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September 26, 2011

Moneyball

The Oakland A’s in the 1990s reinvented how to scout baseball players.  In the world they previously occupied the only way to win had been to spend lots of money on brand name players and amass more power than other teams.  It was a dollars and cents approach that small market teams could not compete in.

Then Billy Beane came along and put together a new way of building a baseball team.  He threw out the metrics that everyone else was using (batting average, RBIs, Runs) and rebuilt the statistics that define “good” baseball players.  Instead of batting average he looked for on-base percentage.  Instead of RBIs and Runs he looked at slugging percentage.  Within this world view he was able to target players that no one else wanted and build a complete baseball team without spending at the same level as the Yankees and Red Sox.

The whole premise was built around changing the rules of a well established industry and competing in a way that no one else was.  It allowed a group with limited resources and significant constraints to not just compete, but win.

Look around at what you do today and figure out if it really is the best way to operate.  Are you looking at your metrics for the right reasons or simply because those are the ones you always looked at?

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