Hi, this is Dan Morrell, host of Skydeck.

Back in 2014, When Chris Marinak (MBA 2008) was in the process of rolling out the instant replay system as a Senior Vice President at Major League Baseball, he would meet with team managers to discuss implementation. And the reception could be chilly. Marinak recalls longtime skipper Tony La Russa, for instance, being adamant that replay would require something like 10 lengthy play reviews per game, given all the blown calls he saw on the field.

Actually, Marinak told him, we ran the numbers, and—in most games—umpires don't miss any calls on the field. And today, that expanded instant replay system is only employed once every other game. "We designed the system based on the data and not based on the perception," Marinak says.

Marinak is now the Chief Operating and Strategy Officer at MLB, where he's worked since he graduated from HBS in 2008. And he's helped lead some of the transformational innovations the sport has undergone in the last decade, both on the field and off. In this episode of Skydeck, taped in front of a live audience at this year's Spring reunions, Marinak talks about what it's like to lead innovation in a business steeped in tradition, how the league engineers for the outcomes that fans want, and what it will take to for robot umpires to be a win.

In this part of the conversation, Marinak and I dive into the strategy behind some of the young season's new regulations, including a pitch clock, larger bases, and restriction on defensive shifts.

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Dan Morrell: Let's go back to the genesis of some of the changes that were ruled out this season, right?- And I think you've probably talked about this ad nauseam, but just for everybody's context, what was the impetus for these changes? What was the mission? What were we trying to do?

Chris Marinak: Over the last 20 to 30 years, but more so in the last 10 years the game on the field of baseball has changed a lot. We haven't really changed a lot of rules or elements of the sport, but the actual outcomes have changed a lot. A couple things have happened. There's been a lot more technology that's been introduced to the sport from a performance standpoint.

And those of you that watch the game, things like StatCast, which now shows the swing path of the bat, the launch angle of the ball off the bat, the exit velocity when you hit the ball. That didn't exist 10 years ago. And what you're seeing is that hitters are now optimizing their swing to hit home runs and pitchers are optimizing their delivery to throw as hard as they can. So velocity is way up.

And so what happened in this sport really over the last 10 years is that we've migrated to this world where there's a lot more presence of the, what we call the three true outcomes, which is home runs, strikeouts, and walks. And what fans tell you when you survey fans like, they like strikeouts or walks, but they don't like it exclusively.

There's a lot of other great things that happen in baseball. Stolen bases, triples, doubles, great defensive plays, shortstop diving in the hole. And so when you have more of these three true outcomes, you get less of the things that fans really want to see.

That was an insight that we came upon a couple years ago was that we really need to try to get some of this other action back into the game. And then the other piece of it is that game times have dramatically increased over the last really, like I said last couple decades, but even more so in the last 10 years.

We went from like a 2:45 almost in terms of game time up to 3:10, last year.

So you're, we were up, basically 25 minutes over the last 10 years which is a big amount of time, and I know a lot of you that we're talking about going to games, particularly younger kids, game starts at seven o'clock, you can't stay till 10:45 to watch the end of the game, and expect to go to school the next day. And so we really felt like we had to condense the action, make it crisper, and then try to incentivize some of the things that we know fans want to see, stolen bases and more balls in play.

So that was the genesis of the whole idea. We didn't know that there was one answer or two answers, but we tried a lot of things in the Minor Leagues to see how we could get the outcomes that we were trying to engineer for, built around those outcomes. And that's exactly what we've seen happen this year is that we wanted shorter games, we wanted more balls in play, we wanted more action, we wanted more stolen bases.

And those are all the things that we've seen from the sport this year.

DM: What are your KPIs? What are you seeing, how are you measuring success for these?

