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Saturday, October 20, 2007
The Torre Travesty -- A Dysfunctional Family Business
Over the last 35 years, one constant refrain in New York sports has been the on and off-field soap opera known as the Yankees. The latest act was the attempt or non-attempt to secure a new contract for its now former manager Joe Torre. Many journalists and fans have expressed their views, with an overwhelming sentiment that Torre was poorly treated by the team. That view was reinforced by his press conference where he concluded that the team's offer of a one-year, incentive-laden contract was an insult based on his success as manager of the team over the last 12 years. I tend to agree with this view.
But that is not why I'm writing. Instead of my legal cap, I'm putting on my business school hat to analyze what went wrong from a tactical and managerial view and how this portends bad times for the team.
"Getting to Yes" is a term frequently used in negotiation strategy. It comes from a now-classic text by Prof. Roger Fisher, one of the gurus on the subject. I won't and can't summarize the book here, but there are a few important points he and his co-authors say about negotiation: it is a creative process, and the negotiator should seek to invent new options that might satisfy both parties' needs and should take the other side's needs in account when making new proposals. This did not happen here. In fact, this can be a case study in violating these norms and destroying a longstanding relationship.
Let's start with the fact that there is no one steward running the Yankees, but a dysfunctional family operation. George Steinbrenner is, to put it politely, not as active as he once was, but the reins of power have not been transferred in a coherent manner. So, we have several chefs -- his two sons Hank and Hal (who were thrust in positions of power relatively recently) , because the former son-in-law was yanked out after his wife filed for divorce), along with others in the brain trust such as team president Randy Levine, CEO Lon Trost and GM Brian Cashman.
I think the offer that was made -- one year $5 million, plus incentives for advancing in the post-season, was a product of a consensus. Some wanted Torre out altogether while others wanted to sign him to a more stable and long-term contract. No one side had absolute control, so a compromise was proposed -- one that was perceived either to be half a loaf, or a half-baked offer -- give him a temporary agreement with bonuses and see what happens next season. Did anything really think Torre would accept this?
Say this George Steinbrenner. He managed by decree, was dictatorial and sometimes irrational. Management by fear is not ideal, but everyone knew that decisions would be quick, direct and blunt. Steinbrenner the Elder would not have equivocated and would have decided not to new the contract within 48 hours of the team's elimination by the Cleveland Indians.
Now, let's examine the terms of the offer. The proposal treated Torre as a new applicant rather than a seasoned veteran. They did not guarantee the contract for more than one year. In sports, this is akin to an employee at will. That, While some in the Yankees' brain trust thought that a bonus system would work, it inferred that Torre needed the extra incentive to win in the playoffs. For a committed baseball person like Torre, that was too much.
Then there is the delay before the proposal -- an unconscionable length of time given the circumstances. To have Torre wait 10 days for an offer simply made him more resentful. From a negotiations point of view, it sent mixed signals at best and an implied message of we want you, but we REALLY do not want you at worst.
Finally, the offer was not negotiable. No counter proposals, no discussion, no debate. It was contract negotiation by dictat, which presupposed two things: (1) that the Yankees had a superior bargaining position, or (2) they just went through the motions. If it is the second, it certain guaranteed not "Getting to Yes" and served no useful purpose.