Moneyball for Leadership Teams: Winning with Evidence-Based Insights

• June 22, 2018

Teams are the core work group in any business. Yet few of us stop to think about their impact on the bottom-line. Or how they actually perform relative to their full potential. Are teams falling short? How large is the gap between actual team performance and full team potential? And, how might team shortcomings be holding back business performance? Is there new and little-known information on teams that will yield your firm a competitive advantage?

My name is Sean Gallagher and together we’ll be discovering the answers to these questions on the C-Suite Network in this and future articles.

I’m an evidence-based team coach. I help leadership teams and other organizational teams thrive. I’m a new member of the C-Suite Advisors. Like you, I’ve been a member of great, inspiring teams throughout my career. And I’ve also been on a few painful, ineffective, and depressing teams. It’s pretty obvious which of those two “team extremes” works better and works happier. Most teams are somewhere along those two extremes — they’re not terrible or amazing, they’re stuck in the middle. As a C-Suite Advisor, my purpose is to help you create effective teams, teams that work at their full potential, using the best research available (there’s lots of data out there) and adding context from my personal experience.

This is the first of many articles you can expect from me. I’ll offer actionable, evidence-based advice to boost your business performance. If you apply and tailor this advice to your teams, you’ll be creating greater value, your employees will boost their skills and creativity, there’ll be more fun on the job, and all your stakeholders will win.

What does “evidence-based” mean?

Moneyball: The Art of Winning an Unfair Game is the 2003 book by Michael Lewis. It told the story of Major League Baseball’s (MLB) Oakland Athletics and its general manager, Billy Beane. It was a New York Times #1 Best Seller and the basis for a successful movie of the same name. Lewis started researching the book with a simple question in mind: How did the Oakland A’s, a motley collection of baseball misfits and utility players with the second-lowest payroll in baseball, playing in a relatively small market, win so many games against teams with much, much bigger player payrolls, fan bases, and available resources?

According to reviewers, it’s a well-researched book that’s a pleasure to read. And the lessons revealed go beyond baseball.

“This delightfully written, lesson-laden book deserves a place of its own in the Baseball Hall of Fame.” – Forbes

“Moneyball is the best business book Lewis has written. It may be the best business book anyone has written.” – Mark Gerson, Weekly Standard

“Is worth reading even if you couldn’t care less for baseball.” – N. Tuzovon, Amazon.com customer review, October 29, 2014

In a radio interview, Lewis said this about the A’s and general manager Billy Beane:

“It was a losing team when he took over in 1997, and it’s gotten better every year under his stewardship. And Billy Beane came into the organization and embraced the idea that there was such a thing as new knowledge in baseball, and you could research baseball and find out interesting things about it by researching it, and that the way baseball teams were conventionally run had all sorts of inefficiencies in it that could be exploited for profit. And so, you’ve got, essentially, one team that’s living purely by its wits and making a good run of it.”

In short, it’s a book about the team’s systematic, evidence-based approach to creating a baseball team with a competitive advantage. Their increase in success occurred despite Oakland’s meager financial resources. Perhaps you, too, find yourself leading a firm with scarce resources, especially in comparison to the bigger players in your industry?

The key insight in Moneyball is that the wisdom of baseball insiders was subjective, flawed and circular. Statistics such as stolen bases, runs batted in, and batting averages, are holdovers from the 19th-century. Lewis argues that Oakland’s innovation was evidence-based metrics of player productive output. The result was the fielding of a team better able to compete (and outcompete, actually) against bigger-market, richer MLB rivals.

New statistical analysis had shown that on-base percentage and slugging percentage were undervalued and actually better indicators of offensive success. The A’s believed that these qualities were cheaper to obtain on the open market than traditional metrics such as speed and contact, mostly because other teams hadn’t deeply explored these alternative but highly-relevant performance metrics. These observations re-imagined player scouting and hiring and flew in the face of conventional wisdom. They also created untapped opportunities for the savvy A’s and Billy Beane.

Moneyball tells the story of challenging assumptions and strategies about what factors produced wins on the field. With this unorthodox approach (and re-imagined metrics/KPIs), the 2002 Athletics competed successfully with the likes of the New York Yankees. This was despite the Yankee’s spending three times the amount the A’s spent on player salaries. In the end, a solid team built with the right, re-imagined, and data-driven metrics in mind beat a bunch of high-salaried, big name superstars. Financial constraints forced Oakland to find players underrated by the market — their new metrics allowed them to play a game only they were playing, which is one great way to compete and win. It also brought the A’s to the playoffs in 2002 and 2003.

Evidence-based decision-making means making decisions, wherever possible, based on provable facts. It means finding research that uses the scientific method to observe, experiment, and winnow truth from delusion, finding what behaviors and indicators lead to desired outcomes (superior profitability). It means NOT accepting the conventional wisdom and following others when there is a better way. Creating a competitive advantage mean, by definition, doing things differently.

Anecdotes are interesting and can be used to illustrate what the research tells us as true. But we must view them critically unless we have clear supporting evidence. I may have been on a successful team, but that doesn’t mean I’m an expert on team design. You may have been in a series of wasteful weekly meetings, but that doesn’t denote that weekly meetings are inherently wasteful.

Conventional wisdom on leadership and other teams is subjective and flawed. That’s good news for you because it creates an opportunity to out compete your rivals. Like Billy Beane, you’ll need to challenge the strategies and assumptions about what factors creates value in your firm. There is new and little-know information on teams that will yield a competitive advantage for you and your business. I look forward to sharing with you evidence-based insights to create brilliant, effective teams.

Sean Gallagher is a business team coach. He lives in Boston and covers the world. Reach him at Sean@InfluenceSuccess.com.