Five Lessons Any Entrepreneur Can Learn from The Movie Moneyball
Moneyball is a 2011 movie based of Michael Lewis’ book that details the Oakland Athletics baseball team and their 2002 season managed by Billy Beane (played by Brad Pitt). Moneyball is the true story about how the Oakland A’s, a small-market team, used a revolutionary strategy to compete with large-market teams, despite having far less money. There are a few lessons any entrepreneur can learn from the movie Moneyball in order to revolutionize the field they’re playing in.
Moneyball is an unlikely source for great business advice for entrepreneurs.
Crushed by the big budgets and big name players of teams like the New York Yankees and the Cleveland Indians, Billy Beane is forced to take a risk and do something no team has done before — abandon traditional recruiting methods and employ computer-generated analysis to acquire and trade players. And in doing so, he changed the face and landscape of the game forever.
Using this new approach, Billy Bean propelled Oakland Athletics from a low-performing team to a spectacular success that shocked the sports world.
They were able to rise from what looked like a slow but certain death to a spectacular series of successes. At the end, Oakland Athletics, the team that finished the previous season with the worst record in Major League Baseball, sets a new American League record by winning 20 consecutive games in 103 years’ history of American League baseball and that too with one of the lowest budgets in the league. Along with many valuable lessons on business, Moneyball also provides useful insights on executing a strategic plan, leadership and creating change.
In many ways, the challenges faced by Billy Beane in 2001 are alarmingly similar to those faced by many organizations today, especially given the ever evolving economic and people landscape.
More and more, our leaders are facing the same challenges — do more (or at the very least the same) with less. Less money, less resources, less people — the same messages Billy Beane was given by the Oakland A’s owners heading into the 2002 season. Simon Sinek posted a solitary line on his LinkedIn page; lack of time + lack of resources + optimism = innovation. The Oakland A’s serve as a perfect example of living out this algorithm some 20 years before Simon Sinek bought it to the table!
Moneyball is much more than a great story though. So many valuable lessons are littered throughout this brilliant movie, many of which can be applied across traditional organizations to help deliver strategic outcomes whilst maintaining a focus on controlling costs.
Moneyball is a great movie with some great business lessons. There are numerous articles on the management lessons of Moneyball but I thought the movie also had some great lessons related to strategy and entrepreneurship. This movie covers many important entrepreneurial lessons. Let’s find out!
Moneyball Lesson #1: Think outside The Box
The 2002 Athletics had one of the lowest budgets in the league, along with some of the lowest expectations for success. When Billy Beane was hired, he knew he had to switch things up. He was able to take the risks that nobody else wanted to, which meant going against the wishes of the coaching staff, recruiters, players and media. In order to avoid stagnating, sometimes thinking differently is required.
Doing business is not about exiting for millions of dollars or going public. It’s about changing the game.
It’s about seeing something that’s not quite right in the world, and deciding you want to fix it. We’ve got to think differently. Steve Jobs wrote it as think different (intentionally going with the grammatically incorrect version because it sounded better). Like the Oakland As, your business is also working under constraints. Often, big constraints. Often, unfair constraints. If you’re trying to disrupt the status quo and beat competitors that are much bigger and better funded, you’re not going to do it by playing their game. You’ll need to think differently. Playing the old way when you’re at a disadvantage is a sure-fire way to lose.
The majority isn’t always right, yet we tend to accept that since everyone else is doing it then it must be right.
Well, that can be a recipe for disaster. Billy Beane was forced to think differently about the game of baseball. He didn’t have a huge budget to lure top players like big market teams. He didn’t have lucrative TV deals and sponsors to generate the resources similar to other clubs. If he was going toe to toe with the competition, doing things the way they did, the A’s were doomed to fail. So he focused on what he did have — a great minor league farm system, all the data he could want on players, and the authority to change things up. Billy’s unique approach changed the team’s priorities and focused where the competition wasn’t, such as spending more time looking for great high school players. Billy didn’t blindly follow the rest of baseball, or even listen to his own scouts, instead he looked for a new way to do things to create better results.
Organizational culture, if not nurtured well, can be a daunting adversary.
