Chad Walters on Applying Lean Principles to Sports, Stadiums, and Fan Experience

Listen:

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My guest for episode #171 is Chad Walters, a friend and a Lean consultant. He is owner of Lean Blitz Consulting in Augusta, Georgia, a firm focused on continuous improvement for small businesses and sports organizations. I'm a big fan (and frequent commenter) on Chad's blog and he's contributed guest posts here on my blog. He has been cited and mentioned on ESPN.com and CNBC.com.

In this episode, Chad and I explore how Lean concepts like value and waste show up in the sports world. From long concession lines and inconsistent staffing to parking chaos at major events, Chad highlights opportunities for better processes that directly impact fans. We also look at positive examples — including the Masters Tournament at Augusta National, which keeps prices low, flow smooth, and customer satisfaction high, year after year.

We also discuss:

• Why sports organizations should think of themselves as small businesses with customer-facing processes
• The balance of staffing, training, and standardized work in stadium operations
• Lessons from minor league baseball and major league pace-of-play rules
• Creative, low-cost examples of error-proofing, like Augusta's clever mower “tennis ball” system
• How Lean can help sports teams focus on long-term fan loyalty rather than short-term revenue grabs

Whether you're a sports fan, a Lean practitioner, or both, Chad's insights offer a fresh perspective on how continuous improvement principles can create better experiences — in stadiums, at events, and beyond.

For a link to this episode, refer people to www.leanblog.org/171.

More about Chad Walters:

He has run projects for the Atlanta Braves, the Salvation Army, Automatic Data Processing (ADP), Eaton Corporation, The Dannon Company, and the South Bend Silver Hawks among other companies. He has been practicing Lean and continuous improvement for over eight years, is a Six Sigma Black Belt certified by the American Society for Quality, and received his MBA from Indiana University's Kelley School of Business, where he was a member of the Kelley MBA Sports & Entertainment Academy.

Posts of his we talk about:

• Enforcing Standardized Process & Major League Baseball Pace-of-Game
• The Masters: Concession Stands
• 2013 BCS National Championship and Silly Rules About Parking
• The Dayton Dragons  — Note from Chad:  “The Dayton Dragons have not won a Midwest League title, confirming what I stated in the podcast. However, they have 913 straight sellouts, which stretches back far past eight years as I originally stated. I'm estimating their sellout streak at about thirteen years and still going.”
• Joe Garagiola Jr. is the Senior VP of Standards and On-Field Operations for MLB.

For earlier episodes, visit the main Podcast page, which includes information on how to subscribe via RSS or via Apple Podcasts.

Transcript

Mark Graban: Hi, this is Mark Graban. A tradition unlike any other, the Lean Blog Podcast. Hello friends. This is Mark Graban doing his best Jim Nantz impression because today we are talking sports, particularly Lean in sports. My guest is Chad Walters. He's a friend and a Lean consultant. He's the owner of Lean Blitz Consulting in Georgia, and his firm is focused on continuous improvement for small businesses and sports organizations. So you may have read Chad's guest posts on leanblog.org. You can also go to his blog, which I read all the time at leanblitz.net. He is going to be talking in this episode about how Lean principles apply to sports operations, including the stadiums and the events that you might attend. We're going to be talking about in particular baseball and the Masters. The Major League Baseball season has just started. The Masters starts on Thursday and we're going to be talking about that. Hopefully it gives you a different perspective to think about Lean in your own business with your customers. What is the definition of value? What is waste? How do you improve? I think this is really interesting stuff that Chad does. I'm happy to be talking about it today. For links you can go to leanblog.org/171. Thanks for listening. Well, Chad, it's great to have you as a guest on the podcast today. Thanks for being here.

Chad Walters: Thank you very much for having me. This is a big honor.

Mark Graban: Well, sure. It's been fun having you as a guest blogger and reading your own work. How did you get your start in Lean and continuous improvement eventually leading into doing this in sports?

