As winter gives way to spring, the MLB season kicks off, and 30 teams begin the year with a chance to win it all.
As the season gets underway, we are reminded of the undying wisdom of America’s pastime, and how it can help guide us in our own small business endeavors.
Here are 5 Lessons We Can Learn from Baseball:
1. More money does not equal more success
Gone are the days of buying all the free agents and coasting to a World Series championship, a la the Yankees’ strategy of the ‘90s. It just doesn’t seem to work that way anymore. The Los Angeles Dodgers, for example, have had one of the highest payrolls the last several years, and yet can’t seem to even get to the World Series, let alone win it. In contrast, last year’s World Series included two teams – the Kansas City Royals and the New York Mets – with payrolls right around the MLB median.
In running your business, there is a persistent perception that a business could do better only if it had more capital and spent more money. False. Rather, excellence, efficiency, flexibility, innovation, and creativity are much more important. As a simple example, I just read an average chicken today is about six pounds versus three pounds in 1950. However, it takes about one week to grow a chicken one pound compared to three weeks in 1950. Thus it takes half the time to grow twice as big a chicken than in 1950.
2. Look for market inefficiencies
The concept of Moneyball is to find things that everyone else undervalues and invest in those things, so your dollars go further than your competitor’s. During the era in which Billy Beane first implemented these ideas, on-base percentage was undervalued. Nowadays, advanced statistics are showing that perhaps defense is undervalued. The market changes. Look for what’s undervalued. Look for opportunities that your competitors aren’t paying attention to.
Sharing sites like Airbnb, Amazon, and Uber are revolutionizing markets. They are simply taking expensive and more complicated efforts out of the system.
3. Develop a “good eye”
A batter with a good eye doesn’t swing at pitches out of the strike zone. He waits for a pitch that’s in his wheelhouse before attacking. As a result, he makes better contact more consistently.
Business is the same. There are opportunities everywhere, but if you chase every single one, you’re bound to get out of whack and whiff. Using analytical tools to take advantage of opportunities and avoid challenges can be highly productive. For example, increasing internet sales, rather than striking out with stagnant brick and mortar customers, has helped many of our clients.
4. Batting order isn’t overwhelmingly important
One of the benefits of money ball is that it brought more advanced statistics into the game. One surprising discovery was that the batting order of a team’s lineup doesn’t have a huge impact on how many runs they are projected to score. Considering how hard people agonize over whose hitting leadoff, whether so-and-so is a number-three hitter or a cleanup hitter, and so forth, this is surprising. And yet math shows it to be true. The lesson?
Stop stressing out so much about which idea you pursue next. At the end of the day, as long as you have a bunch of good ideas, then the order in which you pursue them won’t make a big impact one way or another on your success. Take a moment to strategize and then get out there and start taking action. We agonize so long over many decisions that they never get tried instead of testing a variety of alternatives
5. There’s always another day
Perhaps one of the most important lessons of all in the 162-game season is that tomorrow is always an opportunity to redeem yourself. It’s a long season, and if players agonized over past failures, they wouldn’t even make it to the All-Star break without having a nervous breakdown. Besides, the more at-bats, the more the chance for hits.