Forget Pitching, Hitting, and Fielding! The New York Mets’ Most Glaring Area Of Weakness May Be Statistics

It’s difficult to believe that Major League Baseball’s New York Mets won 11 of their first 12 games this season. Earlier today, the Chicago Cubs completed a four game sweep of the club, continuing a stretch in which the Mets have lost 29 of 45 games.

During this woeful period, fans have witnessed displays of poor pitching, hitting, and fielding skills. And to make matters worse, earlier this week, they witnessed a managerial display of poor statistical skills.

At a critical moment in a game against the Milwaukee Brewers, Mets Manager Mickey Callaway removed an effective pitcher and replaced him with an ineffective one. The change enabled the Brewers to score four runs and convert a two run New York lead into a two run Milwaukee surplus.

So why did Callaway bring in Jerry Blevins to replace Robert Gsellman? Given that Blevins has struggled all season, while Gsellman has delivered periods of clutch pitching? Callaway explained:

The seven times [the Brewers batter] faced Gsellman he got three hits. He’s never gotten a hit (0-for-2 with a walk) off Blevins. The overall numbers suggest Blevins has a much greater chance to get the hitter out and you have to go with those. It is part of managing the game today.

At first glance, it does seem reasonable to bring in a pitcher who has experienced success against a batter. But “0 for 2 with a walk” means that the pitcher had only faced the batter three times in his entire career!

That isn’t even close to a statistically meaningful number of past attempts. Callaway himself acknowledged the “small sample size” that he relied upon to make his decision.

In all fairness, there is no single numerical minimum of observations that must be considered when making a statistically valid decision. The minimum number varies by one’s willingness, in any particular situation, to tolerate risk and uncertainty.

And yet no mathematician would agree that a counter-intuitive baseball decision could be made on the basis of three prior outcomes. Thus, the Mets can now add Statistical Analysis to their List of Necessary Improvements.

Water Use Reporting At Coca-Cola

The Verge, one of the online platforms of Vox Media, published an investigative story last week about the sustainability accounting practices of Coca-Cola. It raised a number of questions about the manner in which the firm reports on its water use in the production of its signature product.

For instance, the article noted that:

Coca-Cola claims that for every drop the company uses, it gives one back. But “every drop” includes only what goes into the bottle. The company does not count water in its supply chain — including the water-guzzling sugar crop — in its “every drop” math.

During the first two weeks of June, we are utilizing our Save The Blue Frog web site and case to support an intensive accounting course at Providence College in Providence, Rhode Island, USA. It is the capstone course for the graduate accounting program, entitled Strategic Management in a Global Business Environment.

Thus, for our course, the investigative story provides a well-timed example of the need to utilize standard industry metrics for the reporting of environmental, economic, and social outcomes. The capstone course is emphasizing the standards, frameworks, and metrics of the Global Reporting Initiative, the International Integrated Reporting Council, the Sustainability Accounting Standards Board, and the United Nations in its curriculum.

Many thanks to Barbara Sullivan-Watts, a Special Lecturer at Providence College who is teaching Environmental Biology at the institution, for bringing the Coca-Cola article to our attention.

Rockaway Beach Provides A Sad Example Of The Integrated Nature Of The Triple Bottom Line

Are you familiar with the Triple Bottom Line? First defined by John Elkington more than two decades ago, it refers to the principle that an organization should measure its social performance and environmental performance, and not solely its financial (or economic) performance. It is occasionally known as the Three P’s of performance, i.e. People, Planet, Profit.

But the principle can also be interpreted in a more complex manner. Each of these three performance factors impacts the others. Thus, the “bottom lines” of these factors should be reported in an integrated manner.

Last week, the City of New York sadly announced a community restriction that illustrates the integrated nature of the Triple Bottom Line. Due to the hurricanes and rising tides of climate change, severe sand erosion on the city’s southeastern peninsula has led to the closing of a prime strip of sandy beach in the Rockaways.

The decision occurred after local tourist businesses opened for the season. Residents, of course, have already begun to protest their government leaders’ decision.

In this situation, an environmental crisis has led to a social and economic catastrophe for a working neighborhood that relies on its primary community resource — i.e. its summer beach — for its survival.

