Moneyball: Billy Beane Does It Again!

Our congratulations to Billy Beane, Bob Melvin and the entire Oakland A’s organization on another successful year! Billy’s focus on “Managing by the Numbers” has paid dividends again this season. One key indicator of success discussed in the best-selling book “Moneyball” is the cost per win. Take a look at how Billy stacks up versus some other perennial baseball powerhouses.

Team 2013 Payroll 2013 Total Wins Cost/Win
NY Yankees $230MM 85 $2.7MM
LA Dodgers $216MM 92 $2.3MM
Philadelphia $160MM 73 $2.2MM
LA Angels $142MM 78 $1.8MM
Boston Red Sox $160MM 97 $1.7MM
Oakland A’s $68MM 96 $708,000
Pitts Pirates $67MM 94 $706,000

Only the Cinderella of the National League, the Pittsburgh Pirates, came close to Oakland in this oh-so-very-important barometer. Looking at it in business terms, the A’s had a simply outstanding ROI in 2013.

Billy’s primary challenge in the off-season will be how to handle two free agent situations. Both Bartolo Colon, a key right handed 41 year old starter and club house guru, and Grant Balfour, the A’s relief specialist and closer, are free to negotiate with all clubs. We are certain that Billy will go about the negotiations in the planned, systematic and deliberate manner that has served him well for years.

Billy Beane and Patrick Armstrong, our VP of Business Development, at our 2012 IAC Event.

Billy’s young stable of superb defensive outfielders will continue to subtract hits and runs from opponents’ bottom lines and are a key differentiator for a team that is known for its excellent defense and consistent pitching. Beane has also successfully avoided the trap of overpaying for big named but aged Designated Hitters. The team simply rotates that job to the man with the hot bat and the one that stacks up best against the opponent that day. All these factors lead one to the conclusion that 2014 should be another successful year in Oakland, California. This exceptional organization continues to prove that managing by the numbers can be a very rewarding exercise.

Billy Beane successfully uses metrics to manage his team. Those in the insurance industry can do much the same to successfully manage their organizations. Our CEO, Dan Epstein, recently penned an article for Leader’s Edge magazine entitled, “What are Wins?”  In this article he outlines strategy to buy wins for an insurance organization by managing by the numbers. On November 5, 2013 ReSource Pro will be hosting an Innovation Advisory Council on Management by Data. Participants will discuss which metrics are needed to measure their success.