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Performance Management and Moneyball

Monday, November 7, 2011

Blackberries, iPhones, and other smart phone devices were suppose to stop bar fights and kill heated discussions amongst friends. Not this weekend with my two friends of over 15 years. No web pages could help us with our argument over the effectiveness of Moneyball.

For those of you who didn’t read the book or see the movie, the abridged definition of Moneyball is using statistics to choose the right baseball players for the right price. The notion is that most baseball players are worth less than their multi-million dollar contracts would portray. You can find more information on Moneyball on Wikipedia.

In any case, one side took the stance that Moneyball does not win World Series. I argued that it did and that the Boston Red Sox was a great example of that. He then made a sound counter argument: the Red Sox have a ton of money.

However, he missed the real point of Moneyball because he isn’t familiar with performance management strategies. The value of Moneyball is not necessarily picking up decent players for a good price (although that is the end result of the methodology). The real value of Moneyball is changing the performance measures of baseball players. In the past, baseball players were rated by stats such as batting average and runs batted in (RBIs). Moneyball argued that measurements such as on base percentage and base runs were better performance indicators.

Which brings up a common challenge in business intelligence: choosing the right metrics. That’s a topic unto itself.

Anyways, back to the main topic, the Red Sox won the World Series because they used Moneyball performance indicators AND had a ridiculous bank roll. They could buy any player they needed.

Was Moneyball the only reason they won the World Series? No, because there are definitely human elements in play that are harder to measure such as the ability to perform under extreme pressure aka not choking.

I believe it does play a part in building the right baseball team because of the impact it had on the Oakland Athletics – the American League record of 20 consecutive games in 2002.

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