The residents of the Rockaways will gladly attest to the integrative nature of the Triple Bottom Line. Hopefully, the municipal leaders of your own town will learn from the current travails of their New York City colleagues.

Sustainability and Integrated Reporting

Are you worried about the future of the Sustainability Movement? Fear not! Our accountants are endeavoring to save the planet.

It may be reasonable to feel a little dubious about that statement. Nevertheless, author Jane Gleeson-White has written a best-selling book entitled Six Capitals: The Revolution Capitalism Has to Have — or Can Accountants Save the Planet?

She does not definitively answer that question in her text. However, she does explain that our accountants have many impressive allies who aren’t ordinarily associated with their profession.

For instance, HRH Charles, The Prince of Wales, is playing a key leadership role through The Prince’s Accounting for Sustainability Project. Gleeson-White credits the Prince for being a major impetus behind the global adoption of the Six Capitals model.

For the next two weeks, we will utilize our Save The Blue Frog web site and case to support an intensive accounting course at Providence College in Providence, Rhode Island, USA. It is the capstone course for the graduate accounting program, entitled Strategic Management in a Global Business Environment.

As the final course that students complete before graduation, the curriculum emphasizes the need to analyze global business problems in an integrated manner, and to recommend solutions in a persuasive context. May we agree that there is no better topic for achieving these goals than Sustainability?

You are welcome to use this link to review our materials. As always, we continue to welcome your comments, suggestions, and feedback.

Farewell, James Marion Sims … And Hello, Kim Jong-un

When is it appropriate for us to engage in a public commemoration? Most would consider doing so when the honoree is a person, an event, or an idea that makes a permanent impact on society.

For instance, the Lincoln Memorial in Washington DC memorializes a suitable person. Local towns’ fireworks displays on Independence Day are worthy events. And the Statue of Liberty, in New York Harbor, is an exemplar of an appropriate idea.

But there are times when the progression of history modifies our perceptions about people, places, and ideas. When that occurs, permanent commemorations may become socially awkward, and may even be removed from view.

Consider, for example, last month’s decision by the City of New York to remove a statue of Dr. James Marion Sims from Central Park. The physician had been memorialized as the father of modern gynecology.

But there was a dark side to his fame. Prior to the American Civil War, Dr. Sims perfected his surgical skills by experimenting on human slaves without using anesthesia. In response to public protests, government officials in New York City decided to move the statue to his gravesite, and to present it in historical context there.

When the statue was first erected in the 1890s, Dr. Sims’ honorees could not anticipate the day when public opinion turned against his legacy. In other situations, though, the obsolescence of a commemoration is relatively foreseeable.

For instance, consider the commemorative coin that the White House of the United States recently issued in advance of a scheduled meeting between the American President Donald Trump and the North Korean leader Kim Jong-un. It portrays the two men in a head-to-head pose, and even refers to the latter as Supreme Leader.

Some commemorations, like the Sims statue, survive for more than a century. But the memorial coin immediately became a relic as soon as President Trump cancelled the meeting.

From large statues to small coins, our memorials are designed to remain in place forever. Nevertheless, their continuing presence is subject to changes in public opinion and the tides of history.

If Corporations Are People, Why Can’t Monkeys Be People?

It’s the Memorial Day weekend! As always, the holiday launches the summer vacation season in the United States.

It also marks the start of a heavy traffic period throughout America’s national park system. Throngs of citizens will drive their vehicles into forests, beaches, and other natural venues to enjoy the natural environment. And park rangers will struggle to protect the natural creatures from the massive invasive impact of tourists who come to visit them.

Earlier this year, People for the Ethical Treatment of Animals (PETA) explored an innovative legal strategy to protect one such creature. It sued in an American court to protect the rights of a macaque (i.e. a monkey) named Naruto to own his own image.

Why was that approach so innovative? PETA claimed that Naruto possesses rights that are normally attributable to humans. It then proposed to appoint itself to serve as the “Next Friend,” or legal guardian, of the animal.

PETA lost the legal case. But might it consider filing an appeal? After all, non-human entities have been granted various human rights in the United States.