There are the clichés about what got you here won’t get you there, and culture eats strategy for lunch. But change is not easy, especially when it comes to people. The A’s scouting staff feel that Billy Beane is not letting them do their job, that he needs to have faith in the process that has made them successful in the past. It’s very much a culture of it’s always been done this way and anything else is doomed to fail. True leaders challenge old mindsets and push the organization out of it’s comfort zone. But going against the grain requires courage. A leader with organizational authority can push his or her way forward. But it comes at the cost of employee disengagement, morale, and dissatisfaction. It requires tough honest conversations with those that don’t see or agree with the strategy.
Playing the game on your competitor’s terms is no longer a viable option. It can only lead to frustration and failure.
Your business really isn’t that different from the Oakland A’s baseball team. If you’re a start up or a small-mid size business, you’re likely working under some tight (and possibly unfair) resource constraints. If you want to grow and to challenge competitors that have much deeper pockets, you need to level the playing field or you need to change it completely. It is impossible to beat anyone if you insist on letting others dictate the terms. You must start by thinking differently. What would need to change in order for you to have the advantage? What can you do differently right now to achieve your objective? How can you adapt or modify your approach to get what you want?
Moneyball Lesson #2: Don't Buy Players, Buy Wins
Results are the name of the game. The movie Moneyball would have never hit the theaters if the Oakland A’s did not achieve results. The same goes for your business. It’s not about traffic, likes, tweets etc. It is about the results – wins! Do what works for you business and if you have not discovered it yet, keep planting the seeds until the success that really matters starts to come. Also remember to hire and surround yourself with people that get results — no matter their age, gender, nationality or sleep habits.
Often, people who run organizations think in terms of finding talent (getting more people).
Our goal shouldn’t be to find talent, our goal should be to achieve our strategic objectives and in order to do that, you need capability. Capability comes in many forms however all too often the answer is going to market and recruiting a permanent employee. What if we really only need a portion of what that individual has to offer capability-wise or perhaps all of their capability but only some of the time? Are we then not potentially underutilizing that person if we engage them permanently? By more clearly understanding exactly what the strategically critical capabilities required are, we can be far more targeted and efficient with how we source those capabilities.
Redefining problems to find new and fresh solutions is one of the most valuable lessons anyone can learn in management, business or elsewhere.
We frequently hear strategists and company directors coining the phrase If you’re always doing the same things, you’re always going to get the same results? Billy Beane knew he had to change things because at the end of every season it was the same story — they were losing players to bigger teams and losing ground on the top teams. He selected a strategy he believed would work best for his team and put together a team of undervalued players to help him win with the strategy. Your strategy may not be popular but sometimes that’s what you have to do to move forwards and succeed. How many teams step out of their comfort zones and risk it all for changing the game?
Sure. It is important to get the right people on your bus. However, in order to do that, you need to figure out exactly what needs to get done and hire people who can do it.
Don’t get caught up in fancy titles, big salaries, stock options and what looks good to the outside world. If you want to be successful you must be in the business of plugging gaping holes and buying outcomes. If you need more customers and sales, hire someone that you know can and is incentivized to close business. It doesn’t matter what you call him, what matters is that he can produce the result that you need to survive and thrive in your business.
When you consider what the desired outcome is and make that your primary goal, you gain perspective towards finding multiple solutions to attain the outcome.
This actually helps you to improve your problem-solving capabilities, helping you to become a more versatile company with an agile structure. In essence, outputs are what you do to achieve your goal and outcomes are the why. Outputs are all of that hard work your team puts in with the data and metrics to back it up. Outcomes are why your department or team exists and how it impacts your mission, company, and customers in the grand scheme of things. When you can deliver solutions that help organizations focus on and manage customer outcomes, you will enable better experiences and deliver desired outcomes for the customer and the business.
Moneyball Lesson #3: Focus on Real Issues
The scouting staff of the Oakland A’s is going about the difficult situation with a narrow view of the problem and a business as usual attitude. The scene in which Billy Beane repeatedly asks them to state the real problem they are trying to solve is very good. Many times organizations lose their way by not grasping the real problem, and doing things that have always been done, in ways that have been done.
Leaders are able to get to the real issues because they ask the right questions.
This requires a deep understanding and awareness of the situation. In business and in life, it’s important to step back and ask — Are we solving the wrong problem? Defining problems is a critical business skill. Identify the fundamental problem and then focus on solving the problem. Simple in theory. However, don’t get distracted by short term thinking, think about how you fix it in the long term and break it down to find the best solution. Be careful, who you listen to… sometimes people that have been with the company longer than the furniture have a short sighted mentality, which can be more of a hindrance than a help. Figure out what the actual issue is, and solve it.
