Wednesday, September 21, 2011

Lessons from the Moneyball Movie

The movie Moneyball is being released on Friday, the 23rd of Sept. ... If you are interested in learning about another unique strategic assessment process, see this movie or read the book. ... Portions of this movie were based on Michael Lewis's best seller Moneyball.

Quick Synopsis
The Oakland A's and many professional baseball teams have been using a talent evaluation process called Sabermetrics for many years. The A's management discovered a few unique indicators that most of its implementers did not noticed. They became successful with their Moneyball process, that many teams began to copy their process.

It was good publicity for the A's. However, no good deed goes unpunished.

Since the inception of the Moneyball book, the Oakland A's has not won the World Series . However the Boston Red Sox team who possessed a larger foundation of intelligence gathering resources, economics and logistics, used the Moneyball process as a part of their strategic foundation to win two World Series.

Side note: Since the 2007, the A's have not reached the playoffs.

During the A's successful years, an associate and I had a discussion with a local sport media insider on the Moneyball phenomenon He told us that the A's management should have kept the technicalities behind the process a secret. It was a major blunder to allow Michael Lewis to get an inside look on the team's decision-making process. Even Michael Lewis agreed that his book caused the A's to lose a few opportunities.

In the information economy, successful innovation is regularly imitated. ... The larger and well-resourced competition would usually adapt any successful process or tool quite well. In most cases, they can afford to err. The smaller competitors regularly operated on the margin of minimal to zero error. The outcome is obvious if they blundered. In most cases, they regularly focused on low-risk, low reward ventures.

Ruminations from the Compass Desk
Lesson #1
Never provide your competition the opportunity to use your trade secrets against you.

Lesson #2
In an information economy, every relevant competitor has a similar tool set. Obtaining the exotic skill and the strategic experience to master the tool is always the challenge. Keeping it as a secret is the other challenge.

Lesson #3
It is nice to cheer for the underdog. However, the majority of the masses only remember the grand winner, not the losers.

Lesson #4
The knowledge of one's grand terrain and the resourcefulness of each contending competitor usually enabled the "persevering" strategist to succeed on the long run. (Read the last quote from Chapter 10 of the Art of War.)

Lesson #5a
No specific process is perfect. The process evolves due to terrain changes

Lesson #5b
It is the perfection of the process execution that counts.

Lesson #5c
Regardless of the process or strategy, the attribute of talent and the accessibility of resources usually prevail in extreme situations.

Lesson #5d
In a predictable (and even parity-based) situation, the strategic experience of the chief decision maker becomes relevant.

Lesson #6
The knowledge of identifying the underdog and the favored is quite important in all strategic situations.

Lesson #7
When the scarcity of resources becomes tangible, the competitive strategists usually spend more time assessing the specifics.

Lesson #8
Connecting the specifics to the grand overview usually means that one has a understanding of the Big Tangible Picture (BTP).

Lesson #9a
One's understanding of the Big Tangible Picture is usually proportional to the implementation of their strategic advantage (strategic power)

Lesson #9b

Update: Here are some interesting reviews for this film: #1; #2; #3; #4; #5 # 6 and #7 .

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