Baseball is not the usual lens for examining organizational change but Michael Lewis’s book Moneyball: The Art of Winning an Unfair Game is a fascinating account of one organization – the Oakland Athletics – unexpectedly challenging its industry’s norms and, in the process, creating a innovation model to inspire the rest of us.
By the late 1990s the A’s were no longer able to afford the salaries of top players and needed to field a roster at budget prices. But continuing to acquire players the usual way was a disaster. By the 2001 season, new general manager Billy Beane acknowledged their mistakes and suddenly refused to play by insiders’ traditional theories of decision making.
Beane knew where baseball’s power – and its problems – lay: with scouts. These are the men who truly decide who get to play, yet Beane felt most scouts had no idea what they were talking about. Their chief sin: generalizing about a player’s most recent performance – thinking that what they saw was typical – and being overly influenced by what they saw. Scouts let themselves be “victimized” by heresay. Their standard operating procedure, the conventional wisdom that governed baseball, was false knowledge.
By doing what they had always done, clubs based important and expensive human resources decisions on very limited and questionable information. Beane knew there was a lot you don’t see when you watch a game: what you do today doesn’t predict what you do tomorrow. And it is easy to miss clues that might predict success or failure. He aspired “to do something better than rendering decisions by gut feeling.” Beane would minimize his club’s risk by finding an alternative to decision-making that relies on subjective opinions.
His first solution was to “rip away from the scouts the power to decide who would be a pro baseball player and who would not” – this would be a senior management, not a lower or middle management, decision. His second, and most important, solution was to develop the A’s capacity for thinking. From now on the A’s would learn from past performance by critically assessing the value of a players’ experience using statistical analysis. Quickly and effectively, Beane established “the Oakland calculus,” an equation showing how corporate success resulted from the organization’s ability to capture and learn from experience.
Beane’s ability to change the A’s was ruthless and brilliantly efficient. Competitive advantage comes from being able to do something others can’t, or aren’t willing to, do. Like all great managers, Beane broke “all the rules of conventional wisdom” (Buckingham and Coffman). In his 2001 book, Weird Ideas that Work, Robert Sutton demonstrated that sudden and massive change could be made within an organization, and that change could be deceptively simple if someone at the top had the will to clash with common beliefs and everyday management standards: to forge a new future leave the past behind, change relationships, change what is thought to be possible.
That’s what Beane did. He was willing to admit his players didn’t have the luxury of coasting on raw talent (and most don’t, it’s just that Beane was willing to admit it). He understood implicitly that if experience could be captured, it could be used. Undervalued players like Scott Hattenberg could think themselves into the big leagues, and keep themselves there, if they invested energy in information gathering and keeping records. The great Ty Cobb’s biographer Al Stump was amazed to discover that even Cobb – for all his natural abilities – had kept extensive journals about every pitcher he faced. Like Hattenberg, Cobb understood the value of intelligence: the more information he had, the better he hit.
So why does baseball continue to refuse to acknowledge its conventional wisdom is flawed? Baseball’s institutional reaction to Beane’s experiment, according to Lewis, reflects that “anti-intellectual resentment is common in all of American life and it has many diverse expressions.” Why, ask authors Jeffrey Pfeffer and Robert Sutton in The Knowing—Doing Gap, don’t best practices “spread like wildfire?” They agree the great mystery of organizational management is why knowledge of what needs to be done frequently fails to result in action or behavior consistent with that knowledge.
The answer, Sutton would acknowledge, is that “it is hard to generate new ideas when practices are used that screen out (and drive out) people with varied ideas and who see things in disparate ways.” Change is difficult because we’re afraid of taking risks; by nature we’re drawn to the familiar and repelled by the unfamiliar. In our haste to be “safe,” we lean on conventional thinking.
Beane learned first hand, as have other innovators before him, that refusing to follow the expected path is not easy. By turning “himself into a human bridge between two warring countries – the fiefdom of Playing Pro Ball and the Republic of Thinking About How to Play Pro Ball,” baseball insiders cast him as a pariah. Beane didn’t care. He, his management team, even his players are “mavericks and misfits” who win because they don’t follow the corporate code, and assiduously avoid, ignore, or reject the “heat of the herd” (Sutton).
What mattered was that the A’s became winners. Beane has demonstrated – for teams from any industry – that investing energy in collecting information, interpreting their record, and developing their capacity for thinking, gives organizations an improved chance of winning.
Not everyone agrees, of course: the Mets – a team notable for spending big bucks on big losers – continue to place their faith in scouts. But there is hope that his innovations are recasting how baseball views its knowledge. Beane’s disciples now lead teams in Toronto, Boston, and Los Angeles. The message is spreading.
“Instead of pouring knowledge into people’s heads, you need to help them grind a new set of eyeglasses so they can see the world in a new way. That involves challenging the implicit assumptions that have shaped the way people in an organization have historically looked at things…techniques that actually get people to experience the implications of an innovation.”
John Seeley Brown, “Research that Reinvents the Corporation,” (Harvard Business Review, 1991)
Michael Lewis, Moneyball: The Art of Winning an Unfair Game (Norton, 2003)
Marcus Buckingham and Curt Coffman, First, Break All the Rules: What the World’s Greatest Managers do Differently (Simon & Shuster, 1999).
Robert Sutton, Weird Ideas that Work: 11 1/2 Practices for Promoting, Managing, and Sustaining Innovation (The Free Press, 2001).
Jeffrey Pfeffer and Robert Sutton, The Knowing—Doing Gap: How Smart Companies Turn Knowledge into Action (Harvard Business School Press, 1999)
(Originally posted in Knowledge Marketing Watch, 16 June 2004)