CM: So we have a number of things we look at. There's a metric called time between balls and play. It's basically the time of game divided by the number of balls that are in play. And that number's gone up even more dramatically than that 25 minute number that I told you about because it not only takes the longer games, but it also takes less balls in play. So it amplifies both elements and I think that numbers went up from something like two minutes, two and a half minutes between balls in play to four, so it almost doubled. That number has gone down dramatically this year. And that's just a proxy for how frequently am I seeing something that's exciting and interesting. By ratcheting that number down, it creates a more engaging experience when you go to the ballpark. It makes a difference when you're watching on television. And you're just more inclined to be able to pay attention to the game. There was a great sort of analysis that I saw this year where one of the baseball writers took a video of a game 10 years ago and a game this year, and they looked at what the fans were all doing behind home plate. And there was like 25 fans and 10 years ago, like three of 'em were watching the game. They were doing other stuff, they were talking, they were looking at their phone, they were eating, whatever. And this year it was like 23 of the 25 were watching because the pace was so much more active and so they were engaged and they were dialed in on the sport. And so that's the kind of illustration of the type of thing we're looking to do.

DM: So many of the changes that we've been talking about are really public and really obvious, right? But what are the behind the scenes changes that baseball is doing?

CM: We do a lot of testing behind the scenes, both on consumer facing technology things like delivering games online. If you look at the streaming, streaming is very popular right now and everyone's talking about Netflix and Disney and all these players in streaming. If you actually look at live streaming, baseball was at least five years ahead of anyone else in terms of bringing live content over the internet. We've had our live streaming product available for over 20 years on mlb.com. And so we actually have a real rich culture of innovation on the business side as well, not just on, on the on-field side. And so we really strive to, to innovate.

DM: I just want to pick out one element of that in MLB's history of streaming. The technology that MLB Advanced Media developed is now the backbone of Disney Plus—that was a multi-billion dollar deal. I think understanding how that got developed is a real interesting case study. Can you talk a little bit about the development of that product?

Major League Baseball Advanced Media: America's Pastime Goes Digital
Read Professor Anita Elberse's 2010 case study on innovation at MLB's digital arm

Major League Baseball Advanced Media: America's Pastime Goes Digital
Read Professor Anita Elberse's 2010 case study on innovation at MLB's digital arm

CM: Anita Elberse, she actually built a case around this whole thing. So as I said, we were early to the game and live streaming. We got live baseball games streamed online, and then we sort of realized hey, this is hard to do and other people want to do this, too. And so we started offering that capability to ESPN and a bunch of other services—ultimately I think HBO used our service, Disney and a bunch of others. And so we basically built a business, not too dissimilar from what Amazon did with Amazon Web Services, where they built this massive infrastructure to sell products to consumers. And then they realized that a lot of other companies would want to take advantage of that scale as well. We did the same thing with our streaming product. And so we built a third-party business, we started to offer that service to other clients. And then we realized that it was actually really valuable and we had a lot of interest in people that wanted to buy it. Timing was right for Disney. They were actually behind Netflix and others in terms of content delivery. And they called us up and they're like, "Look, we need to really move up the ladder in terms of accelerating our capabilities on the technology side." And so they actually bought that whole business from us, that third party business a couple years ago for multiple billions of dollars which was a great return in terms of that investment for us. We've retained the baseball elements of it and the core things that we needed to make baseball strong. They got the third party business and some of those core capabilities that went into Disney Plus, which now has, as we all know, 170, 180 million subscribers globally and is one of the top streaming products in the world.

DM: What was the genesis of [MLB] Advanced Media? I know that preceded you, but you told me this story about how they just threw everybody, [laughs], in a room and said, "Hey, you guys got to innovate something over there."

CM: Yeah it's an interesting story for innovation across all businesses, which is, baseball's historically, as we've talked about, a very, been a very traditional business. In 2000 we basically looked around and realized we have a bunch of lawyers running the league office that aren't technology experts. We didn't even have a website. Mlb.com was actually owned by a law firm, Morgan Lewis & Bockius. And so we had to actually go like, bribe them. They were actually our lawyer and we had to go bribe them to give us the domain back, because we had such a limited digital presence. And this was in the midst of the dot-com craze and I think a lot of our owners and our management at the league was like, "We're really behind here. How can we move up the innovation curve?"

