Moneyball

If you haven’t seen the film Moneyball, it’s about how the Oakland A’s went from losing nearly every game to having an amazing winning streak of 20 games with a team made up of players no one else wanted.

Think Bad News Bears, throw in Brad Pitt and some complicated economic doctoral theory and you’re there.  Something for everyone.

The basic idea is that you don’t need a team of rock stars if you can assemble the right mix of average players.  Basic plot: Brad’s character loses his three best players and asks for more money to replace them.  He's refused and sits brooding manfully while experienced talent scouts discuss who they can get for the budget available, trying to maximize the talent to cost ratio for an optimized outcome. 

At which point Brad points out caustically that the ‘optimized outcome’ is that they'll still lose with the players they can afford and storms out.  Fortunately, about ten minutes later he meets this economics PhD guy working for some other team (er… can you tell I’m not a diehard sports fan?) and learns you can achieve the magic of one star player by combining the average performance of, say, three. 

Why would you want to?  Because it’s cheaper. The key element here is that a single top player may cost more than an entire team of non-top players, way out of proportion to the actual difference in skill.

Now, we know what Mark Zuckerberg would say about this but it’s interesting to think you can systematically identify the winning elements of a game and combine individual average results to achieve the total level of performance you need to win.  Give me a call, Mark.

Like I said, it's interesting but not terribly practical because you need a doctorate in economics combined with amazing leadership skills to assemble a winning team of non winners.  Since most people have neither an absurdly high IQ nor amazing leadership skills, there's nothing to see here, folks.

But what intrigued me as a possible takeaway from a business perspective is the idea that companies also tend to overvalue top talent and undervalue everyone else.  Check out my post Who Do You Love? to learn more about why most top talent is identified incorrectly from an organizational development perspective.

Here's the thing: Paying top dollar for the people everyone wants can work if you have really deep pockets.  But if you don’t, you might do better with some creative talent sourcing from the C list rather than stretching your budget to attract the B list.

The lesson from Moneyball is that assembling a team based on the ‘best’ people you can get for your money isn’t a winning strategy unless money is no object, and even then it’s questionable.  The reason following the pack doesn't work is that ‘talent scouts’ in every industry tend to write off talented people based on personal preferences rather than actual skills or potential.

It's hard not to, given that they don't have the same kind of information about business talent that is available about baseball talent (runs, hits, bases, etc.).  In future, Big Data may help us find hidden potential outside our own companies but today you have a better chance finding these people from within. 

Here are a couple of ideas:

• People who consistently perform
• People who ask for new challenges
• People who take care of customers
• People who look out for others

Doesn't that sound like a great starting line up?

Laura Schroeder is a global talent specialist at Workday, headquartered in Pleasanton, CA.  She has nearly fifteen years of experience envisioning, designing, developing, implementing and evangelizing global Human Capital Management (HCM) solutions and holds a certificate in Strategic Human Resources Practices from Cornell University.  Her articles and interviews on HCM topics have been published in the US, Europe and Asia.  She lives in Munich, Germany and enjoys cooking, reading, writing, kick boxing (well, kicking things) and spending time with friends and family. If you want to read more from Laura, check out her talent management blog Working Girl or follow her on Twitter @WorkGal.

Picture courtesy of Salvatore Vuono's Free Digital Images.

Comments

[E. James (Jim) Brennan]

Being mostly a behavioral economist, I greatly enjoyed the book, which was really not that complicated. Not like "The Big Short" (which is FILLED with detailed proofs that incentives work) but more like his stories about the financial crises in Greece ("Beware Greeks Bearing Bonds") and municipal America ("CA and Bust").

You got the main points, Laura. The scouts didn't really analyze the desired outcomes from prospects but instead imputed talents based on superficial guesses, weighting subjective traits of appearance and style over essentials like how often they got on base. The institutional stubborness of the baseball gurus allowed a low-budget team to pick up players ignored by others who could together more than substitute for one superstar who costs more than all of them combined.

Don't be so quick to dismiss the practical lessons. Nearly every uniformed service in the world from Military to Firefighter does the same thing that exact way. They focus on mission-critical KSAs and constantly drill people with "task, condition and standard" performance techniques so many ordinary folks can do extraordinary things. Emergency response services like those do not seek "heroes" or demand Mensa members because they are designed and organized to do specific things with mundane resources. Their success therefore does not rest on a few key individuals but on team performance, just like every other really big enterprise.

[Dillweed]

Hi Laura,

I was struck by your comment "...you need a doctorate in economics combined with amazing leadership skills to assemble a winning team of non winners. Since most people have neither an absurdly high IQ nor amazing leadership skills, there's nothing to see here, folks.", and thought of an exception: the military. Here we have the Ellis Island - "Give me your tired, your poor / Your huddled masses yearning to breathe free / The wretched refuse of your teeming shore / Send these, the homeless, tempest-tost to me / I lift my lamp beside the golden door!" - of recruitment and year after year, they have had one success after another on the battlefield. Frankly, they do an amazing job!

[Laura Schroeder]

Thank you, @Jim and @Dillweed, I agree the military does an amazing job. To be honest, I was thinking more of the implications for businesses but thank you for pointing out that the military has been able to put some of these theories into successful practice.

[E. James (Jim) Brennan]

And make note that the star of the Moneyball story Billy Beane was not the team's Head Coach but the General Manager. Coaches are the ones paid to lead the players while the GM typically stands behind the scenes. GMs are forbidden by MLB rules from sitting in the dugout, as I recall, and Beane himself couldn't stand to even watch the games so he never used his private box section. His actual "leadership" was intellectual, impersonal and systemic, like that of the entertainment producer who buys the talent and controls the materials that the director turns into a show. The real story proves that you can work behind the scenes without a winning personality to assemble talent that produces a winning record.

THAT is very important for compensation people to know, since most of us are more like Billy Beane than Brad Pitt.