Chad Walters: Well, I got into Lean almost by accident or coincidence, depending on how you want to frame it. I was using Lean and continuous improvement principles and tools to improve processes in internships or at stops after undergrad without really even knowing what Lean and continuous improvement was. And I went to a speaker event with the Eaton Corporation CEO and he indicated that Lean and continuous improvement was going to be a new method for remaining competitive going into the future. And so that really sparked an interest with me that maybe this would be a good way to help build the company and help keep it competitive going forward and almost be a feather in my cap as a career builder. So I've been doing Lean and continuous improvement for about seven years now. A few different stops. I've been doing Lean for Eaton Corporation, the Dannon Company, the Atlanta Braves, Salvation Army, Automatic Data Processing, or ADP, the payroll processing company, and some other small companies and teams.

Mark Graban: That's really quite an eclectic list of organizations to work with. And I think lean thinkers would say, “Well, to some extent, everything is a process,” or, “we can manage. There's things to manage in any type of organization,” including hospitals. But what would you say is unique about the sports industry compared to other industries? I mean, everyone who's not an automaker has said, “We don't build cars, we're not like Toyota, we're different, we're more complicated.” What do you see in terms of doing this in the sports world?

Chad Walters: Well, sports is less than selling a product as much as selling an experience. The processes that you go through to create this experience, they're all customer-facing and the focus must be made on optimizing that experience. The competition that a sports team might face is less direct and more indirect. For example, sports teams might, no pun intended, they might be the only game in town, but they're not the only form of entertainment. So they go up against going to see a movie or going to eat out at a restaurant, or simply staying home and watching a game on TV. What is it that a sports organization can do to entice a customer to come out to the game and experience this great opportunity to be a part of the action as opposed to just simply watching it on the tube. So in some of the lower-level leagues, I'm thinking minor leagues as opposed to Major League Baseball or NFL or NBA, the game is really secondary. Families will bring their kids out to the game and not really be worried about what's going on out on the field as much as, “I want to feed my family relatively inexpensively, but I also want to have a good time with them instead of just simply being at home.” So in the upper levels, yes, it's all about the game and that's really where you're the best of the best on the field. However, in the minor leagues, because teams rosters change so often, you don't have that relationship that you've built with a major player on the team, a superstar, whereas you do in the major leagues, the roster turnover is really high. So the game is really secondary in comparison to just simply having fun and a nice time.

Mark Graban: Yeah, I mean, that's interesting describing it as an experience. I mean there's elements of a hospital stay that are an experience, not just, “Did you get the right care, did you get out of there without being harmed?” So I imagine the idea of value for a sports fan or a customer, it's not just whether the team won or lost. I guess you could see the team win and have a lousy experience. How do you describe value and waste to sports teams when you're talking about their customers?

Chad Walters: Well, I'll use an example of the Dayton Dragons as a team that has a poor product on the field but still brings in tons and tons of money in the box office. I think they have maybe eight straight years of sellouts. However, they, I don't think they've ever won a title in the Midwest League. I'd have to go back and fact check that. But as far as I know, they have not been particularly competitive.

Mark Graban: It sounds like the Cubs, they sell out anyway.

Chad Walters: Ouch. That hits a little bit too close to home. No, it's true. But when approaching teams and talking to them about waste and how that relates to the customer experience, I point out that some of the similarities between Lean and sports are that sports organizations are like small businesses. They have small staffs with lots of temporary labor. They have internal value-adding processes. They have a focus on bottom lines, profits and losses. They have similar business functions like marketing, accounting and finance. And they also have to manage their facilities. And anywhere that you have processes, you're going to have an element of waste. And that waste is going to affect the customer experience. Such as an example would be in concession stands. How long have we waited in concession stand lines for food? Or we've received food that we didn't order. I ordered a diet Coke with no ice. I actually got a Coke with ice. Everything was wrong. They had to go back and remake that. That's a defect. That's excess motion they have to go through to remake it. That's wasted resources. All of that ends up adding up. But it's not something that is really front of mind with sports organization staffs. They think more along the lines of, “I have temporary labor temporarily.” These things are really easy to understand and pick up. We don't have to have standardized processes because they're going to be quick enough anyway. Or if they know how to run a fryer or a grill, that's good enough for me. By not having things standardized, you're going to have a lot of inconsistent cycle times. You're going to see WIP build up in both inventory in the concession stand as well as the folks waiting outside in line for their food. You're going to have significant buildup. So those are things that take away not only from the customer experience, but also the bottom line.

