"How did one of the poorest teams in baseball, the Oakland Athletics, win so many games?"
“How did the second poorest team in baseball, opposing ever greater mountains of cash, stand even the faintest chance of success, much less the ability to win more regular season games than all but one of the other twenty-nine teams? For that matter, what was it about baseball success that resisted so many rich men's attempt to buy it?”
It’s how well you spend your money that delivers results
Author Lewis discovered that the “answer begins with an obvious point: in professional baseball it still matters less how much money you have than how well you spend it.”
Interestingly, some have thought seriously about this matter. It turns out that a “leading independent authority on baseball finance, a Manhattan lawyer named Doug Pappas… [has developed]...The Pappas measure of financial efficiency...: how many dollars over the [estimated] minimum $7 million does each team pay for each win over its forty-ninth? How many marginal dollars does a team spend for each marginal win?”
In the accompanying table are the American League West standings at the end of the regular season in 2002. Note that the total payroll for each team is precisely in reverse correlation to their standings in division. This could be a fluke—but it’s not.
In 1997, at the beginning of a brand new approach to base managing a baseball team, Sandy Alderson, then the GM for Oakland A’s, had a team that won 65 games and lost 97, and was at the bottom of their division. But, as Alderson, and then his successor, Billy Beane, continued to hammer away at their revolutionary approach to baseball team management, the A’s went from winning 65 games in 1997 to winning 74 games in 1998; in 1999 it was 87 wins, and in 2000 it was 91; by 2001, they won 102 games. This was no fluke
A willingness to rethink
At the bottom of the Oakland experiment was a willingness to rethink baseball: how it is managed, how it is played, who is best suited to play it, and why. Understanding that he would never have a Yankee-sized checkbook, the Oakland A's general manager, Billy Beane, had set about looking for inefficiencies in the game. Looking for, in essence, new baseball knowledge. In what amounted to a systematic scientific investigation of their sport, the Oakland front office had reexamined everything from the market price of foot speed to the inherent difference between the average major league player and the superior Triple-A one. That's how they found their bargains. Many of the players drafted or acquired by the Oakland A's had been the victims of an unthinking prejudice rooted in baseball's traditions.
Like every David and Goliath contest, the clear underdogs have an advantage only if they fight a different battle than their opponents.
In the case of Alderson and Beane, their rethinking caused them to see that while other teams were out using their conventional wisdom and buying “players,” they could seize the advantage by buying “runs,” simply by coming to better understand what actually produced a “run.”
If you read the book Moneyball, you will see that it is really all about systems thinking (even though the word is never used in the book). While other teams were stocking up on their “inventory” of heavy-hitters and “tools” in order to try to create or protect some perceived (albeit incorrectly) advantage, the Oakland A’s were focused on FLOW—getting as many men as possible on base.
It was the consistent flow of men on base that won the day and produced the desired results—wins—at the lowest cost for the Oakland A’s.
Because they took time to rethink what they were doing. They rethought the whole world of baseball. They began teaching the whole industry that forgetting what they thought they knew and thinking in brand new ways could make them a winner and more efficient, too.
So, how is your rethinking coming along?
Are you still trying to gain a competitive advantage in your industry using the same thinking at all your competitors are using?
I believe we can help you with that. Please leave your comments below, or feel free to contact us directly.
All quotes, unless otherwise noted, are from Lewis, Michael. Moneyball: The Art of Winning an Unfair Game. New York: W.W. Norton, 2003.