Moneyball

On September 26, 2011, in HR Technology, HR Trends, HRExaminer, Reviews, by John Sumser

Moneyball, the role of rational recruiting in HR

Moneyball: It’s a story about the triumph of rational recruiting over big budget spending.


Seven years ago, this review appeared in the pages of the Electronic Recruiting News. It’s reprinted in honor of the final arrival of the movie. In the intervening years, some elements of the HR and Recruiting world have paid attention and begun to use metrics to figure out hiring problems. It’s not another exercise in debating the Time to Hire or the Cost of a Hire. Rather, the pioneers are figuring out how to think about the organizational improvement that a single hire brings.

Now that Moneyball will be a part of our global consciousness, maybe it’s time to revisit the way we think about people and their contributions.

 


Get your hands on a copy of Moneyball by Michael Lewis and devour it this weekend. It’s a tremendous read. It’s about baseball. More importantly, it’s a story about the triumph of rational recruiting over big budget spending. It’s a breezy look at what happens when conventional wisdom is shed for a more scientific understanding. It’s a meaty source of inspiration as we consider the coming changes in recruiting.

The central character in the story is a fellow named Billy Beane, the general manager of the Oakland As. By rethinking the performance and economic fundamentals of baseball, Beane has been able to consistently deliver nearly the same performance as teams with many times the cash. The trick coupled a deep look at the existing measurements of the game with a view of the whole sport as a marketplace.

Like many industries, baseball is a relatively contained universe. Almost all of the talent is known and quantified. The only way that Beane could prosper was by figuring out how to value the talent differently than the norm. His team (composed of economists, not ball players) ruthlessly analyzed existing information to discover ideas and meanings that were overlooked by the mainstream view.

The central question was “What will be the marginal contribution of player X?” The recruiting strategy asked the question “How do we replace or improve the performance of the team?” not “How do we replace an individual player?” Measurement and a belief in hypothesis testing were the underlying elements of Beane’s success.

The recruiting team evolved a statistical method by which a player could be precisely valued for the contribution he was forecast to make. The core measurements were derivatives of baseball’s standard statistical set. Opportunities for recruitment became the moments during which a particular player could be acquired for a value far under market potential. By learning how to spot undervalued talent and build on the unacknowledged strengths, Beane’s crew singlehandedly redefined the management methods and financial footing for a baseball team.

There’s a great scene in which the traditional recruiters are discussing their picks for an upcoming player draft. Beane methodically undercuts each traditional choice while unveiling his personal list of the right talent. The group he proposes do not vaguely resemble traditional baseball talent. It becomes the core of his winning franchise.

There’s another telling scene in which all 600 players under Beane’s control are listed on one white board. The 1200 players who could possibly be recruited are listed on the other. The recruiting team had some level of statistical insight into each of the names on the lists.

Moneyball is all about questioning your assumptions and replacing them with data. It’s about the power of ruthless talent management on the smallest budget in the competitive playing field. It suggests a range of opportunities for the rest of the Recruiting industry to rethink some basic ideas.

Really, get a copy. It’s inspirational.

 
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