For instance, conventional thinking around talent acquisition can be archaic.
Every day, blogs are written and forums are created posing questions like; How do we win the war for talent? What are our competitors doing to source and secure top talent? How do we compete for talent if we can’t pay what others can? How can we ensure we have the right people, in the right place at the right time? Yes, organizations and leaders are asking all the wrong questions. So, what are the right questions? Well, we could consider asking questions like: What are we trying to achieve as an organization? What are the most strategically aligned and critical capabilities we require to deliver our strategy? What are our options in terms of sourcing that capability? In short, conventional thinking could shift from how do we find talent? to how do we source capability?
Before you write a business plan. Ask yourself one question: Are you solving a problem people actually have?
There is a great scene at the beginning of the movie, where Billy leads a scouting session to focus on the season ahead and what the team needs moving forwards. Billy asks them to define the problem. What is our problem? he keeps asking one after the other. Every one of them fails to define what the real problem is, because no one see’s past the hard facts, and because they all fail to grasp that unless they re-evaluate their current situation, they are going to continue the same pattern.
It is very easy for you to be distracted by all the issues and rhetoric swirling around the actual problem.
The more you (or others) have personally invested in the status quo, the more you will be prevented from seeing the real problem for what it is. Seek advice and perspective from people outside your industry — those inside will be emotionally attached to the way things have always been done and thus, they have become part of the problem. Your number one objective is to determine what the actual issue is, and solve it. You don’t have time to get caught up in meetings talking about why it is a problem or re-engineering band-aid fixes that have not cured it in the past.
Moneyball Lesson #4: Strategy Takes Time
Billy Beane was criticized by the media, his staff and the public after an awful start to the year. However, he stuck with his strategy, allowing it time to play out and eventually become successful. When it comes to implementing your strategic plan, don’t be disappointed when there are no immediate results. Many strategic plans fail because organizations believe strategy can be built in a day. In reality, days or even weeks of preparation and assessment is necessary before and after a strategy session.
Remember, you’re building for longevity, not short term outcomes. It will take patience to see the strategy fully executed through your organization.
Be a little bit patient. Often, your best people will take a little time to really shine. Don’t judge too early. Determine the context. If someone’s not cranking yet, is it because getting up to speed at your company is hard? Everyone’s too busy to show them the ropes? Their lack of early performance could be the context, so be patient. But, don’t be too patient. If someone isn’t at least moderately productive in the first month or two, it’s unlikely they’re going to be super-productive in the following year. The really great people tend to deliver some value almost immediately.
The first six weeks of the season were a disaster for Oakland. Nothing went right.
Billy Beane stuck to his vision despite being heavily criticized by fans, his staff and the media and was rewarded with record breaking unbeaten run. If you’re implementing changes in your team, then you need to be patient. Rome wasn’t built overnight and sometimes your best people will take a little time to really shine. Constantly evaluate the process and find out what’s working and what’s not. If someone or something is massively affecting the impact of your strategy and compromising the success of your team then remove it. Surround yourself with great people and team players, and trust them to perform.
Sometimes business people get confused about what business strategy is best suitable for the growth of their business but to understand this one needs to stick to a plan for a certain period rather than changing it frequently.
Time and opportunity are things that don’t come repeatedly so it is very important that one utilizes the opportunity at the right time to get success in life. But sometimes acting too quickly may also hamper the cause as that might not be the right moment to act, so it is important to keep patience and wait for the right moment and opportunity. In business right time provides one the opportunity to be successful in life and achieve your dreams or may beyond it as well, one just needs to wait for that moment to come.
Be patient with employees and develop a great work culture.
As a good businessman, one needs to understand that frequently change of employees will not help in growing his business as he is investing his time and money to train the employee and if he has to take a new employee within short span of time then all the money and time invested on him get wasted and again when recruiting new one same process need to be repeated again. So one needs to be patient with the employees and also look to develop a great work culture so that employees cherish to work in this work culture and never think to quit the job.
Moneyball Lesson #5: Raise The Bar
Though his team had 20 consecutive victories, Billy was concerned about winning the series, not just making records. Even after achieving the record of20 consecutive wins, Oakland Athletics couldn’t win the series. Records or awards are not proxy for continuous winning. There have been many instances when leaders win prestigious awards and later lose to the competition in the business world.
