Friday, October 7, 2011

"Data guys" More Important In Business Due To "Moneyball"

See When Data Guys Triumph by CADE MASSEY and BOB TEDESCHI, NY Times business section, 10-2-11.

Oakland A's general manager Billy Beane and author Bill James are entrepreneurs who created a whole new way of running baseball teams based on statistics and this creative spirit is starting to have an impact in the business world.

The Nobel prize winning physicist Richard Feynman said that "science is the belief in the ignorance of the experts." By challenging the experts in baseball, Beane and James were true scientists, asking questions and looking at data in new ways. Excerpts:
"JOSHUA MILBERG has plenty of business cred: an M.B.A. from Yale, experience in the mayor’s office in Chicago, a job as a vice president for an energy consulting firm. But all of that, Mr. Milberg says, matters less than his reputation as “the data guy” — someone who can offer insights through statistical analysis. And for that, he and a growing number of young executives can credit none other than “Moneyball: The Art of Winning an Unfair Game,” by Michael Lewis."

The book "...examines how the Oakland Athletics achieved an amazing winning streak while having the smallest player payroll in Major League Baseball. (Short answer: creative use of data.)

These managers are savvier with data and more welcomed in business circles in part because of the book."

"At its heart, of course, “Moneyball” isn’t about baseball. It’s not even about statistics. Rather, it’s about challenging conventional wisdom with data."

"This evangelism has created opportunities for the analytically minded."

The article calls this work "creative empiricism."
"But “Moneyball” dramatized the principles behind these forces: a reliance on data to exploit inefficiencies, allocate resources and challenge conventional wisdom — and thus broadened their appeal.

“Moneyball” traces Billy Beane’s use of unorthodox analytics to the work of Bill James. Working as a baseball outsider, Mr. James began self-publishing his analysis and commentary in 1977 and built a passionate following."

"Once people see the value of a batter’s O.P.S. — on-base plus slugging percentage, a key measure in the book — it’s a short step to applying similar principles in their own organizations."

"Generation Moneyball isn’t yet in charge. But as the Nobel laureate Max Planck once said, “A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.”"

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