The Real Lesson of Moneyball

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You know you’ve got a winner when you’re parodied on the
Simpsons. That’s that happened to Michael Lewis’ book, Moneyball in a Simpsons’ episode titled “MoneyBart.”

The book Moneyball came out in 2003. The movie, starring Brad Pitt
as Oakland A’s general manager (GM) Billy Beane hit movie theaters just a few
days ago. Here’s how the movie is described.

“The story of Oakland A’s general manager Billy Beane’s successful attempt to
put together a baseball club on a budget by employing computer-generated
analysis to draft his players.”

Essentially, the cash-strapped Oakland A’s got a lot better in the early 21st
Century by using statistical analysis instead of “proven baseball wisdom” to
pick the players that they wanted and could afford. The A’s were the first team
to use the statistical analysis tools that find undervalued stocks to find
undervalued baseball players. When they did, they got better.

The book is a bit more nuanced. You’ll learn about how the analysis movement
on the A’s was started by Sandy Alderson who was the GM before Beane and who
introduced Beane to the basics and the work of Bill James. And
you’ll learn that the need to do something different, the “mother of invention”
in this case, occurred when the estate of Walter Haas, sold the team to a
partnership that was going to cut salaries in an attempt to make the team profitable.

The basics make for a good story. Unlikely hero takes over awful team, comes
up with a new way to choose players and leads the team to victory. And that sort
of happened.

Beane became the General Manager shortly before the 1999 season. Under his
leadership the won-lost record of the A’s improved. But, over the last ten
years, the A’s have only won their division series once (2006) and they lost the
American League series that year. In other words, the team improved, but not
enough to beat the more affluent teams at championship time.Not only that, the other teams have learned to do the same statistical things.

That’s why the biggest lesson from Moneyball is probably contained in an
article by Adam Sternbergh in the September 23, 2011 NY Times. The title: “Billy Beane of ‘Moneyball’ Has Given Up on His Own Hollywood
.” Here’s it is.

New ways of doing business and business process innovations are important.
They can give you a temporary advantage, but soon your competitors copy what you
do and what was once a big advantage becomes table stakes.

Boss’s Bottom Line

People, with their knowledge and relationships, are the only source of
sustainable competitive advantage.

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