Success breeds complacency. Complacency breeds failure. Only the paranoid survive.
After the Athletics’ wildly successful season with Billy Beane using a data-driven strategy, the rest of the league had no choice but to take notice. One team, the Boston Red Sox, made Billy Beane a job offer to come implement his strategy in Boston, but he refused. Two years later, Boston won a championship with the same model Oakland had used under Beane. When building your strategic plan, it’s important to keep this in mind. Your success will attract imitators, and you better have a plan to re-position or outlast them to remain ahead. It won’t be difficult for your competitors to adapt your strategy if they see success.
Leaders set higher bars. Real leaders push harder and further.
When the rest of the world was singing praises about Oakland winning 20 games in a row and moving on to the playoffs, Billy Beane said they would need to win series to really have achieved his goal of changing the game. Most people would be happy with 3/4th of a goal as big as the one Beane set out to achieve — real leaders have higher expectations. I think real leadership understands that in order to have any success you have to set your sights just a bit further down the road than the rest of the world. Beane did that.
You must understand what you are hoping to achieve and level you’re aiming for.
If you don’t set a goal then you have no destination — if you don’t have a destination then you have no way of measuring success — if you have no way of measuring success then your team has not hope. The best leaders understand what they want and set the standards for achieving it. Billy Beane’s goal was to take the Oakland A’s to a championship and build a winning team. Raise the bar and set higher expectations! Sound easy? It is. Raising expectations is not about increasing workload, it is about setting higher expectations to increase results. Start by raising the bar on yourself. Then work your way down to your direct reports and advise them to do the same. Before long, everyone in the organization will receive the message that the bar has been raised. The results will be amazing.
When running a business, it’s easy to reach a stalemate.
Stirring the pot once in a while prevents people from becoming complacent. Performance and chemistry go hand in hand when it comes to business. If you’re a business owner, you should move your employees around or give them new tasks whether or not their performance is lacking. This not only gives your employees a new found motivation but also helps them gain new skills. It is the leader’s responsibility to support the continued growth and development of your team, provide them the support and self-confidence to stretch, and challenge them to try new things. Leaders must not consider delegation a dumping tool, but a development tool. In the long run, it is simply a method to increase skills, build experiences and develop more capable employees.
Moneyball acts as a brilliant case study to showcase that if a leader wants he can look at obstacles in a completely different way and come up with unconventional solutions. Moreover, it shows how an open minded leader with limited budget valued the importance of technology (data analytics) to assemble a winning team of undervalued talent.
Watch Moneyball. If you’ve seen it, try watching it again. This time however, watch it through a different lens.
Watch it through the lens of your own organization or one you’ve been a part of previously. Do you see hiring managers saying the same sorts of things the Oakland A’s scouts were saying? The same old archaic comments about top talent? Hopefully not however I suspect a number of the comments, along with the style of thinking will be eerily familiar.
Believe that you can win over larger competitors with deep pockets by deploying a thoughtful and cohesive analytic approach.
In the end, in Moneyball it mattered less how much money the Oakland A’s spent than how well they spent it. Similarly, it’s about the quality of one-on-one sales conversations, not the quantity of sales calls. What I liked about the story was just like predictive analytics, all the statistics focused on solving one problem: getting the best trade-off against a precise outcome. In this case, get the most wins with the least money — aka, Return on Investment.
Every problem has a solution. Socrates noted many years back, in order to find the truth, first you have to ask the right questions.
Despite the Oakland A’s disadvantaged revenue situation, Billy Beane took his team from bottom of the ladder to World Series contender in just a few months. By re-evaluating the strategies that produced wins on the field, they built a winning team with only one-third of the salary budget of the New York Yankees. To do this, they had to do more than just play better a better game of ball. They had to transform the playing field completely.
How is your strategy unique and sustainable and what will you do differently than your competitors to support it? Once you figure that out, how will you get your team on board and ensure execution?
If you do everything that everyone else does in business, you are going to lose. The only way to really be ahead is to be different. If you’ve seen the movie and came up with additional observations, I’d love to hear. Feel free to share your thoughts below!
Digital Dandy. Hacker From Heart. Workaholic. Coding Artist. Self-made.