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Business Lessons from Moneyball

by Joe Nelson /

It’s hard to believe the calendar has turned to October. For sports fans, that puts baseball front and center because the playoffs are starting. For us as sales leaders, it means the third quarter is over and the pressure is building to make our numbers for the year. Fortunately, the world of sports can offer business lessons for those of us in sales.

 

If you are a sales leader, you’ve probably already identified your superstars for this year. You know who is likely to make quota and who is going to fall behind. At the same time, there may be a wild card out there who can surprise you.

 

From a sports perspective, anytime you think of the playoffs you know, historically, who’s going to be in there. Some of the larger market teams like the Yankees and the Dodgers will be there. At the same time, there are teams on the wild card hunt as well. It’s fitting that (as of this writing) the Oakland A’s actually are on the verge of qualifying for the playoffs. After all, few examples have impacted businesses as much as the Oakland A’s own story – what we now know of as “Moneyball.”

 

 

The movie, and the book it was based on, (Moneyball: The Art of Winning an Unfair Game by Michael Lewis), showed how the Oakland A’s took advantage of rigorous statistical analysis to find better talent and compete against larger markets.

 

At GrowthPlay, we are about the same thing – using rigorous statistical analysis to help sales organizations find better talent and be more competitive in their markets. Here are just a few of the business lessons and connections we see between baseball statistics and sales talent analytics.

 

 

Data Beats Gut Feel Every Time

 

Historically, baseball managers relied a lot on gut feeling, hunches, intuition, and personal hypotheses about what made the prototypical baseball player and how to field a winning team.

 

In sales, we’ve learned a thing or two about hiring based on gut feeling. Rather than using interviews to get at demonstrated skills and relevant experience, many managers use interviews to “get a feel for fit.”

 

A study conducted by the International Personnel Management Association analyzed how well job interviews accurately predict success on the job. The surprising finding was that the typical interview increases your chances of choosing the best candidate by less than two percent. In other words, flipping a coin to choose between two candidates would be only two percent less reliable than basing your decision on an interview.

 

Successful scouts and sales managers know they can improve the quality of their decisions by using objective data and predictive statistics instead of gut feel.

 

 

All Stats Aren’t Equally Predictive

 

Back to baseball. Even when managers and scouts leveraged statistics, they focused on conventional wisdom about what mattered – things like homeruns, batting averages, and stolen bases. For pitchers, it was always wins and losses, strikeouts, and innings pitched. These “superstar stats” like home runs and strikeouts may or may not work if you are like the New York Yankees or the Los Angeles Dodgers that have the money to spend on top notch proven talent. But, if you’re in a small market like the Oakland A’s, you need another way to compete. When the A’s used more modern technologies and ran advanced analytics, they found that the stat that mattered most to them was getting on base. As a result, they were able to look for the talent they needed to even the playing field and successfully compete with some of these bigger market teams.

 

In sales, we sometimes see managers who also want to use analytics to improve their hiring, but who choose the wrong measure. Take personality-based assessments as an example. Tools like these might measure extraversion or how competitive one is. They seem to be relevant and an improvement over gut feel, right? In reality, personality tests show no correlation with sales success. Solid statistical research from many objective sources shows little correlation between any personality factor and any specific job.

 

You might enjoy knowing your sales candidates have self-confidence and energy, but to build a winning team, you need the ability to reliably predict who can develop sales leads and who can close deals. That’s why the creators of GrowthPlay’s Chally Assessment started measuring aptitude for specific sales behaviors. Many, many years ago before anybody else was doing it, we were using advanced statistics to identify what competencies truly differentiate success in specific sales roles.

 

Enjoy the playoffs. And, if you’re leading or recruiting for a professional sales team, check out our whitepaper, Leveraging the Techniques of Moneyball to Put a World-Class Sales Force on the Field.

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