I just finished reading the book Moneyball: The Art of Winning an Unfair Game, and it’s a thought-provoking book. The book talks about how a baseball team with no money, Oakland A’s, could win so many games in the Big League. In a game where the rich teams had 4 times the amount of money available to the poor teams, only the rich teams could afford the best players and therefore won more games. But Oakland A’s was an anomaly; it had little money but won a lot of games. How come?
Here is how they did it: Oakland A’s found inefficiencies in the baseball market and tap into them. That allowed them to hire good players overlooked by other teams. Since the players were overlooked by other teams, they were cheap. And since they were good, they contributed a lot to the team’s performance.
How could they find such inefficiencies? There were two things they did:
- They questioned the conventional wisdom
They took a skeptical look at the conventional wisdom in baseball about what contributed to winning. Through rigorous research done by them and some other parties, they found that the factors that actually contribute to winning is different from what most people think.
- They measure things differently
Since they found different contributing factors to winning, they measured things differently. This is why they found inefficiencies in the market overlooked by other teams.
These give me some ideas to help us win “games”, especially the unfair ones, in life. Most likely you will find such games in your job, but you might also find them in other occassions.
Here are 8 steps to winning life’s unfair games:
1. Know the end result you want
Before anything else, you should know exactly what you want. This requires thought. In Oakland A’s case, their goal was to win as many games as possible, not to retain their stars. This was because they found that the fans would come to games when the team was winning, regardless of whether or not they had their stars with them. They then aligned their strategies with this goal. They often couldn’t afford to retain their stars, but they could find ways to win more games.
2. Ask yourself: what is the conventional wisdom?
Now you should ask yourself what the conventional wisdom says about how to achieve your goal. List them. This is what most people think you should do to achieve your goal, and this is what the majority of people are doing.
3. Question the conventional wisdom
This is not easy, but this is how you can find opportunities. Your best weapon is why. By asking why you may find that:
- The conventional wisdom is unreasonable
There is simply no evidence that it works. Most likely it became conventional wisdom because some people said so. In baseball for example, the way people count things can be traced back to a different game: cricket. Because the man who improved the box score in 1859 was familiar with cricket, he brought the ideas to baseball without thinking about whether or not that was the best way to count things in baseball.
- The conventional wisdom is not the best way to achieve the goal
The conventional wisdom might contribute something to achieve the goal, but there could be other more significant factors that are overlooked by other people.
4. Find the real contributing factors to achieving your goal
The goal of questioning the conventional wisdom is to find the real contributing factors to achieving your goal. The more different they are from the conventional wisdom, the bigger the opportunities you have. To avoid guessing, it will be better if you can find data to support your ideas. If that’s not possible, at least make sure that you use clear logic.
5. Determine the kind of stats you need
After you find some ideas in step 4, think about the kind of stats you need to test your assumptions and help you do things correctly. For now, don’t think about how to get the stats; you will worry about that later. Just think about the ideal stats you need.
6. Find the measurement tools
The next step is to find the tools you need to give the stats in step 5. Sometimes the tools are available, and sometimes they aren’t. If you can’t find the tools that exactly meet your needs, just find the best possible ones.
7. Measure what you do
The next obvious step is to measure what you do when you apply your ideas. As I said in step 5, measurement is important to make sure that your assumptions are correct and you do things correctly.
8. Adjust yourself accordingly
The measurement gives you the feedback you need to adjust your actions. This way you can do the right things better over time.
Applying these ideas is not easy. It’s far easier to just see what other people do and follow the crowd. But following the crowd is a sure way to be in the majority. If you want to be above the majority, you should see things differently.