No less a figure than Presidential Candidate Mitt Romney, for instance, once created quite a stir by addressing the question of non-human rights. His declaration that “corporations are people, my friend,” was enthusiastically supported by his political allies and roundly denounced by his foes.

But if a legal business structure can be granted certain human rights, why not an intelligent animal? After all, humans and monkeys are both natural entities that are born of the Earth. We can hardly say as much about corporations!

This might be worth pondering as you enjoy the Great Outdoors during your Memorial Day travels. If you disrespect Mother Nature, its “Next Friend” may sue you!

Campbell Soup Failed To Attract Healthy Consumers. Was Its Strategy Doomed From The Start?

Denise Morrison, the Chief Executive Officer of the Campbell Soup Company, suddenly and unexpectedly resigned yesterday. Why did she do it?

Some analysts believe that she was compelled to resign because she failed to turn around a brand that is stale with age. Campbell’s was founded in 1869, and its canned products gained universal fame in a 1962 painting by pop artist Andy Warhol.

But our perception of Campbell’s hasn’t modernized in the half-century after Warhol created his signature work. Although Morrison and others made many attempts to update its product line and introduce healthier complementary products, consumers continue to associate the Campbell’s brand with sodium-packed cans of soup.

That’s why Morrison lost her position. But was she truly to blame?

On the one hand, the contemporary consumer is undoubtedly demanding healthier foods and beverages. A persuasive argument could certainly be made in favor of improving the health content of Campbell’s product line.

But on the other hand, let’s try to identify other firms that have successfully implemented this strategy. How many purveyors of unhealthy goods have transformed their product lines into healthy ones? Has McDonald’s, for instance, truly succeeded with its offerings of salads? What of its ill-fated McLean Deluxe sandwich?

Alternative examples abound of such purveyors “doubling down” on the unhealthy pleasures of their product lines. Burger King, for instance, unapologetically sells a Rodeo King sandwich that contains 82 grams of fat, 2,270 milligrams of sodium, and 1,250 total calories. Yes, you can order a large side of fries with that!

Likewise, it’s hard to imagine that many consumers would be attracted to a healthy version of a deep-fried Twinkie. Even if a small niche of customers were to demand such a product, they might not trust Hostess Brands to create it.

So let’s be fair to Denise Morrison. It’s easy to blame her for failing to execute Campbell’s transformation into a healthy foods brand. But it’s possible that this strategy, adopted by Campbell’s Board of Directors, was doomed to fail from the start.

Perhaps, in contrast, Campbell’s should have embraced the authentic and unalterable image that it has earned over many decades of canned soup production. And perhaps, like Burger King, it will only find future success by being true to its image.

How AT&T Turned Its “Big Mistake” Into An Example Of Ethical Behavior

When was the last time you heard a corporate officer unequivocally acknowledge a serious error?

Did it occur after United Airlines instructed police officers to assault a passenger who declined to surrender his oversold airplane seat? CEO Oscar Munoz eventually expressed regret, but only after his firm “seemed to go on the offensive when it circulated a letter in which (it) appeared to blame (the passenger), saying he “defied” the officers …

What about BP’s declaration of contrition regarding its massive Gulf oil spill? Indeed, its Chairman Carl-Henric Svanberg did express sympathy for residents of the region, but he was later compelled to apologize for his self-described “clumsy” choice of words when he referred to Gulf residents as “small people.”

So it is downright refreshing to hear a corporation clearly and unambiguously acknowledge a major blunder. When such an acknowledgment is honestly proffered, we may be able to encourage such behavior in the future by simply recognizing its ethical value.

Consider, for instance, AT&T CEO Randall Stephenson’s recent comment that its consulting contract with President Trump’s personal attorney Michael Cohen was a “big mistake.” Shortly after the election of 2016, AT&T agreed to pay Cohen’s firm $50,000 per month for advice regarding a “wide range of issues.” One such issue was its battle with the federal government to approve its merger with Time Warner, a battle that rages on today.

Special counsel Robert Mueller is now reportedly inquiring about the appropriateness of AT&T’s motivation for signing the contract. How has the corporate giant responded?

Stephenson could have simply stated that he would not comment about the matter. Or he could have noted that the contract concluded at the end of 2017, and thus is no longer a current concern of his firm. Instead, the CEO candidly confessed that “There is no other way to say it – AT&T hiring Michael Cohen as a political consultant was a big mistake.