Mark Graban: Yeah, I mean, as a fan of college teams, pro teams, minor league teams in different sports. Yeah. I mean, as a lean thinker, you can see the bad process. “Why is it taking so long for them to get drinks or hot dogs or whatever?” And you can see bad process behind the counter. But then, I've also seen a lot of cases where it just seems like they're just grossly understaffed. And I don't know if that's kind of a common cost focus where it seems like, if they could employ a few more people, they would sell more $10 beers and $40 hats. It seems like a fairly common problem.

Chad Walters: You know, I would also add to that that sometimes they're overstaffed.

Mark Graban: Sure.

Chad Walters: The front offices tend to be extremely understaffed, working upwards of 120-hour weeks when you have seven or eight home games in a row. But on the day of the game, you might have volunteers working concession stands. And it almost creates a lot more turmoil because everybody's running over each other, they're running into each other. They don't know what their roles are because they haven't been defined. They don't have a process that can be consistently applied and then standardized. There's really very limited training and management in that regard. So there are labor costs involved. But that's why sports organizations, especially at the lower levels, rely so heavily on interns. I'm speaking mostly about baseball because that's really where I've been most of my time has been with baseball organizations. The Atlanta Braves, in addition to being the assistant box office manager for the South Bend Silverhawks in South Bend, Indiana. I got a really good glimpse of every single function of a sports organization while working there. So just because I was in the box office doesn't mean I wasn't acting as a mascot or working at the concession stand or handling security. It was really all over the place.

Mark Graban: Yeah. So I guess you were flexible and cross-trained or at least you were thrown into a lot of different roles.

Chad Walters: Right. So a lot of the temporary labor, they're pretty much stuck wherever they're working. They are in the concession stand or they're handling tickets.

Mark Graban: Sure. And similar with the turnover and all those factors, it seems like it really screams out for not just having good standardized work and having a good process, good training. Yeah, I can really see how that would fit in with the operations related to the stadium and the team. Then you wrote about this. You blogged about this because your fighting Irish were playing in the BCS championship game. You were there in Miami. It seemed like sometimes you got the challenge of these sort of big one-off events. You wrote about some of the parking challenges, if you want to kind of describe that a little bit.

Chad Walters: Well, when it came time for the game, the communication from the Orange Bowl about parking was not particularly consistent and it wasn't being sent to the right people. And I'll use this as an example. The email came out from the Orange Bowl committee to folks who had tickets that said if you're going to park in the stadium, you have to have an orange parking pass. You cannot pay at the gate to come and park. There's no way to do that. However, I wanted to come attend the game without a ticket, simply tailgate. And if a ticket made itself available, I would look into getting that. However, I would not have gotten that communication if I didn't have a friend who already had tickets and said that they received this notification. So I very well could have shown up looking to park with $50 in hand, ready to pull in, and they said, “No, you have to go to another place and park a mile or two down the road.” I was fortunate in that I had that communication from my friend. But imagine the scores of people who didn't have that communication who were just looking to show up. That created a huge traffic snarl. I took pictures of that because I knew it was going to happen.

Mark Graban: You did predict that. I remember you predicting that to me in advance.

Chad Walters: Yes, I was very prepared to take images of that. Lots of U-turns being handled in bumper-to-bumper traffic on some of the Miami streets right around Sun Life Stadium.

Mark Graban: You've also written about some good examples. The Masters, Augusta National, that's coming up again here soon. I guess you went to the Gemba or you were there as a fan. Talk about some of the good things that you've seen operationally at the Masters.

