Moneyball presents itself as a book about baseball and it is. It’s a book about a baseball team, more specifically the Oakland Athletics. But more importantly, it’s a book about how to make decisions and how to find an advantage in a world that is consistently unfair and unreasonable. The unreasonable nature of this world, though, can be exploited by those who are reasonable and can use the power of information so that those individuals or groups can outperform those with more resources. This is, in essence, the story of the Oakland Athletics.
Essentially, the Oakland Athletics used data mining, research and in-depth analysis to purchase players that other teams wouldn’t. The other teams wouldn’t because they didn’t understand how good these players actually were. What Oakland had discovered was a deficiency in baseball where statistics that didn’t make sense were used to measure player’s ability and scouting was largely based on subjective judgments rather than an analysis of what actually wins games. The Oakland approach was to focus on players that got on base more often and to not squander outs with things like stealing bases or “sacrifice” hitting while other teams focused on flawed stats like RBIs and paid little attention to wasted outs. They used this statistical approach to try to combat one glaring problem – they had no money.
Baseball is inherently a screwed up sports league because of the inherent inequity of it’s financial system. Many leagues try to combat this inefficiency by creating a cap on team salaries or luxury taxes to allow the teams that make less money to compete financially. Baseball doesn’t even attempt to combat the problem; in 2010, the highest payroll team in baseball, the New York Yankees is 6 times higher in payroll than the lowest salaried team, the Pittsburgh Pirates (keep in mind this is for the same number of players).
Oakland’s salary was approximately 1/5 of the Yankees during the period in which Moneyball was written, but they managed to win nearly the same amount of games because of their ability to exploit the information available.
So, here’s my question to you….we all work in different financial situations…if you find yourself in a financial situation that is more challenging than your competitors (or colleagues), what can you do to emphasize the things you can do well or to make yourself better regardless of your constraints? Information is available in droves to those willing to work hard enough to obtain it. There’s no reason we can’t use information to kick ass at our jobs wherever we work. We’re only limited by our work ethic and our ingenuity in using that information.
If you need a swift kick in the ass, read Moneyball. I guarantee it will make you think about the way you do business.
