If I Were Running A Company…The Extra 2%

Billy Beane's 'Moneyball' philosophy hasn't paid dividends in the playoffs. (Getty Images)

If you ask many HR professionals who love sports, most of the people would put Moneyball in their top 5 HR sports books of all-time. I’m not going to argue that since it introduce to the world of saber-metrics, looking at quantitative and qualitative statistics for sports and business, and thinking outside the box. The book was so good, Hollywood is making a movie with Brad Pitt (which is out on September 23). HR professionals here and here crave of the book and suggested HR should look into more data/statistics driven for their business. It was a great book and I considered being a top 5 sports book…until a few years ago.

Moneyball was a coming out party for statisticians and economics as math and business as it coincide with sports and real-time. It was a breakthrough in sports and in business. However, there were two problems why Moneyball has been devalued. The first problem is the Oakland Athletics only went far as the American League Championship Series in 2006. From 2003 (when Moneyball was published) to today, two teams with a lower payroll than the Oakland A’s that went to the World Series: the 2003 Florida Marlins (which won the World Series by beating the New York Yankees in 6) and the 2008 Tampa Bay Rays. The other (and primary) problem why Moneyball devalued is three words: the human element.

People praised Moneyball because it was innovative and became the new Bible for businesses to find talent and resources with limited funding. What most don’t know is the person behind Moneyball, Oakland A’s General Manager, Billy Beane. Before the book was released, Billy Beane was an up and coming GM who was the toast of MLB when he brought the Oakland A’s, with a small payroll and limited resources, to the playoffs in the late 90s-early 2000s. Since the book was released in 2003, the A’s have made one playoff appearance. The problem: Billy Beane. Beane had a philosophy to have almost everything based on statistics. Beane would only look at a few like how many pitches you take and on-base percentage. Beane’s other philosophy is that the field manager just manages and plays sidekick to him. It worked with Art Howe until he bolted to manage the New York Mets in 2002. It was likely going to work with Ken Macha until Beane fired him after the 2006 season when the A’s were swept by the Detroit Tigers in the ALCS. Then, Beane hired Bob Geren in 2007, who the players hated, and was let go this year. In that 2007 year, the A’s did have and internal candidate with Ron Washington. When the A’s passed on him, the Texas Rangers hired him as their manager. In 2010, Washington led the Rangers to their first World Series ever.  Simply put, Moneyball made Billy Beane from a rising star in baseball to an egomaniac that had several interests.

This leads me to the newest book HR and sports fans should have in their collection: The Extra 2% by Jonah Keri. To summarize, it’s Moneyball with more emphasis on people and relationships (and defense). It tells the story of three former Wall St. execs (owners Stuart Sternberg and Matthew Silverman and GM Andrew Friedman) that helped the Tampa Bay Rays from perennial losers to contenders in the American League. What this story sets apart fromMoneyball is how the front office views each department (baseball operations, PR, events, infrastructure) and how to get the right people for your organization. The Joe Maddon chapter from the Extra 2% exemplifies that while you have resources and talent, you need someone who can interpret your culture and information. Joe Maddon was viewed as part of the front office and not as a “middle manager.” With that mentality, the Rays won the AL pennant in 2008 and won the AL East in 2010.

The only problem the Tampa Bay Rays have doesn’t concern baseball, their team, or their front office. Their main issue is real estate. The problem playing in Tropicana Field (“the Pit”) is 1) the ballpark is an arena, hence all the catwalks and fewer seats, 2) their field is at St. Petersburg, where the nearest neighbors are 30 minutes away and 3) the expiring lease on the park is nearly 20 years away. The new ownership wants a new stadium in the Tampa area, but local officials are not willing to do it, which would prevent future free agents to come so the Rays organization have to stick to their plan.

While many HR professionals want our profession to be more data driven, be careful what you asked for. Sure, statistics are important and you want to forward your information to the executives, but it is important your know how to interpret the information and look at all possibilities with this information based on statistics, current culture, and current confidence of your organization. Statistics only plays a part of the decision, human nature makes up for most of it.

In 1999, Billy Beane was the most innovative person not only in sports, but in business. When technology helped neutralized baseball through the years, Beane stayed the course but did not make any adjustments, hence his star status dropped. What HR needs is not innovation, it needs progressive thinkers who look at all possibilities and outcomes and their consequences. If you have executives who go “by the book” from statistics and trends, your organization would do well, but will not reach its optimal goal. If you have executives who go outside the box, it’s a risk-reward but the rewards would most likely be beneficial if planned and executed right.

So HR, don’t be Billy Beane…be a Joe Maddon.

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