Chad Walters: Well, Augusta National is an example of a sports organization that gets it. The Masters is everything to Augusta National. Everything about attending the Masters and chairman Billy Payne and the folks who put the tournament on, they recognize that everything is about making attendance at the Masters a talking point for years to come. It is really the customer experience and people come from miles around to attend this. It always sells out. The tickets are expensive, but they don't sell tickets at the door. They have scalpers outside. Not going to get into that. But it's such a big important event and so much goes into the customer experience that you don't really think about until you're actually there. For example, $30 can feed a family of four all day. That is not a joke.

Mark Graban: That's very surprising.

Chad Walters: The concessions are extremely inexpensive. The concession stands flow customers through very efficiently. Augusta National does not go above and beyond to milk the customers out of every single dollar that they have. They want you to want to come back. They want you to enjoy your time there. They know that it's going to sell out. So they don't have to squeeze every penny out of every barbecue sandwich or beer or soda that they don't have labeled. They actually don't allow brands at Augusta National, so you don't know what kind of beer or soda you're drinking. Although those with sharp palates would be able to tell. Just because they don't want to give one brand recognition over the other. Because Augusta National membership probably contains the CEOs of those companies somewhere along the line. They don't want to have internal competition, but the facilities and the management on the grounds. Augusta National is arguably the most beautiful course in existence. That's up to interpretation by other golf enthusiasts, but it's an absolutely beautiful spectacle on the grounds. During the Masters, there are customer feedback pavilions where they have touch screens behind some of the grandstands. And anybody can readily come up and give some feedback to the Augusta National planning committee so that they know what works and what doesn't work. With the Masters, it's just a phenomenal experience and that's why it sells out every year. It's so impressive.

Mark Graban: Yeah, I mean, it's a very special, unique event. When you talk about not squeezing every penny out of a fan, I mean, in a way that sounds like maybe the lean principle of having a long-term relationship with the guests. I don't know if they would call them patrons or what polite southern word they would use for their guests, but it seems like in a way, that's kind of a long-term view, as opposed to pretending like this is the last hockey game we're ever going to have. So we better make as much today as we possibly could.

Chad Walters: Right? One thing that I didn't get to touch on with Augusta National and how they manage the grounds, but I think is really cool, is how they use error detection with their fairway mowers. And I blogged about this last year. I blogged about all these things and how the customer experience is maximized at Augusta National. But the way that they mow the fairways is they have a line of mowers, one lined up off of the front mower off of its back wheel, and they go in a diagonal line through the fairway. They all mow straight, but they cover a lot of ground going in one line. However, one of the advantages of having mowers one right after the other is, is that you would be able to tell if a mower is either leaking oil or is not trimming very well or has missed a line, has come out of alignment. And the way that the drivers of the mowers are able to communicate that to the front mowers is by using a tennis ball that's hanging on a string from the roof of each mower. If one of the back mowers sees that one of the front mowers is leaking oil or trimming poorly, they will pull the tennis ball down and throw the tennis ball at that mower or that mower's driver, and they'll know immediately to stop and try to fix the problem or get the right people out there to pull the oil out of the ground so that it doesn't burn the grass, so that the grass remains green for the duration of the event.

Mark Graban: Well, it sounds like such a great example of kind of clever, inexpensive error proofing, which is classically Lean. Instead of having some big, expensive, overly complex contraption, it's a tennis ball. That's really clever.

Chad Walters: Yeah. And I don't know who came up with that idea, but it's simple, it's inexpensive and absolutely brilliant and effective. So every vehicle, not just the mowers, but golf carts or grounds crew carts, have that tennis ball. As they're driving by, they might see a problem and they'll throw it at a mower and again, the mowers will know to stop.

Mark Graban: Well, let's talk a little bit about Major League Baseball because you've blogged about things related to on-field play. We've both blogged about the movie, the book Moneyball. And maybe we can talk first about kind of the Major League Baseball pace of play or standardized work, if you will. People complain, “baseball is too slow paced of a game, pitchers take too long between pitches, batters get out of the batter's box too often.” Looking at those delays and if you will, non-value added time. Tell me about what you discovered and what you were looking at when you looked at this and blogged about it last year.

