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Ken Keller: Sometimes, you have to ‘think differently’

Brain Food for Business Owners

Posted: April 22, 2012 1:30 a.m.
Updated: April 22, 2012 1:30 a.m.

I grew up rooting for Marichal, Mays, McCovey and Gaylord Perry playing for the San Francisco Giants. Fortunately, across the bay from Candlestick were the Oakland A’s, a team I watched win the World Series in 1972, 1973 and 1974.

This past weekend, “Moneyball” was on cable. In my opinion, it is the single best movie on business ever made.

The film opens with Billy Beane, the A’s general manager, meeting with the team owner after the 2001 season. Top players have departed. Beane is told that there is no additional money available for talent.

Beane must find a way to field a competitive team without the financial resources of his better funded competition.

What he discovers is a way to put together a budget team using computer-generated analysis.  Beane hires young Peter Brand, who uses computer modeling based on Bill James’ statistical baseball data.

All organizations have one significant metric. Brand explains to Beane that the number they need to hire for is on-base percentage (OBP).

Beane simplifies the concept for a player: “You get on base, we win. You don’t, we lose.”

The first resistance comes from the scouts. For decades, scouts identified talent and made recommendations that were universally accepted.

Beane tells the scouts: “The problem we’re trying to solve is that there are rich teams and there are poor teams … It’s an unfair game. And now we’ve been gutted. We’re like organ donors for the rich. Boston’s taken our kidneys. Yankees have taken our heart. And you guys just sit around talking the same old ‘good body’ nonsense like we’re selling jeans.

We’ve got to think differently. We are the last dog at the bowl. You see what happens to the runt of the litter? He dies.”

The second point of resistance comes from field manager Art Howe. Howe’s opposition is partly because he believes in old school thinking.

Howe is also opposed to Beane because he was not consulted about the new strategy.

Howe ignores Beane when Beane requests that Howe play certain players. The owner is also skeptical; from April 20 through May 24, the A’s cannot string two wins together; they go 5-16 in that period, last place in the division.
Beane and Brand state that things will turn around soon, and the team will be competitive in its division.

To win, the team must field players most capable of getting on base. Given Howe’s resistance, Beane trades and demotes players, leaving no option for Howe but to use the players that are left, those Beane and Brand have determined more likely to get on base.

The team record improves. In June, the A’s win 20 games and lose 7.  July is another winning month — 15 victories and 12 losses. On Aug. 13, the team starts winning and establishes a new American League record by winning 20 consecutive games.

The A’s make the playoffs but are soon eliminated. Beane interviews for the GM spot with the Boston Red Sox. His potential boss sums up Beane’s accomplishments:

“For $41 million, you built a playoff team … You won the exact same number of games that the Yankees won, but the Yankees spent $1.4 million per win and you paid $260,000 … I know you’ve taken it in the teeth out there, the first guy through the wall always does … It’s the threat of not just the way of doing business, but in their minds it’s threatening the game … I mean, anybody who’s not building a team right and rebuilding it using your model, they’re dinosaurs.

They’ll be sitting on their …  sofa in October, watching the Boston Red Sox win the World Series!”

The Red Sox won the World Series in 2004 using Beane’s system. Beane remained in Oakland.

Hannibal told his generals that when it came to crossing the snow-covered Alps, “I will either find a way, or make one.” Or you can become extinct like the dinosaurs.

Which option will you choose?

  Ken Keller is CEO of STAR Business Consulting Inc., a company that works with companies interested in growing top line revenue. He can be reached at Keller’s column reflects his own views and not necessarily those of The Signal.


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