And again, in a sort of a traditional case study, we brought in McKinsey, they did an analysis and McKinsey was like, "Look, you guys are so far behind. This is one of these where it's not even just, make an investment, it's like, start from scratch. You guys have an office on Park Avenue in New York—put an office somewhere else. Hire people that are from outside the industry that can start from scratch that wear jeans and t-shirts and go work downtown in these more innovative spaces."

And that's exactly what we did. Put them in there and just let 'em do their thing. Don't even, don't call 'em, don't bother 'em. Like, Just let 'em incubate down here. You guys continue to run your league. Make sure that Tony La Russa gets disciplined when he kicks dirt on an umpire and let these guys down here do technology. And that's exactly what happened. They realized that not only did we need to have a website, but there was streaming capabilities [that] were coming online. We had such a tremendous amount of content. We played 2,400 games a year. Like why are we not making this content available to our consumer online? And so they really worked to innovate and they built that streaming platform that ended up becoming Disney Plus because we let them innovate and we didn't get in their way.

DM: You've been in MLB now for 15 years, ever since you graduated and spent the majority of it focused on leading innovation or helping to lead innovation. What are your big takeaways for other leaders in the room about what it takes to successfully lead innovation?

CM: I think what we've really stumbled into is there's two approaches to innovation, and you got to be very specific around how you tackle it based on the circumstances. So one is just be very agile. Put things out there quickly, know that you're not going to get it right, and just implement quick, and adapt over time. Those are good for smaller changes or things that don't have as much of a visible impact.

On the flip side, for things that really have a substantial impact, like we talked about with the pitch clock where we basically in one year took game times down back to 1984 levels. So we went back 30 years in one year. So something like that, you can't do in an agile fashion. You can't just throw that out there and hope it works and then, see what happens. You have to really study it. That's the other pathway. And so we've spent a lot of time on innovation like that, where it's like you have a big goal in mind. You have something really substantial you want to achieve, and you work backwards from that and you take the time to achieve it.

We have a little bit of a luxury in that space that other businesses may not have. We've been around for 150 years, we feel pretty good about our core business model, where we can take 10 years to do something and do it right. And I think in other businesses you got to understand where you are in that curve. Do you have the flexibility to make that investment and that long-term commitment? If you can, you can see substantial impact and we've demonstrated that. But if you can't, you have to bite smaller change off in a more incremental fashion. And so that's one sort of insight I've had.

The other one is, it's probably obvious, but it's, listen to your consumer. We didn't just come out of thin air with, we want, more balls in play, more action. Like we've actively solicited survey data, focus groups, like ask our fans like, what do you like about the game? What do you want to see more of? We engineered all these things starting with the fan. That was the starting point. It wasn't like, let's go put a clock in baseball. It's never had a clock for 150 years. It's, this is what our consumer wants us to do. What are some options to accomplish that and work backwards from that. And that's why we feel like the result of this change in particular this year has been really successful because we're giving the consumers what they're asking for and we're seeing the results. Attendance is up, engagement's up, viewership is up all in one year just because of these changes that we've made. And it's been a big success.

DM: Let's talk about one more initiative that's been mentioned a few times in this conversation already. And that's robot umpires. What is that in reaction to, and where is it in terms of testing?

CM: That one is interesting because I think the genesis of that is more around accuracy and keeping current with fan expectations. And so I think the genesis of that is, as I mentioned, we play 2,400 games, we throw 350,000 pitches a year. There's always going to be a video of that ball that's right down the middle of the plate that the umpire calls a ball. And like that agitates people for some reason ... even though it happens like once every 350,000 times.

DM: And it's always against the Mets.

CM: Exactly. So, you know, I think that's the starting point. And what we've been paying attention to, the technology's there. It's so funny to see, when I first got involved in automated strike calling, you were looking at plus or minus two inches, which I mean, the ball itself is only five inches-

DM: ... Right. Right.

