Moneyballing the Non-Profit and Social Enterprise Sectors

Posted on Posted in We Think, What Do You Think?

Have you ever had the experience of having a conversation that was all too familiar in terms of the substance, but also fundamentally wrong or off the mark? Perhaps it was a discussion about the performance of a sports team, the day by day analysis leading up to an election, or a meeting at work. Regardless of the topic, what was the outcome? Did the familiar conversation continue to play out in an all too familiar loop? Did anyone attempt to disrupt the discussion by attempting to identify the issue(s)? More importantly, did anyone listen? Did anything change?

 

In the later nineties, the general manager from the Oakland A’s, Billie Beane, found himself struggling to accept the process of evaluating talent and performance in major league baseball. As a high school phenomenon, he had experienced the recruit and evaluation process of talent first hand. In five years of professional baseball, Billy played for four major league teams and eventually quit to become a scout. Somehow, somewhere, there was a disconnect between the assessment of his talent and the promises made to him with the way in which his career unravelled.

 

In addition to Billy Beane’s struggle with how the game of baseball was assessed, three other factors created the conditions to facilitate experimenting with a different approach to baseball management. A change in team ownership that slashed the payroll budget cemented that the status quo was no longer a viable option. The steady increase in player data permitted for a different approach to looking at the game of baseball, a statistical and analytical approach. The acquisition of an economist from Harvard provided the A’s front office with the capacity to undertake a statistical approach.

 

Between 2000 and 2003, the Oakland A’s qualified for the playoffs with a fraction of the budget of their divisional counterparts. How was this accomplished? By rejecting the status quo, questioning assumptions and testing hypotheses in a continual way. The success of this disruptive experiment can been seen with the results 2002 divisional results for the American League West (see below). The inverse relationship between team payroll budgets with the number of games won provides a strong indication that a team needn’t spend their wait to success. With the right metrics, a team can moneyball the game.

 

TeamWinsLossesPayroll
Oakland Athletics

10359$41,942,665
Anaheim Angels9963$62,757,041
Seattle Mariners9369$86,084,710
Texas Rangers7290$106,915,180

 

This approach has gained some traction outside of professional sports. Jennifer Pahlka, the Executive Director of Code for America in the US, works with the technology sector and municipal governments to ‘moneyball government’ using a similar approach to the one Billy Beane used in the late nineties. To learn more, check out Jen Pahlka’s 7 minute talk here.
Looking at the diverse and valuable work that the non-profit and social enterprise sectors do, I think it is time to moneyball these sectors. In fact, I think some organizations do this very well already. The conditions for disruption with the Oakland A’s as well as Code for America are not only similar, they are likely applicable to the non-profit and social enterprise sectors – budget, availability of relevant and timely data, capacity to wrangle, tame and translate data into a meaningful analysis.

 

To deny the public access to information that it cares about is the logical equivalent of locking the stadiums and playing in private so that no one will find out what is happening.
– Micheal Lewis. Moneyball

 

In the coming months, the We Think Organization will begin to release its own experiments with open data in a manner that is valuable to the end user. We are seeking to open source data in a way that makes sense to you and what you are trying to do. We are seeking to move the concept of data out of catalogues and tables and into tools that make sense. If you are currently working in the non-profit or social enterprise space and are interested in this work, please contact us via email or Twitter – @WeThinkOrg. We would appreciate hearing about and learning from your experience(s).

 

Note: I highly recommend picking up a copy of the book Moneyball from your local library or bookstore. It is one of the few books that I will read a few times a year.

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