"Moneyball" works in the big leagues, but does it work in a business environment?
A trend that is growing increasingly popular for sports franchises is the "Moneyball" concept, where general managers and owners are putting more stress on empirical data and the bottom line than emotional feelings and personal thoughts on the situation. With this line of thinking, some clubs have found success by seeking out solutions that were undervalued by their opponents. It's a concept that primarily relies on identifying market inefficiencies.
However, with companies going to hard data and number crunching, are we moving too far away from our business roots? Michael Schrage of the Harvard Business Review looked into that very question.
According to the article, the overarching trend is that sports franchises – and companies – are no longer willing to reward for past performance. Instead, many have shifted to a "what can you do for me now mindset," in an attempt to avoid paying too much for an individual whose best years are behind them.
"Future potential matters (much) more than past performance. That's the new quantitative consensus reshaping professional sports worldwide," the article reads. "After looking hard at the numbers and algorithms, the smartest — and richest — general managers and franchises have made up their collective minds: They're not paying a premium for yesterday."
The fear, though, is that this line of thinking discourages loyalty and trust in the business sector. In some cases loyalty does pay dividends through intangible elements like leadership and the ability to inspire. However, such qualities are hard to track.
Knowing when to rely on the hard data and when to fall back on trust is difficult for any business. The best way to find the right balance and achieve success is to work with an HR consulting company that can help you find the right solutions.