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Innovation: A Baseball Story
October 22, 2013 at 10:36 AM
Billy Beane had a problem.
As the General Manager of the Oakland Athletic Major League baseball team, Beane was coming off the 2001 season where the A’s experienced a significant increase in their win percentage, which took them to the playoffs. But, with this jump in performance came a healthy dose of bad news. Three of the Oakland A’s best players, all free agents, left at the end of this season and went to play for other teams for more money, leaving Beane with a gutted team, needing to rebuild for the 2002 season, and all on an ‘unfair’ budget.
At once, Billy Beane had to build the business equivalent of a ‘better mousetrap’ to return again to postseason play in 2002 (that’s baseball lingo for making it to the Playoffs), within the short space of the baseball off-season, and with a fraction of the operating budget of other clubs.
Some of us don’t care one iota about baseball. But, in the spirit of innovation, how Billy Beane went about replacing three significant players, on a miserly major league budget, made it to the 2002 Playoffs, and pioneered what has become known as the reinvention of baseball – is a story that we all as entrepreneurs and innovators can learn a great deal. It is a classic David and Goliath story with a modern day hero’s weapon, relative in scope to David bringing a slingshot to slay a giant, being found in 21st Century technology capabilities. And there is a little something for everyone to witness just how creativity, innovation and a healthy appetite for risk can light the way out of desperate or seemingly no-way-out business situations.
“Moneyball,” the film adaptation of the book, “Moneyball: The Art of Winning an Unfair Game” by Michael Lewis, is a recounting of these true events that happened with the Oakland A’s baseball team and led by General Manager, Billy Beane. Like many non-fiction film adaptations – the writers insert a little fiction here and there, and distort the realities of some events that help the film-maker tell the story they want to tell.
Regardless, the film honestly depicts four critical aspects of responding to solve big business problems with pioneering innovation. Each aspect is actually captured in a highly entertaining scene.
Define the Real Problem: In the beginning of the film we find Billy Beane, played by Brad Pitt, in a meeting with his talent scouts and management team discussing ‘the problem’. There is Beane all by himself on one side of the tension rope and his entire staff pulling on the other end. Beane gives a giant tug on the rope by challenging his staff to define the problem the Oakland A’s are facing at the end of the 2001 season. False premises ring forth from each staff member as they define the problem as they see it through a status quo lens; having to replace three key players; having to figure out how to put together a team to win a certain number of games; rebuild an entire team in the off-season, etc.
“No,” says Billy Beane. “The problem is that there are rich teams and there are poor teams. And then there is fifty feet of crap. And then there’s us … is there anyone out there who could replace (our first baseman and key player) Giombe? … if there was, could we afford him? No. We have to think differently … if we try to play like the Yankees in here, we will lose to the Yankees out there.”
The Best Right Solution: During a recruiting trip in Cleveland, Billy Beane meets Peter Brand (fictional name and played by Jonah Hill), special assistant to Mark Shapiro, the General Manager of the Cleveland Indians. Beane’s curiosity about Brand is heightened when he observes this youngest member of the Cleveland staff single handedly sabotage his efforts to recruit one of the Cleveland Indian players to Oakland. After this unsuccessful recruiting meeting, Beane immediately hunts Brand down and invites him for a private conversation in the parking garage. Things turn interesting as we get a glimpse of the different thinking Beane has been proselytizing about in Oakland, coming from Brand.
The young and intimidated Peter Brand reluctantly shares his thinking about baseball using the example of why he wants to keep this certain player that Bean tried to recruit.
Peter tells Billy Beane: “There is an epidemic failure in the game to understand what is really happening. People who run major league baseball teams misjudge their players and mismanage their teams. People running ball clubs think the goal should be to buy players … the goal shouldn’t be to buy players, it should be to buy wins. And in order to buy wins, you have to buy runs.”
We learn that Peter Brand is a Yale graduate who studied economics and is in his first job with the Cleveland Indians. This kid is supposed to be green. But, what Brand is describing to Billy Beane is all based on his study of the principles of sabermetrics, the empirical analysis of baseball, coined by Bill James, a pioneer and strong advocate of data analytics practice for baseball. Directly after this encounter with Peter Brand, we see Billy Beane studying the principles of sabermetrics, with the foreshadowing that this is it. Sabermetrics may be the great equalizer the Oakland A’s need to rebuild a competitive team by recruiting and maximizing under-valued players whose value has gone undetected by most of baseball because they overlook the story the data tells.
Getting all Stakeholders On-Board: It’s often lonely at the top, but great leadership is about conviction, persistence, courage and sometimes, the ability to throw a punch or two to keep things moving in the right direction. Beane hires Brand to come to work for him as Assistant General Manager and help him implement sabermetrics principles to rebuild a competitive team. Peter Brand sets up recruiting metrics and qualifiers around one number – runs on base – or the ability for a player to make it from at-bat to first base.
Much of the middle part of the film “Moneyball” deals with the drama of almost all Oakland A’s stakeholders resisting, and some publicly ridiculing Billy Beane and the idea that their team could be best rebuilt by recruiting players almost exclusively on their ability to get on base – or on-base percentage (OBP). It isn’t until the Oakland A’s tear a winning streak of 19 consecutive games and tie the longest winning streak in American League History (Wikipedia), that Beane gets the recognition that these new methods may just work.
Schumpeter’s Creative Destruction: The A’s make it to the 2002 playoffs. They lose in the first round to the NY Yankees. And while Beane suffers monumental disappointment for falling short of winning the series, he gets noticed by John Henry, owner of one of the richest teams in baseball, the Boston Red Sox. Keith Law, Senior Baseball Writer at ESPN writes this about one of the film’s final scenes where Beane meets John Henry, who not only offers Beane the General Manager’s job for the Red Sox, but would make him the highest paid GM in all of Major League Sports:
“Beane is sitting in what was then called the .406 club at Fenway Park with John Henry, who is about to offer him a record-breaking deal to become the Red Sox’ new GM. Henry expounds on how Beane’s method of doing things is going to sweep through the industry, and how critics within the game weren’t just trying to protect the game, but were expressing their own fears about their livelihoods. That speech applies just as well to any industry undergoing the kind of creative destruction ushered in by Bill James, Sandy Alderson and Billy Beane.”
History writes that Beane stayed with Oakland, the Boston Red Sox implement sabermetrics analytics to guide their recruiting methods, and go on to win the World Series two years later. This win becomes historically significant in Red Sox lore, as they had not won the World Series since 1918 – infamously called “The Curse of the Bambino.”
- Marilyn Carpenter, director of venture development
About Marilyn: Marilyn Carpenter serves as Ventureprise’s director of venture development. With over twenty years of working with and for entrepreneurs in pivotal sales, marketing and business development roles, Marilyn assists clients to accelerate their growth through coaching effective go-to-market and customer acquisition strategies.
Marilyn is also a published author, blogger and a speaker. Her topics on Ventureprise Vibe are focused on provocative innovation-driven entrepreneurs and enterprises, Lean Startup methods, and storytelling about clients and people up to big things in the entrepreneurial space.