Managers And Business Students, Go Watch “Moneyball:” Lessons from a movie

I am so indifferent to baseball that my attitude won’t register on any scale.  Yet, I wanted to see “Moneyball,” the movie.  And I thoroughly and utterly enjoyed it, despite the baseball jargon that hurt my head.  This entry isn’t about reviewing the movie, plenty have already done so; this is a review of ideas/lessons drawn from the movie for management students of all stripes.

The premise of the movie is something I addressed before, based on the quote from Einstein:  “We cannot solve problems by the same kind of thinking we used when we created them.”  Oakland’s baseball team had a measly budget, yet was expected to compete against all other giants whose budgets were exponentially bigger.  The conventional wisdom was, and still is, the bigger the better.  When Oakland’s stars got scooped away, the team was anemic in both financial backing as well as talent.  What can the general manager (GM), Billy Beane, do?

The scene in the trailer that caught my attention months ago was this:  After losing to New York, and with their talents being lured away with millions in salary, Oakland’s GM was at the table surrounded by white senior citizens who were the team’s talent scouts, talking about potential stars, but not really seriously since they couldn’t afford it.  Mr. Beane had enough, and said something to the point that they couldn’t solve the problem using the same kind of thinking over and over again.

Just what Einstein said.  But none of the scouts got it.

By serendipity, Beane met his future assistant, a young fellow with a Yale undergraduate degree in economics, and he gave the GM a totally different way of looking at baseball business operation, one that’s based on statistics, factual data.  Some of you who have read my other posts know that I don’t give much daylight to stats and data per se; what matters is how you use the data.  Hence the 2nd major theme for me:  The data used for scouting potential players was the individual’s own track record, not the aggregate.  I’ve always said that stats can be useful, but their usefulness is limited because they inform us only about the aggregate patterns.  So, what this movie highlights for me is that when data about the individuals themselves becomes available, the information becomes much more pertinent.  Related, a key question raised by Mr. Beane that resonates with me is when he asked the scouts what winning looks like, their answers were all about the aggregate and the stars’ powers.  What Beane said instead, Who gets on base?

But that’s not how baseball operations are usually done.   The theme of the movie is about thinking outside of the box.  One of my arguments in my PhD dissertation is:  If you want to have a competitive advantage, you don’t try to copy what others in the same industry do.  You do study and understand your competitors, but you need to be different, profoundly and fundamentally different, to create your own distinctive advantage.

The final lesson for me is that people who are game changers threaten others in the industry, even though they may be regarded as heroes by outsiders.  That’s why the “strategic termite” approach, discussed two entries ago, by flying under the radar, is much less threatening while still effective; however, it would be unthinkable in the volatile baseball industry.

These are great ideas and lessons.  One other major lesson from the movie that I wouldn’t ever recommend concerns the routine trading of players; that’s just degrading to me.  But that theme alone is worthy of study and a lengthy article.  I am not getting into that; we are on a long overdue R&R in Canada.  More mini lessons next time.  Till then,

Staying Sane and Charging Ahead.

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