Chad Walters: With the Major League Baseball pace of play, there are rules in place for limiting the time between pitches and innings for the teams, whether they're warming up or pitchers waiting on the mound for the next pitch and trying to minimize that within some certain rules. Like there are some scenarios where it's not applicable, like if you have a runner on base, that would really affect the game itself. But as far as the other times, we need to minimize how much time is being absorbed by waiting around. However, the enforcement of those rules is not only not consistent from umpire to umpire or location to location, or pitcher to pitcher, but the entire process of enforcement or participation is not owned by anybody. And the example that I'll give is when I wrote about this, I had the former organ player, or I'm sorry, the former PA announcer for the San Francisco Giants in Candlestick Park. She told me that she would play music between innings and then stop it and then announce the next batter between innings. But the teams weren't really participating and following along with the script. And she brought this to the attention of Frank Robinson, whose title at the time escapes me. Something about rules and regulations. He said it was somebody else's problem or she needs to take it up with them, basically passing the buck. And it wasn't clear who owned that process. So something like that further elongates a game when you really only need a minute, 30 or two minutes in between innings, just enough for the three or four commercials to run and then come back in. Somebody gets in the batter's box and then pitches.

To follow up with that, I had a conversation with Joe Garagiola Jr. who is the executive vice president of On Field Rules and Regulations. His title escapes me now, too, but he would be the one who oversees this process. And he indicated that there are rules. There's a separate rule book or list of rules that are relevant to this particular process. As an outsider, I was not privy to this list, but there are rules and levels of fines and number of times you're violating this rule that suggests that it's something that needs to be followed up with and somebody is in charge of this. However, the consistency in which it's applied or enforced is unclear.

Mark Graban: So it seems like, yeah, there's unclear responsibility. Using the phrase “holding people accountable” sometimes is sort of a loaded term. But if it seems like in some cases there is clear accountability of a pitcher taking too long or accountability of the umpire not enforcing the rules. Was there any part of the discussion you had about whether these rules were supposed to lead to any, you know, penalties or disciplinary procedure or people get a “tisk tisk” if they're violating that standardized work, if you will?

Chad Walters: Well, the only way that we hear about violations, and this is the only way I knew about violations, was a pitcher posted his fine letter that he received in the mail from Major League Baseball on Twitter. And so I posted that, and that indicated to me another potential bottleneck in the process. “Why are we mailing fine letters to players instead of calling or emailing?” And Mr. Garagiola Jr. indicated they do get a phone call, they talk to their agent, but the letter is just the hard copy, makes it official. So everything was fine in that front. I thought that we were potentially relying on the pony express for some of these things, but you don't know about that because it's not published, it's not publicized. But Major League Baseball claims that they have this process under control, and it's entirely possible that they do. It's just a matter of now the top levels need to help with getting the on-field players, whether it's the players or the managers or the umpires to want to use this change. So I'm not sure what they're using besides penalties to influence everybody on the field. But if there would be a way to make it a positive change. “Hey, umpires, if you enforce this a little bit better, you might be able to go home sooner.” I'm really not sure.

Mark Graban: Yeah, I'm trying to think. We so often try to figure out what are people's intrinsic motivations for things. You know, a pitcher who works at a very deliberative pace and thinks that that's a key to his success somehow is not going to feel intrinsic motivation to take less time between pitches. And baseball players can be very superstitious about their approach, whether it's their routine between pitches, a batter's routine between pitches. And it seems like a lot of these problems come from. I think it's a general management problem maybe of not enforcing rules consistently because I believe batters are really not supposed to get out of the batter's box. Nomar Garciaparra, or before him, Mike Hargrove. His nickname was the “Human Rain Delay” because he would get out of the box and they have this 30-second routine of tugging and twisting and adjusting everything from their cap to their stirrups to everything in between. Imagine if there's different rules for stars versus no-name players. There's probably a lot of management challenges involved in enforcing rules like that.

