The ‘Moneyball’ Concept

If you’ve seen the film Moneyball but not read the book, then hopefully I can fill in a few blanks because Hollywood has to take a shortcut or two when it attempts to cram 200 pages of content into a two-hour film.

As anyone who has read the my book “Accidental Millionaires – the secret mindset successful business owners share with sporting legends” will know, I love sport as much as I love business. So, a book about the business of sport was always going to be hoovered up by me.

And Moneyball is not just any old sports business book.

It’s reputation has grown so much that “Moneyball” has become such a widely used term that it has its own Wikipedia page. A place in the Oxford English Dictionary beckons.

So, a quick resume of the story in case you’re not familiar:

The Oaklands As are a below average US baseball team managed by an ex-pro called Billy Beane. Unable to compete with the richest clubs in the league they are constantly looking for ways to build a winning team on a limited budget.

Beane hooks up with a Harvard graduate called Paul DePodesta (although the film re-names him Peter Brand) who has created a system to identify baseball players who are under-valued. The sort of statistical analysis he utilises has been around since the 1960s, but has been widely ignored by the conventional thought processes of an industry of scouts trusting their gut instinct and experience.

Beane builds a team of what might be called “misfits” which goes on one of the longest winning runs in baseball history.

In professional sport, the Moneyball concept is widely adopted to the point where the basic statistics used by Podesta are now available to everyone. But the skills at interpreting those statistics are not universal. And those seeking sporting talent are prepared to go further and further afield to find under-valued talent.

But in your world, such statistics are not available. Your decisions about the people you pick for your organisation are driven by basic information on a CV, an interview which might last no more than two hours and perhaps (worse) a sales pitch by a recruitment agent determined to get their candidate into your company.

But of course in any industry, there are candidates who are over-valued by the world and candidates who are under-valued. There are no hard and fast rules on this but here are four key issues you should consider before making the next appointment:

1. Qualifications 

Important right? Well maybe not. Relevant qualifications demonstrate to the world that someone is capable of passing exams on whatever it is that your business does. The impact of that is that there are now thousands of businesses who will now consider them for employment who won’t consider those without the qualifications.

The impact of that of that is that the market value of those people has gone up. But at whose expense? Well, at the expense of those who haven’t passed their exams.

If you did exams and qualifications yourself, think about the day you passed. Did your ability to do your job suddenly leap up? Of course not. If you’re looking for value in your business, why not look for those who have not yet passed those exams or perhaps who have given up trying to pass them?

2. Full-time v part-time

There are some jobs which can’t be done part-time.

But they are far fewer than most business owners will admit to.

The real reason most business owners fail to make part-time positions work in their business is because they fail to plan ahead. Decisions are made on the hoof so discussions need to take place with colleagues there and then.

And yet they seem to be able to work around those same members of staff’s holiday.

In the meantime, there is a whole army of people out there looking for an income that can be earned around family commitments or health issues. There is also the grey market of people with a pension or investment income not quite big enough to retire on who still want to work but not at the expense of doing the things they want to do before they are too old to do them.

Most of these people are ignored by most employers. So they seek out jobs which are at a lower level than their skills and experience would dictate. If you can just organise your business to accommodate their part-time hours you get an exceptional member of your team.

3. Experience v no experience

The reason that experience is over-valued is that most businesses fail to plan. Or they are so pessimistic about their potential that they keep their staff levels at their absolute minimum. Then when a whole load of work comes along, they need staff at short notice. Trainees or apprentices are no good in that situation. They need people who can hit the ground running.

So they hire experience. And in doing so, they often overlook the fact that the candidate they are hiring has gone through 5 jobs in the past 10 years. They don’t pry too hard at the interview about the reasons. They probably don’t want to know. Keep your fingers crossed

As a result, they often take on people with bad habits or over-inflated opinions of their own skills. In short, they over-pay.

On the other hand, someone with no experience maybe straight out of school has no bad habits, is willing to learn and of course is at the bottom of the pay grade.

For it to work, you need to plan ahead (the Summer or early Autumn is the best time to recruit apprentices) and you need a training programme. At my accountancy practice, we take on 3 or 4 trainees every year, but we have a training programme which came 3rd in a national survey of training programmes for school leavers (behind Nestle and McDonalds in case you were wondering).

But you don’t need an award-winning training programme. Just a recruitment model that spreads the net as wide as possible, a list of the skills that your apprentice will need to develop, someone who is willing to teach and a review process which is a lot more regular than once a year

4. Offshore

The last category of potential employees that is widely overlooked are those who are offshore.

If the pandemic taught us anything, it is that many jobs can be done from anywhere. And yes, I can hear you thinking right now that you can’t beat having everybody under one roof with the opportunities to communicate and share knowledge.

But many jobs don’t need that. They just need someone who knows what they are doing, can follow the necessary processes and can get the work done.

These people are not easy to find. Well not if you are only looking in your local area anyway.

But if you’re prepared to go further afield where jobs are a little more scarce, there are lots of people with the right skills just waiting for the right opportunity.

Our favourite location is Durban in South Africa. Unemployment is high, qualifications are very similar to those in the UK, there is only a one hour time difference in Summer (two in Winter) and the accent of those who speak English as their first language is mild compared to our own. Perhaps crucially, salaries are between 50% and 60% of the levels in the UK.

The over-riding theme of all four categories is that you need to be flexible. If you’re not prepared to be flexible, you are fighting with all your competitors over the same dwindling pool of talent.