We Need Wins Above Replacement (WAR) in Small Business

I’m a little fanatical about baseball statistics. When attending senior management client meetings, relevant baseball stats sometimes cross my mind.

Take wins above replacement (WAR), for example. Suppose my number is 8.4 as a shortstop for the St. Louis Cardinals. In that case, I’m responsible for about 8-plus wins over a replacement player who could be acquired at a minimal cost with minimal effort at my position.

Wouldn’t it be great if every person on LinkedIn had a replacement value that could be quantified next to all his/her titles throughout the years? I know it’s preposterous, but it’s fun to think about.

Other Names for Wins Above Replacement in Small Business

Let’s pick a few business positions and develop a similar metric.

Sales Rep | Sales Above Replacement – This number must be industry-specific. Let’s say a rep works in the retail car industry.  A Sales Above Replacement (SAR) of 8.2 would mean that the rep sells, on average, 8-plus more cars per month than a replacement that could be acquired at minimal cost or effort.

Marketing VP | Market Share Above Replacement – Great marketing teams attract new buyers to the organization. One of the marketing goals should be to increase market share or sales overall. Accordingly, a Market Share Above Replacement (MSAR) of 9% means this VP can obtain an extra 9 percentage points of market share over his/her replacement acquired at a minimal cost and effort.

Get the idea? Let’s do one more.

Merchandising Manager | Really Good Deals Above Replacement – I’m pushing the envelope a bit, but let’s say a particular eCommerce company has a way of measuring a great buy, yielding a better-than-average margin that will turn quickly. That’s a great deal. A Really Good Deal(s) Above Replacement (RGDAR) of 33 means this person will generate 33 great deals annually over a replacement who could be acquired at minimal cost and effort.

Go through each position in your company, and I bet you can develop your key measures, like the WAR metric in baseball. All you need to determine is the following:

1. Name the position.
2. List what the greatest requirement, objective, or desired result is.
3. Note what the minimal output is for someone that is average.
4. Then, track the number and be transparent with the number.

Imagine if Every Senior Team Member Had a WAR-Like Measure

The COO. The CMO. The CFO. Even the CEO himself. Better yet, what if the entire team had a WAR-like measure?

Here are some ideas, and some of these have already been mentioned:

• Sales above replacement (of a leadership/management team that could be obtained at minimal cost and effort)
• Customer satisfaction above replacement
• Market share above replacement
• Profit above replacement
• Return on assets and equity above replacement
• Return on overall business value above replacement

Three Questions Every Employee Should Ask Regularly

The more I think about this topic, the less crazy it seems. And if I’m an employee of the company, either as a staffer or a senior management team member, here are 3 questions I want you to address regularly if you work for a CEO:

1. Am I making a difference? How have I contributed to increasing sales, profits, market share, customer satisfaction, and return on assets this past year?
2. Would I truly be missed if I left the organization? Would my replacement be more or less productive? By how much?
3. When I’m at the office, do I spend more time thinking about myself or the organization?

Shut the door, pull out a pad of paper, flip on Bach’s Air on G String, and start writing. Be honest, too.

Want to increase your A-game dramatically? Share your results with your peers and decide right now how you will improve.

WAR is for Owners, Too

I’m convinced this is a great idea. The key is ensuring you have quantifiable requirements for each role and each team in the organization.

1. Name three numbers each team member reporting to you should hit at a minimum.
2. Repeat the process for the team that works for/with you.
3. What incremental increase would you require in a replacement or for a brand-new position for each person and the team?

I have a few more, but I’m saving those bullets for clients of G3CFO. But the three above are enough for now.

Why step through this process for individuals and the team? The key word is synergy.

I love great baseball, and I enjoy watching the St. Louis Cardinals. If you ever catch a season opener, you will be impressed with the mighty Clydesdales galloping around the field’s perimeter.

The average Clydesdale can pull 7,000 to 8,000 pounds. You would think two would pull twice that amount. Try again. Two can pull about three times the amount of just one Clydesdale. And that’s called synergy.

Your VP of Sales should have a sales above replacement of $10 million, maybe more. But your team should have sales above replacement of perhaps 2x or 3x.

Theoretical? Maybe, but so is Wins Above Replacement, as not all baseball purists trust the number.

But you have to admit the concept is intriguing. If nothing else, don’t take incremental improvements lightly or accept the status quo each year. You need to expect more from each individual along with the team. But don’t worry. Your best team members will be agreeing with you.