Categories Articles, Sales and Marketing

Moneyball: The Art of Winning an Unfair Game is regarded as one of the seminal works about baseball. The book, written by Michael Lewis, focused on innovative general manager Billy Beane of the Oakland Athletics, who turned the sport on its head by introducing outside-of-the-box thinking that focused heavily on data and advanced analytics to identify the best and most valuable players, instead of traditional beliefs and biases held by talent scouts. This allowed his small-market and tightly budgeted team to compete with the New York Yankees, the Boston Red Sox and the other deep-pocketed powerhouses of Major League Baseball.

The book was then adapted into a hit movie starring Brad Pitt (playing Beane). If the business, sales and management industries hadn’t fallen all over the findings espoused in the book, the mainstream Hollywood movie certainly opened more eyes. Many CEOs and sales managers rushed to watch the movie or read the book, looking for critical insights that bridged the baseball diamond and the board room. All of a sudden, sales analytics and data-driven sales management was in vogue.

We here at InsightSquared are particularly big believers in the lessons of Moneyball. Many of the lessons in the book drove our founding and continue to dictate the way we do things. Additionally, we try to impress upon our clients and customers the importance of efficiency and outside-the-box thinking, two of the prevalent themes in Moneyball. Here are five of our favorite lessons from Moneyball – both the book and the movie – that inspire us to this day.

“A good way to drive innovation is to be clear about what you want to accomplish and to not get stuck in the rut of doing things the way they’ve always been done.”

Traditionally, Business Intelligence and sales analytics largely resided in the realm of expensive, legacy platforms led by powerhouse companies such as IBM and SAP. This left small- and mid-sized businesses out of the affordability and accessibility loop, putting them at a severe competitive disadvantage. When InsightSquared was formed, our founders decided that one of their primary goals was to disrupt the existing Business Intelligence field and level the playing field to give SMBs a fighting chance. They were clear about wanting to accomplish this and sought to challenge the traditional, legacy BI platforms with a new, innovative way of doing things, not to mention a cutting-edge analytics and reporting product. Risks have to be taken in order to get out of a rut and accomplish great things. Just because your company has never invested in a sales reporting and analytics product before isn’t a good reason for not doing so today.

“Business is like baseball in that there are finite, measurable business parameters that make great candidates to apply analytics to and derive insights not readily apparent.”

Peter Drucker said it best: “If you can’t measure it, you can’t manage it.” Just like in baseball, business and sales industries feature many built-in areas of analysis that could produce great insights – if only sales managers were looking for them. For example, practically every sales organization tracks the number of activities that they expect their reps to perform on a daily, weekly and quarterly basis. While these raw volume figures (dials, emails, connects) can provide interesting findings, they don’t necessarily produce actionable insights. Instead, look at another measurable business parameter like Activity Efficiency Ratios – how many dials lead to demos that lead to deals. These insights might not be readily apparent from looking at raw activity metrics, but a deeper dive could unearth a wealth of useful information.

“If gross miscalculations of a person’s value could occur on a baseball field – before a live audience of 30 thousand and a television audience of millions more – what did that say about the measurement of performance in other lines of work? If professional baseball players could be over- or undervalued, who couldn’t?”

Sales reps, for starters. Beane found that players who were considered to be productive stars were actually inefficient laggards. Similarly, some of your reps might look like the best salespeople on the planet – with robust activity figures and strong pipelines. The truth is that these reps could be simply gaming the system, logging activity numbers that they know will please their manager, sandbagging opportunities or listening with unrealistic “happy ears,” instead of stringently qualifying all prospects to make sure they are good fits. Track the right key sales performance metrics to ensure that your reps are not being over- or undervalued.

“Your goal shouldn’t be to buy players, your goal should be to buy wins. And in order to buy wins, you need to buy runs.”

This goes out to all the CEOs who don’t care about the nitty-gritty details that go into buying players (the best sales reps) or runs (leads that convert into deals) – they just care about wins (revenue). It is critical for CEOs to find the best people to run the down-in-the-trenches work for each team. For instance, many Marketing VPs tend to focus on the things that matter to them – creating content, generating demand, qualifying leads – and presenting this information to their CEO. Instead of delving into the specifics of creating runs, talk about how your marketing work is directly producing wins. Focus on metrics such as how much of the pipeline (in dollar value)  is directly sourced to leads and how many leads (ROI) come from each source. Focusing on the right Key Performance Indicators – like wins (revenue) – should be the common goal for the CEO and the managers of each team.

“You’re not solving the problem. You’re not even looking at the problem!”

Ultimately, this quote should drive all business decisions. Imperfect sales organizations can’t begin to rectify their (numerous) issues unless they can clearly define these problems in the first place. If your sales teams are struggling, look at the sales funnel for each rep to identify specific areas of weakness in each rep’s sales process. If your sales forecasts are regularly proving to be grossly inaccurate, examine your current and historical pipelines. Perhaps there are bloated opportunities that are unlikely to close, due to age or size, yet are being treated with the same likelihood of closing as the rest of your opportunities. Only when you look for and find the problem can you begin to solve it.

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