BUS 401-02

Isabelle Norberg
AN OPPORTUNITY IN THE MARKET FOR
BASEBALL PLAYERS
Why did this opportunity
exist for them?
Oakland A's & Billy Beane was
thinking outside the box, since
they could not run a team like the
Yankees or like most other clubs
They were challenging traditional
norms and embracing change
Billy Beane was not afraid to do
something unconventional. He
had a different mental
representation than others.
They were aware of biases and
their impact
Why had no other teams
learned about it?
They didn't share the mental
representations with Beane, and
thus they overlook the same
attractive opportunities, which
happened when they didn't see
this as an attractive opportunity
Cognitive biases, such as pattern-
recognition bias and stability bias
Old club scouts were fixed on
their ways of who to look at for
recruiting
How could apparently
false beliefs persist?
The amount of money each club
can budget
A fear of trying something new
and unique in baseball
Pattern-recognition bias, which
meant that they believed that
management was supposed to be
conducted by example
Action-oriented bias, with an
overconfidence that the old way
of doing things was the best
THE IMPLEMENTATION OF THE NEW
APPROACH
PROBLEMS WITH THE APPROACH
Hard to get alignment from every corner
of the organization, where the vision is
demonstrated from top to bottom
Hard to decide which data to evaluate
the players on
Data-driven decisions can be come off as
heartless, especially to the casual
observer
WHY BILLY BEANE COULD DO IT
He used objective, advanced data to make
his baseball hires
He focused not just on data, but on the
right data, which meant better decisions
He was aware of biases and was not afraid
to make adjustments to the organization
with an outside perspective
He set up a program where they evaluated
the players on the same metrics every year
WHAT THE OAKLAND A'S SHOULD DO IF
OTHER TEAMS ARE IMITATING
What happened?
After the Athletics’ 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 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. So others could easily imitate the Oakland A's process.

How should Oakland have acted?

When building your strategic plan, it's important to keep this in mind. Your success will attract imitators, and
you need to 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.

In Oakland's case they could have claimed their data-driven process as their own, and maybe even applied
for a patent, to be able to sell the computer program to other teams. In this way, they would have gained an
ecenomic profit, instead of just see other teams imitating them.
DOES SIMILAR OPPORTUNITIES IN
OTHER INDUSTRIES EXIST?
YES!
THE OAKLAND A’S QUEST TO GARNER THE
MOST VALUE FOR THEIR MONEY IS
SOMETHING EVERY BUSINESS CAN RELATE TO
- AND A LOT OF BUSINESSES ARE DOING THIS.
Making smart decisions is critical in business, yet so
often, many uses techniques that are based on bunked or
non-existent science when recruiting. Evaluating people
based on how they can help your company perform
better and trying to take the emotion and those
considerations that don’t matter out of the decision
making process. As Beane iterated several times, there
isn’t any business that can’t benefit from focusing on
what is very truly the root of their success.
AN INDUSTRY EXAMPLE
In sales, you may find yourself in a similar position to Billy
Beane. The use of data-driven techniques can be used by:
Comparing your performance with competitor's
Comparing your price with competitor's
Help personalize sales messaging
Decide which offers to promote
Identify loyal customers
What has to be taken into consideration is that the
measurements need to be accurate and include the whole
industry, so that you don't experience selection bias where
you don't include the whole population that you care about
and want to measure. Only comparing some metrics will
show a skewed distribution and give you the wrong insights.