Leadership lessons from the disgrace of the Chicago White Sox

It’s the classic give and take between two friends in Ernest Hemingway’s “The Sun Always Rises”:

“‘How did you go bankrupt?’ A friend asks. “Two ways,” answers the other. ‘Gradually and then suddenly’”.

It’s a memorable quote from a famous novel and is often used to describe how life-altering changes are often slow to develop and be noticed – but when they come, they do so very hard, quickly and completely. And this quote applies to individuals, businesses, and even professional sports teams. Especially for the Chicago White Sox, who have gone from legitimate World Series contender to cellar-dweller extraordinaire in just a few short years.

Heading into 2024, the Sox are now – officially – the worst team in baseball history. With their loss to the Detroit Tigers on September 27, they surpassed the previous record of 120 losses set by the 1962 New York Mets, an expansion team in its first season.

That’s no easy trick considering Major League Baseball was founded in 1876 and is the oldest major professional sports league. For a team that made the playoffs in both 2020 and 2021, this is particularly jarring.

And the depth of the White Sox’s awfulness goes beyond their win-loss record. They set a new team record with 16 consecutive home defeats. They have been defeated 24 times in a three-game series this season (to date). They tied the American League record for most consecutive team losses (21). By any measure and for every industry, the season represents an organizational performance at a historically poor level.

But there are some useful lessons for board leadership to learn from this experience of futility:

Supervision: As the team’s chairman recently stated, “We didn’t get here overnight.” In fact, the seeds of futility were sown many years before; Apparently they either go unnoticed or are not addressed. And this clearly illustrates the crucial importance of management oversight in every company: even in times of great success, management must remain vigilant for the warning signs of decline and decline.

Business model management: Management should constantly monitor whether the company’s business model allows it to compete in its industry. Even though the economics of Major League Baseball are ridiculous, the White Sox were hesitant to commit to 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 perspectives: While it always makes sense to retain competent leaders within the management team, it also makes sense to add personnel from outside the organization to provide new perspectives. The White Sox are notorious for their insularity; an unwillingness to hire managers from outside the organization. In fact, the team hired its new general manager from within, without resorting to an external search process.

investment: The White Sox have historically been reluctant to invest materially in their product – be it facilities, technology, talent, player development, coaches or even charter planes. They have already announced plans for a significant reduction in payroll in 2025. Such practices are a stark reminder that even the most successful companies will not remain so if they do not continually invest in their operations.

adaptability: Management must ensure that management is flexible enough to adapt to changes in the business, political and social environment. White Sox management has long been viewed as calcified in its strategies, unwilling to make changes and unable to evolve with the rest of the sport. This practice is evident in the reluctance to use analytics as a key performance tool in baseball.

Experience is no guarantee of success: The White Sox ownership group includes individuals who have been extremely successful in both business and professional sports. The primary owner has won six championships with the Chicago Bulls. The team is also rightly known for its social consciousness and commitment to the city of Chicago. None of this has proven sufficient to prevent the current debacle.

Collateral damage: A company’s failure rarely limits its damage to shareholders and senior management. Collateral damage often occurs – for employees, suppliers, communities and customers. The collapse of the White Sox impacts not only the players and fans, but also the vendors and service workers around the ballpark whose livelihoods depend on healthy fan support.

The Chicago White Sox are a quintessential American Pastime franchise. It is a billion dollar business that represents the third largest city in the country. In the truest sense of the word, it is a major business organization.

And when a company this significant becomes the “worst company ever” in its industry, business leaders across industries should take note. Consider the reasons for its decline and whether they are gradual or sudden – or both.

But one day the sun could rise again for the White Sox. Because the greatest appeal of baseball is hope.