CM: ... you know, in diameter. You're talking about a pretty big error rate there when you're talking about plus or minus two inches. The technology now with 4K cameras, high-speed—10th of an inch, you can't even measure it any more precise than the accuracy is. So the system is accurate. It's not really a question of can the technology call balls and strikes accurately? The question that I think we're really trying to focus on now is like, what outcome are we trying to achieve? We don't need to dramatically shake up the game to get one out of 350,000 more pitches correct.

If it makes the game stronger, it makes fans more engaged, if there's ways it can be more exciting that keeps people engaged, that's a win. If it helps drive more of the things that I talked about, stolen bases, balls in play, it encourages hitters to swing earlier in the count and keep games moving, that's great. So if we can design an automated system that moves us in that direction, that would really be a big win for us. And I think that's where we are in the process, is it's honing the technology, it's giving players a chance to experience it so that, when they see it in the Major Leagues, they're supportive and it, and they're willing to adopt it, like we talked about earlier. And then it's making sure that when you put it in, it gives you the intended benefits that you're hoping to achieve.

DM: One more question then I'm going to open it up to questions from the audience. We've talked here today about metrics and data and the importance of technology, but I do want to paraphrase Billy Beane because I think it's important here or relevant. Are you still romantic about baseball?

CM: [laughs]. Yeah, so it's interesting. So I've seen some old classmates before and they're like "What's your favorite team?" And it's a little hard to have a favorite team, still. Because I know so much about what happens on the field and I was saying I'll watch games and actually pay attention to who the umpires are, [laughs] rather than the players just because of all the things I just talked about. for me, baseball is just unique in its ability to connect people and bring people together. And so when you go to a game with your kids and they have that experience of going to for me, New York Yankees or Mets game, and it's an experience they'll remember for the rest of their lives.

That's what is empowering for me about the sport. It's not, do I have a favorite team and did my team win the World Series? That's great, but it's that it's a place where you, where people can come together and you have a special experience.

Bari Greenfield (MBA 2013): Hi Chris. I'm Bari Greenfield, class of 2013, another Businesses of Sports president emeritus. You talked a lot about the innovation on field and the on-field product. I'll say personally I'm a romantic and I love the long games, but I'm glad it's been working out so well, in terms of engagement and all the KPIs that you've been talking about. The flip side of that coin is the value off field for sponsors who now have less exposure value broadcast and things like that. So can you talk a little bit about how you're innovating, creating value on that off-field side, either to compensate or just to generate value in new avenues, in new ways beyond the product on-field itself?

CM: On the business side, we're continually innovating. There's a little bit of that that went into this year where we have now more virtual signage on the field. You'll notice, actually, like there's virtual ads on the pitcher's mound that actually aren't there. And we've added something this year, too, a jersey patch, so sponsor opportunity on the jersey patch, which is a super high value proposition, probably more so than even the, a lot of the other sports just because of how hitters are on the screen all the time.

On the other side, one example I hear a lot about with these rule changes, the games are 30 minutes shorter—are you selling less concessions? And we're actually not, we're actually flat to up on concessions in a 30-minute shorter game.

And so that's actually a good illustration of how the outcomes may actually be a little bit counterintuitive. So you shorten the game by 30 minutes, you think, oh, I'm going to sell less hotdogs, less beers, less sodas. But people actually are getting to the game earlier and adapting their behavior. So they're buying more and consuming more earlier in the game because they know the games are shorter and they know they can actually get home at a decent time.

And so it's not always just a linear thought process or equation of: games are shorter, we're going to lose money. It's the games are shorter, we're going to create more engagement—and it's actually going to grow the business. And I think it's an interesting concept to think about really in any model where you're innovating; don't necessarily just look at it as a linear equation. Like how can this actually change the game for the consumer?

Skydeck is produced by the External Relations department at Harvard Business School and edited by Craig McDonald. It is available at iTunes and wherever you get your favorite podcasts. For more information or to find archived episodes, visit alumni.hbs.edu/skydeck.

Featured Alumni

Chris Marinak

MBA 2008

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