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Management Strategies

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Spilling the Beans

There's more in common between banking and baseball than you might think.

Ever since he heard Billy Beane, general manager of the Oakland Athletics, at a conference last year, BS&T publishing director Peter McManus has been raving about the speech. At first, I couldn't understand why hearing about the A's success so warmed the cockles of a Yankees fan, but the reason became evident after reading the full story in "Moneyball," by Michael Lewis.

The fact that a team like the A's (2002 payroll: $40 million) can compete with the Yankees (2002 payroll: $126 million) effectively negates the loudest complaint of the Anyone-But-Yankees crowd: that the richest teams buy their victories. As numerous organizations have shown, inside baseball and out, you can have a lot of money and still blow it year after year with paltry results.

So how has Beane done it? The underlying logic is simple. After figuring out exactly what made his organization tick, Beane developed a recruiting and human resources strategy to match. Instead of relying upon the hoary wisdom of scouts, he recruited talent using numerical measures often overlooked by other teams. By doing so, he found talented players who were happy to play for a pittance (in baseball terms).

The following principles helped Beane to build a better roster:

Fans visit the ballpark more often to see winning teams, not winning players. Teams that focus on "star players" end up paying a lot of money for talent. But fan popularity doesn't necessarily translate into scoreboard results or stadium sellouts. That's why the A's focus on building successful teams through its own organization, from which new stars can emerge.

To score runs and win games, batters need to get on base and avoid getting out. Sure, it's better to have a runner on second base than on first. But is it worth it to sacrifice an out to advance the runner? Not for the A's, for whom each player has the potential to homer.

To prevent opponents from scoring, prevent the ball from entering play. Pitchers are too often judged by how many hits they give up, even though that statistic depends on how well the rest of the team performs in the field. Therefore, if you want the best pitchers rather than the luckiest ones, find those who can prevent the ball from entering play in the first place.

Some observers believe Beane's informational advantage will dissipate as other teams begin to imitate the A's success. But even if that's the case, the quality of baseball will have improved for the better. Perhaps Beane should contemplate a move into the financial world. With the surplus of financial experts and technology specialists in the job market, there's no reason why a Billy Beane couldn't give the financial powerhouses a run for their money.

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