I traveled to San Francisco for our annual Holiday Inn Express Franchise Convention where Billy Beane, General Manager from the Oakland Athletics baseball team, spoke to us. He’s the main character in the book Moneyball by Michael Lewis. When the movie was made Beane was played by Brad Pitt. (How cool is that!)
Though the Athletics were outspent by almost every other Major League Baseball franchise, Beane still assembled a winning team. How? Not by going head to head with the Yankees and the Red Sox and out bidding them for players, but by signing less expensive players with underutilized talents. Instead of relying on a visual scouting report, Beane analyzed statistics to discern which players he should purchase for his team. For example, Beane found that On-Base Percentage was the statistic most correlated to winning, and so Beane scouted players who were good at getting on base. Beane didn’t care how the player looked or about their other deficiencies. While others looked at baseball as a sport, Beane saw playing baseball as a skill and managing baseball as business, so instead of hiring ex-baseball players, Beane hired a Harvard mathematician on his management team. Armed with this statistical approach, Beane has become one of the winningest General Managers in all of Major League Baseball. Now all baseball teams use this type of analysis, but it was Beane that changed the rules and by doing so gave the Oakland Athletics a crucial advantage over the other wealthier teams. The lesson for small companies like ours – don’t go head to head with your bigger competitors, view the world differently and reinvent the rules for an advantage that you can exploit.