What Moneyball Can Teach Us About Lean
Posted on January 10, 2012 | in Baseball, Employee Knowledge, Error-Proofing, Lean Tools, Lean Wastes, New Ideas, Small Business, Sports, Teamwork | by Chad Walters
The book Moneyball by Michael Lewis was a paradigm-shifting revelation to the way baseball front offices evaluated and valued players – greater focus on specific statistics (on-base percentage) and valuing the concept of “not making outs,” among other things. Not only did it change the way front offices operated, but it also brought the essentially-foreign concept of efficiency to a boys’ game. The Oakland Athletics, in an effort to compete with the big spenders while on a shoestring budget themselves, employed statistical analysis with baseball players to take advantages of inefficiencies in the game. The book was great.
In 2011 Moneyball was made into a movie starring Brad Pitt as Oakland Athletics general manager Billy Beane and Jonah Hill as assistant general manager Peter Brand (the name chosen by the writers when the real assistant general manager at the time Paul DePodesta wouldn’t permit his name to be used in the movie). The movie was great, but really only if you read the book first.
Lean practitioners who were also sports fans loved the entire concept of the story – it wasn’t just about doing things differently, but doing things smarter and better and bringing a cerebral approach to the game they loved. It was about change management in the face of adversity, only it happened to be in the industry of baseball.
Moneyball the movie comes out on DVD and Blu-Ray today.
So certainly Moneyball (the book AND the movie) can teach us a thing or two about lean and continuous improvement, right?
- Change management has to start at the top. “How baseball players are evaluated” was the change that occurred with the Athletics. They (like all other major league teams) had almost solely leaned upon scouts to evaluate players, because “that’s the way they had always been doing it.” Billy Beane wanted to change the approach to include statistical analysis, and because he oversaw the team’s scouting department it was his call. Contrast that with Peter Brand, who before being hired by Billy was a low-level advisor to then-Cleveland Indians general manager Mark Shapiro. Peter had no pull in the office, despite possessing superior education and mathematical analysis skills, so he would not have been able to influence such a monumental philosophical change.
- “Adapt or die.” While this is quite the fatalistic view on change management, it was the philosophy Billy and the Athletics had to adopt. They had a payroll that was less than 1/3 that of the New York Yankees, so the Athletics had to go “bargain hunting” for undervalued players. In order for them to have a chance to compete with teams like the Yankees they had to be smarter with their dollars. In today’s economy, small businesses are forced to cut corners and be penny-pinchers. Becoming more efficient to compete with the big boys has never been more critical.
- “Trust the process.” Billy and Peter believed in this new philosophy, and their faith was certainly tested when the team started the season poorly. They were aware that the successes would take time to arrive, and multiple changes to the process (and the process users) would occur. For example…
- The organization’s goals and activities must be in alignment. If you have four horses pulling a wagon, and three are pulling forward while the fourth is laying down there will be problems with moving forward. The Athletics scouting department (including lead scout Grady Fuson) were fundamentally opposed to the idea of focusing on statistics instead of what they saw from players with their own eyes. The tension between the two philosophies became so heated that (according to the movie) Billy and Grady had an altercation that led to Grady getting fired. (Adapt or die, indeed.) While scary, it is important for all process users to buy into the change. (29 years of scouting experience versus a computer!)
- “So what’s our problem?” One of the favorite lean tools is the “Five Whys.” When we encounter a problem, we should follow up our analysis of the cause by asking “why” five times. Billy did the same thing, continually asking “So what’s our problem?” to get down to the root organizational problem.
“We aren’t winning.”
“So what’s our problem?”
“We aren’t scoring enough runs.”
“So what’s our problem?”
“We aren’t getting enough guys on base.”
“So what’s our problem?”
“We are making too many outs?”
- The ultimate poka-yoke. Billy and Peter had specifically signed former catcher Scott Hatteberg to play first base, yet manager Art Howe refused to play him, instead opting for young first baseman Carlos Pena. Art Howe had not bought into the new philosophy. “Poka-yoke” is a Japanese term for “error-proofing” and making sure it was impossible for a certain type of error to occur. How could Billy make absolutely sure that Art would start Hatteberg? Just get rid of all other first basemen on the roster! Billy traded Pena to the Detroit Tigers, Hatteberg became the new first baseman, and…
- Belief in the process and persevering can bring great rewards. …the Athletics set a record by winning 20 straight games on their way to winning the American League West division.
- “The first guy through the wall gets bloody.” Billy was indeed the first guy to break down the wall, but the paradigm shift was on. In fact, the on-field success of the Athletics despite the miniscule payroll was so revolutionary that Billy Beane was offered the role of general manager of the Boston Red Sox (one of those teams with a huge payroll but inability to win the World Series). He turned the job down to stay with the Athletics, but the Red Sox won the World Series two years later with general manager Theo Epstein at the helm, using the same philosophies introduced by Billy and the Athletics.
Moneyball is the ultimate triumphant change management story, and we all aspire to such a heroic chain of events. That said, it doesn’t take a huge revolution in your small business or front office to make a large difference – just tweak a few philosophies to make things better.