Moneyball – don’t judge a book by its movie.
Moneyball by Michael Lewis is an excellent piece of financial journalism, vastly better and more insightful than you would glean from the movie starring Brad Pitt.
The premise of Moneyball is that the Oakland As revolutionized baseball by abandoning heuristics and instead analyzing the data very carefully: and what the data told them was the teams that won baseball games could be assembled more effectively and with much lower payrolls than teams built by buying expensive free-agents.
The Moneyball thesis is the dominant trend of professional sports team management of the past decade, and has had a dramatic impact on MLB (baseball) the NBA (basketball), and now the NHL (hockey is always a bit behind the curve).
However, the thesis – that you should look very carefully at the data is more relevant than ever in virtually every business. We have more data at our disposal than ever before, and much of it will provide insights that overturn old heuristics and make it possible to win more games with smaller budgets. Or at least, that’s what I keep telling myself when I look at my meager budget.