Magazine article Risk Management

Brad Pitt as Risk Manager

Magazine article Risk Management

Brad Pitt as Risk Manager

Article excerpt

Moneyball revolutionized baseball. The protagonist, Oakland A's general manager Billy Beane, shattered the foundations of team strategy. Through data devised by his crew of number-crunching stat geeks, Beane discovered that certain players, namely those with high batting averages, were overvalued. Conversely, players with high on-base percentages (a statistic that accounts for getting on base by hits and walks) were undervalued. This knowledge became a major competitive advantage for Oakland. Beane could sign productive players no other team wanted on the cheap.

The impetus for this strategic shift was money. Other teams were spending more than $100 million on payroll costs alone. Baseball had become big business. But Oakland was poor. So basing the team's strategy solely on the gut-feel of scouts, as had been done traditionally, would be reckless. With the stakes so high, how could Beane not use this new mountain of data to inform decision making? Tens of millions of dollars were on the line--not to mention a World Series. …

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