Red Sox an extra .2 wins over an average outfielder. The Red Sox finished 1 game behind Tampa Bay for the final playoff spot. 18 other AL outfielders, with enough at bats, had a 2.2 or higher WAR for the 2011 season. A +2 differential that would’ve (theoretically) helped the Red Sox make the playoffs. Some of these players are Jeff Francouer (2.9 WAR, $2.5 million), Matt Joyce (3.8, $426,500), Peter Bourjos (4.1, $424,000), Adam Jones (2.9, $3.25 million) and Coco Crisp (2.2, $5.75 million).

The combined 2011 salary of those players? Just under $12.5 million, or $2 million and change under Carl Crawford’s salary. Combined WAR? 15.9.

Boston finished with a record of 90-72 while playing in the toughest division in baseball. Most organizations would be ecstatic with a season like that, so why not the Red Sox? The Red Sox went 7-20 in the month of September. If they only go 9-18, they make the playoffs. How does that happen to a team that had been the best team in baseball the previous four months?

What creeped out throughout the last weeks of the season is a clubhouse that is the antithesis of the 2004 and 2007 World Series winning teams. Most players were worried about themselves only, and cliques formed. It wasn’t a team, so when things went bad the players didn’t rally around one another. And while it’s hard to interpret the mindset of a player through a television, you can sometimes tell a player is not concerned about his teammates. For instance, starting pitcher John Lackey didn’t do himself any favors with his histrionics.

Part of the reason the collapse happens is because the practice of the Red Sox now, primarily GM Theo Epstein, is hiring stars. A number of the players on the current roster haven’t been steeped in the culture of the organization. They are signed for multi-million dollar deals and don’t care about the organization the way someone who was developed from within might care. I don’t think John Lackey, Carl Crawford and Adrian Gonzalez are going to care as much about the team like Dustin Pedroia.

Another thing about those star players, that were brought in from other organizations, is they don’t have the experience of playing in an environment like Boston. Playing in Anaheim (Lackey), Tampa Bay (Crawford) and San Diego (Gonzalez) is a walk in the park compared with playing in Boston. When they are thrust into that environment of playing in Boston, with the expectations that come with signing a huge contract, they don’t always respond well. A player that has been brought up in the Red Sox organization has a better grasp of playing in Boston.

When these star players respond poorly, their attitude and entitlement affects the rest of the team. It if was just one player, that might be manageable. Boston has started to acquire a lot of them.

When the season ended, Red Sox Manager Terry Francona talked about the difficulty in dealing with the clubhouse. I think that’s an understatement. Who is at fault for assembling that clubhouse? It’s not Terry Francona, it’s Theo Epstein. It’s not surprising, but it is disappointing, that the Red Sox would force out Francona for results that are not of his making.

“There are no shortcuts,” Ashish Nanda said. Unfortunately, the Red Sox have tried to take shortcuts in winning another World Series. They’ve overspent on a number of contracts and are stuck with players who aren’t committed to the organization.

What looked to be a promising season has turned disastrous. Looking back, the signs are there for this, but who would’ve predicted such a collapse? It’s a case study for the problem with hiring stars.

Related links:
Unlikable Red Sox flunked chemistry by Jackie MacMullan
Farewells reveal rift between Francona, ownership by Sean McAdam
Francona is the toughest loss yet by Chad Finn

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