Moneyball: Lessons for Business

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At its core, the book Moneyball, to me, is about leadership and overcoming resistance to change to create a sustainable competitive advantage. In Moneyball a new General Manager challenges a traditional industry with a new paradigm. He successfully deals with the resulting resistance from the more tradition oriented employees. In the case of the Oakland A's this has led to a substantial competitive advantage through lower costs (their payroll goes down) and improved output (the have a higher percentage of win’s) which leads to an increase in return (average cost of a run is among the lowest in baseball). This represents a major learning to me, it means that I need to be prepared to challenge the conventional wisdom by being innovative in a traditional company or industry. At the same time it is not enough to be just innovative, you need to be the innovation champion and overcome resistance. Baseball particularly seemed like a very traditional environment which allowed Billie Bean’s radical innovation to lead to significant competitive advantage. His success is achieved through three major achievements:

1) He uses innovation to create a different perspective on a particular market. 2) He creates competitive advantage by using his innovation to pick his resources in a different way. 3) He further enhances his advantage by building organizational capability around the new approach he has created.

Question 1: What is the best way to think “out of the box” in a particular situation, business or market to come up with the innovation that will change everything. It was my belief that a different perspective on a particular situation can be created by using imagination, intuition and creativity on top of accepted wisdom. In Moneyball, a new breakthrough approach is achieved through pure technology and in detail statistical analysis. Billy Bean uses the power of statistics to uncover relationships in individual and organizational performance. At the same...
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