What CEOs Can Learn From the KC Royals

The Kansas City Royals major league baseball team is the quintessential underdog—a small, nimble organization that has proven to everyone that small and mid-sized companies CAN beat larger competitors. And there is a lot small and mid-market companies can learn from watching this team.

The KC Royals, which incorporated in 1969 after the Athletics moved to Oakland, have one of the smallest budgets in the MLB, but they proved last week that money doesn’t always equal quality. The Royals’ American League pennant win shows that small  and mid-sized companies can go head to head with larger competitors and win simply on their strengths.

“Go for small successes first, and build up to the home runs and strikes.”

Here are some of the creative ways the Royals found strategic ways to overcome their challenges:

Instead of hiring big-name superstars with huge salaries, they have built their own development program (the classic make vs. buy approach)

Taking the team vs. superstar approach—they rely on each person to work together as a team. Case in point: 3 years ago, the Royals made a trade involving Cy Young winner Zach Greinke for then relatively unknown players Alcides Escobar and Lorenzo Cain. While a superstar, Greinke was quiet and did not interact with other team members. Both Cain and Escobar blend in well with the Royals’ ‘team-first’ approach . (Additionally, both are strong gold glove candidates this year and Cain was the 2014 ALCS MVP).

Talent acquisition investment—to build the best team with a relatively small budget, the Royals invested heavily in their scouting organization, especially in the high-potential Latin American market. This brought in such players as their gold glove catcher Salvador Perez and one of their top relievers, Kelvin Herrera. Additionally, they brought back former Royal 42-year-old Raul Ibanez for team leadership. Ibanez was instrumental in instilling confidence in this young Royal team at the low point in the season that they were as good as anyone in baseball. This is a key lesson: always support your team, even if they are not yet producing the desired results.

Big success was built on a lot of small successes—the KC royals have one of the lowest records of home runs, but have a lot of singles, steals, bunts, etc. You can easily do the same—go for small successes first, and build up to the home runs and strikes.

If your competitors are larger than you, have more money to spend than you do and have been at it longer than your company has, all is not lost. Simply follow the lead of the scrappy Kansas City Royals and you could be playing in the big leagues too.

 


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