Was Stephenson’s behavior impeccable? No, not perfectly so. Instead of issuing his statement to the public, he included it in an internal company memorandum that was shown to the Reuters news service.

Nevertheless, if blunt and unvarnished honesty is an indicator of ethical behavior, then AT&T should be recognized for this example of appropriate action. Honesty is not always practiced throughout the corporate realm; thus, whenever we manage to find it, we should be willing to commend it.

Why The Post Office Might Choose To Continue Delivering Amazon Packages While It Loses Money On The Contract

If you support the United States Postal Service, you must have experienced mixed feelings about last week’s fiscal announcement. On the one hand, package volume increased significantly over last year’s comparative levels. But on the other hand, financial losses worsened significantly.

Huh? How can an organization serve more customers and yet suffer more losses? There are usually two possible reasons why such a mixed outcome is possible. The first is that the entity may be losing money on each customer served, and thus more volume generates worse financial results. And the second is that the entity may be facing a problem that is unrelated to customer volume, and that is suddenly generating losses.

Evidently, President Trump has not taken a position on this question, having simply tweeted that “Only fools, or worse, are saying that our money losing Post Office makes money with Amazon. THEY LOSE A FORTUNE, and this will be changed.

But the President has not considered the possibility that the Post Office might choose to continue its relationship with Amazon while it continues to incur losses on the contract. Why? Imagine, for the sake of argument, that you decide to pay freelance drivers to deliver packages in competition with the Postal Service.

Let’s assume that your only significant operating payments are $100 per day to rent a small office, and $10 per delivery for each service rendered. You charge and collect $15 per delivery, and thus earn a gross profit of $5 per delivery before paying the rent. You would thus need to deliver 20 packages per day to pay the rent and break even.

That arithmetic is not difficult to follow, is it? But now let’s assume that Amazon offers to guarantee you $600 per day to deliver 50 packages. You might estimate that you’re charging your customer $12 per package. On a per-delivery basis, that’s a loss of $3 in comparison to your normal $15 price!

But now look at the situation in total. You’ll earn $600 from Amazon alone. You’ll pay $100 in rent and $500 (i.e. 50 packages @ $10) for deliveries, yielding total payments of $600. You’ll actually enjoy a guarantee of breaking even on the Amazon contract alone! And you’ll start to earn a profit on the very first package that you deliver for any other party.

So when you read that the Postal Service is losing money on its Amazon deliveries, it may indeed be true. And yet, perhaps paradoxically, the government agency might choose to continue serving Amazon while it loses money on the contract.

Why? Because, as we can see from our example, it might be reasonable to do so.

Why Jurisdictions From Maine To California Are Questioning The EPA’s Definition Of Transparency

California. Delaware. The District of Columbia. Iowa. Maine. Minnesota. Pennsylvania. New York.

Those jurisdictions cover a fairly broad geographic swath of the United States, don’t they? Last week, they joined forces to send the U.S. Environmental Protection Agency a simple two paragraph letter that questioned its fundamental understanding of science.

What did the letter say? In effect, not much. It simply asked the EPA to consult with other organizations and gather feedback about its controversial transparency rule. According to this new policy, the Agency will only rely on the results of scientific studies if the researchers make their research data available to the public.

Who can argue with the principle of open and freely available information? In principle, no one can. But in practice, many types of data are kept confidential because of valid privacy concerns.

Consider, for instance, a researcher who collects Protected Health Information (PHI) from individuals who live in the vicinity of a toxic oil spill. Under federal law, such information cannot be shared with third parties, and certainly cannot be made public, without consent.

In such cases, many individuals are willing to share health information with private researchers. But they understandably balk at sharing their information with the public.

And what of all the older studies that researchers still rely upon to develop new research activities? If the scientists who produced those studies have destroyed the original data in accordance with standard confidentiality practices, will the Agency begin to act as if the older studies never existed?

Whether you support or oppose the transparency rule, it’s reasonable to ask how the Agency plans to address these pragmatic issues. Indeed, would any one be harmed if the Agency slows down, takes a deep breath, and gathers more feedback before it implements the rule?