It’s the classic ‘give and take’ between two friends in Ernest Hemingway’s “The Sun Always Rises”:
“‘How did you go bankrupt?’ One friend asks. ‘Two ways’, the other responds. ‘Gradually and then suddenly’”.
It’s a memorable quote from a famous novel, and it’s often used to describe how life-altering change is often slow to develop and notice – but when it comes it does so hard, fast and complete. And it’s a quote that applies to persons, to businesses, and even to professional sports teams. Especially to the Chicago White Sox, which in only a few years has fallen from a legitimate World Series contender to cellar dweller extraordinaire.
For the 2024 Sox are now – officially – the worst team in baseball history. With their September 27th loss to the Detroit Tigers, they surpassed the previous record of 120 losses, earned by the 1962 New York Mets – an expansion team in its first season of play.
That’s no easy trick, considering that Major League Baseball was formed in 1876, and is the oldest major professional sports league. It’s particularly jarring for a team that went to the playoffs in both 2020 and 2021.
And the depths of the White Sox’ awfulness go beyond the won-loss record. They set a new team record with 16 straight home defeats. They’ve been swept in a three game series 24 times this season (to date). They tied the American League record for most consecutive team losses (21). By any measure and for any industry, the season represents organizational performance at an historically bad level.
But from this experience of futility can be drawn a few useful board leadership lessons:
Oversight: As the team’s Chairman recently observed, “We didn’t arrive here overnight”. Indeed, the seeds of futility were sown over many prior years; apparently going either unnoticed or unaddressed. And that speaks loudly to the critical importance of leadership oversight in any business: that even during periods of great success, senior leadership must remain vigilant to the warning signs of decay and decline.
Business Model Management: Senior leadership should be constantly monitoring whether the company’s business model allows it to compete within its industry sector. While the economics of major league baseball are ridiculous, the White Sox have been reluctant to engage at the same level as other teams. For example, they are one of only two teams that have never spent $100 million or more on a single-player contract.
Diversity of Perspective: While there is always value in retaining competent executives within the management team, there’s also value in adding personnel from outside the organization to provide new perspectives. The White Sox have been notorious for their insularity; an unwillingness to hire executives from outside the organization. Indeed, the team hired its new general manager from within, without the benefit of an external search process.
Investment: The White Sox have been historically reluctant to invest materially in their product- whether it be for facilities, technology, talent, player development, coaches or even charter aircraft. They’ve already announced plans for a much reduced payroll in 2025. Such practices are a prominent reminder that even the most successful businesses will not remain so if they don’t make continuous investments in their operations.
Adaptability: Corporate leadership must assure that management is flexible enough to evolve with changes to the business, political and social environments. White Sox management has long been thought of as calcified in its strategies, disinclined to make changes, and not evolving with the rest of the sport. It’s a practice exemplified by a reluctance to embrace analytics as a key baseball performance tool.
Experience is No Guarantee of Success: The White Sox ownership group includes individuals who have been extremely successful in both business, and in professional sports. The principal owner has won six championships with the Chicago Bulls. The team is also rightfully known for its social consciousness and its commitment to the City of Chicago. None of that has proven sufficient to prevent the current debacle.
Collateral Harm: Business failure rarely limits its damage to the shareholders and principal management. There is often collateral damage – to employees, vendors, communities and customers. The White Sox’ collapse has not only affected the players and the fans, but also the vendors and service employees around the ballpark whose livelihood depends upon healthy fan support.
The Chicago White Sox is a foundational franchise of the American Pastime. It’s a billion-dollar business representing the third largest city in the country. In every sense of the word, it’s a prominent business organization.
And when such a prominent business becomes “the worst ever” in its particular industry, business leaders across industries should take note. To consider the reasons for its fall, and whether they be gradual or sudden in their timing – or both.
Yet the sun may also rise again someday for the White Sox. Because baseball’s most intrinsic charm is hope.