Management lessons from Brad Pitt and Moneyball

Brad Pitt’s new hit movie Moneyball is about baseball, but its premise is all about business, business intelligence and finding new paths to success. Business leaders could learn a thing or two while munching popcorn at a good movie.

Pitt plays Billy Beane, the general manager of the cash-poor Oakland Athletics, who was the first in baseball to build a team based on sabermetrics, or objective, empirical evidence. Beane tossed away the “old way of doing things” and began measuring the right things, like on-base percentage instead of simply batting average.

“we’ve got to think differently,” and BI software only works if you’re doing that and measuring the right things.

His assistant general manager, played by Jonah Hill, convinces him that with Oakland’s financial handicap he cannot build a winner without shaking things up in the baseball world: “Your goal shouldn’t be to buy players. Your goal should be to buy wins and in order to buy wins, you need to buy runs,” Hill insists. “I believe there is a championship team that we can afford because everyone else undervalues them. (These players are) like an island of misfit toys.”

While Beane was ridiculed early on, his way of thinking now dominates the baseball world: think differently, be flexible, and avoid herd-like thinking or risk extinction.

Think we’re overstating the case a wee bit like only a good Hollywood movie can? Look at just a few examples in business where a Moneyball concept was employed and where it wasn’t:

Amazon.com became a powerhouse selling books, traditional paper books. Nevertheless, they kept an open mind and when the data showed them an industry being disrupted by digital, they responded and shifted focus to digital readers and developed the Kindle. Today, Amazon sells more e-reader books than paper books.

On the other side of the ledger, look at Kodak. The company’s R & D folks were way ahead of the pack in digital photography a few years back, but the suits upstairs continued thinking old school and ignored the digital tsunami for too long because margins in film were still high.  Kodak is now fighting for its life with its share price plummeting from $30 in 2007 to $1.50 today.

There are so many other examples like this where companies enjoyed the good times and refused to take a Moneyball strategy in their business: From North American auto makers content on building SUVs and vans instead of investing in energy-efficient vehicles; to newspapers losing 30 per cent of their revenue overnight by letting their classifieds slip to the likes of Craigslist, Kijijji and others; to Yellow Pages believing their monopoly on directories was impenetrable.

Today, with the business intelligence software available, there is no reason for executives to “talk the same old nonsense” – something Beane accuses his scouting staff of doing. With business intelligence systems we can not only crunch numbers, but do so in real-time, meaning mistakes can be eliminated faster and successes can be more heavily bet upon. As Beane says in the movie, “we’ve got to think differently,” and BI software only works if you’re doing that and measuring the right things.

And that’s a lesson Canadian business leaders (and hockey teams) should keep in mind, either at the movies, in the boardroom, or on the ice.