Chad Walters: I would even go so far as to say that it's a culture that's been cultivated. For example, I was really inspired by some of this because I was watching ESPN Classic one day and the game where Pete Rose got his 4,192nd hit to break Ty Cobb's record, that game was airing and he got the hit in the first inning. So I didn't have to watch too much of the game, fortunately. But Eric Show, the pitcher for the San Diego Padres, off of which where Pete Rose got his hit, he was working very, very quickly to a point that it was really noticeable and how fast the game was going. As soon as he'd get the ball, he'd get back on the rubber. He'd and he'd throw, he'd get the ball back, get back on the rubber and throw. There was no waiting. There was no cycling through catcher signals. It was very deliberate, but it was very smooth. However, he did give up a hit. So maybe his method wasn't that great, but.

Mark Graban: Well, every pitcher gives up a hit. The failure rate, the acceptable failure rate, defect rate, in baseball is quite high. There's no Six Sigma hitters, you know.

Chad Walters: Hitters that get on or that hit the ball and get on base safely 30% of the time they're in the hall of Fame. But in comparison to pitching today, it was a striking contrast. So I would look at the culture of what's been permissible over the last 20 years with the speed at which pitchers work or hitters step in or out of the batter's box. That's something that you would almost need to strictly enforce and almost come down with a little bit more of an iron fist to some extent to make sure that that does stay in play. And again, that goes back to the customer experience. The customers don't want to watch a game extremely long on TV and they don't want to sit through all that waiting time in the stands. So that's why baseball is getting this reputation of being such a slow game.

Mark Graban: Well, Chad, I would certainly encourage well, first off, thanks for being a guest today. I've been a big fan of your blog and it's always been fun comparing notes with you about sports and hearing about the work you're doing. I encourage listeners go to leanblitz.net for Chad's blog and I'll have a bunch of links on the show notes for this episode to a particular blog post that Chad's written as a guest on my blog and on his excellent blog. So Chad, do you have any final thoughts that you would want to share for the listeners or final thoughts? If a sports team owner reached out to you, what are some of the first things that you would bring up to try to help them understand how Lean is applicable to their organization and team?

Chad Walters: Well, when I first got started doing this, I was more focused on the business processes. I didn't care about anything that was going on out on the field. And when I first started blogging, I was more focused on what are the customer-facing processes that are going to have the wastes involved in them that can be reduced. So when I think about the customer-facing processes, I think about concessions and wait times and unstandardized processes, drinks and food errors, inventory buildups that could spoil, excess transportation from one end of the stadium or the other. Another area of business processes that I would look at would be ticket sales. Kind of along the same lines with concessions in that, you know, a lot of manual application and employee interfacing facility operations, which is really key. You want to have your stadium clean and organized. You need to put a huge emphasis on safety. So concessions and food safety. Make sure that the stadium is in good repair and not in disarray so that you can easily tell if something is an anomaly or not, if something's broken or not, and being very timely with those repairs and upgrades. And something that some organizations don't really think too much about is energy conservation. “How much money is spent on electricity versus gas? Which one is more cost-effective depending on the application?” We don't really know. “Do we leave the grills on all game or do we shut them off at the sixth inning and use whatever inventory we have left?” We use a lot of incandescent bulbs. “Why don't we start moving to the LED lighting? That's a lot more… it's a little bit more expensive to buy a bulb, but they last longer, they have wider light and they save a lot of energy.” But then also from a behavioral standpoint, keeping items off when they're not in use. That includes refrigerators at the end of homestands, stadium heaters make sure that we're leaving them off when they're not needed, even in the summer months or the warm months that are kind of teetering on warm or cold, but then also turning off lights and concession stands and make sure we don't leave them on overnight. Those are the things that teams can do right now to cut costs and optimize the customer experience. And we haven't even talked about things going on out on the field.

Mark Graban: Yeah, well, maybe we can. We can talk more about that in a future podcast. Talk about Moneyball, talk about other things that come up. Hopefully we'll get to do that. So again, our guest has been Chad Walters. Leanblitz.net is the website.¹ Thanks for being a guest, Chad.

Chad Walters: All right, thank you, Mark. It was a great time.

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