You may know Michael Lewis from having written such popular finance-based books as Flash Boys or The Big Short. The latter was even turned into a feature film about the 2007-2008 housing investment bubble, featuring superstars like Christian Bale and Ryan Gosling. Today, I’m focusing on one of his stories outside the world of high finance though, and it starts with ugly naked men.
A couple of decades ago, Lewis found himself in the presence of several men, who as he described it, “looked horrible when naked.” Despite the fact that he was in the Oakland Athletics clubhouse, surrounded by professional baseball players, he observed that “They just did not look like athletes.” It is the realization that he made in this moment, and the research that followed, that led Lewis to write the hit book Moneyball. You may know the story from the Academy Award-nominated film adaptation starring Brad Pitt. It is a look into how a remarkably successful Major League Baseball team was assembled with a very limited budget.
The basic theme of the story is that they achieved this level of success by using a system of gathering and analyzing data on different players in a way that had not been done before. I am not writing about the intricacies of “sabermetrics” though. I’m writing about three simple concepts that anyone can take away from Michael Lewis’s “Eureka” moment outside of those locker room showers.
Looking like a baseball player does not make someone a baseball player. As Lewis described the players in that locker room, “They were misshapen in every way.” What he really meant was that what he saw did not align with what he would have expected from his preconceived notions of what a professional baseball player’s body should be. For example, society might have us expecting a computer expert to be a young male in his twenties. The finest work I have ever experienced in this area was from a middle-aged woman. I would have missed out on the services of a top-notch professional if I had let stereotypes shape my decision. In the past, I have discussed the sort of steps people take to “look the part” in my industry of financial services (like here). I have also explored why I do not.
Reconsider the “Way it’s always been done.” The history of building professional baseball teams is largely written by professional scouts. The two best tools of these scouts were experience and intuition. The problem with both of these qualitative tools is that they are both vulnerable to personal biases. The success of the new approach to identifying good players relied on extensive use of quantitative data, and math doesn’t lie. In order to put this new data-driven approach to work though, they first had to walk away from the way it had always been done.
Window dressing can be expensive. It is easy to overlook one very important factor about why the “Moneyball” approach to team building was so effective. Just like your business or your household, a Major League Baseball team runs on a budget. Observing ugly naked men in a locker room does not mean that there aren’t good players out there who are also attractive. What they discovered was simply that teams were willing to pay more for a shortstop that looked like a shortstop. The A’s were then able to build their team by paying a fair price for talented players that other teams’ scouts may have overlooked because of their own biases. When you buy a product, choose an investment, or evaluate a service provider....it is worthwhile to ask how much they are offering you to pay for a pretty package. How much more are you willing to pay to satisfy a potentially irrational bias?
One common theme that I approach in writings like this one is the concept of making better decisions. It is a topic that never I never get tired of studying and a personal pursuit that I expect to last a lifetime. While we may all be grateful that we didn’t have to stand in a stinky locker room to have our moment of realization, but I hope we can all benefit from the fact that Michael Lewis once did.