I love sports. Love them. If I watch 10 hours a week of television, 9 hours are sports. Or SportCenter. Or sports documentaries. You get the idea. So being a sports fan I also read books about sports. Probably the most famous one to come put in the past 10 years was Moneyball by Michael Lewis. The book follows Billy Beane and how he used objective analysis to turn the Oakland A’s (a small market team contending with the likes of the Boston Red Sox, New York Yankees and Los Angeles Angels) into a playoff team. They recently made a movie about the book starring Brad Pitt (I’m not sure how Billy Beane lucked out and got Brad Pitt to play him, but hey, good on him).
This is what Billy Beane looks like. No slouch, but no Brad Pitt.
So what does this have to do with accounting? A lot, actually. Objective analysis boils down to using data to help make decisions in addition to prior experience and “gut feelings”. A large part of my practice is devoted to helping business owners stop managing solely by feeling and start managing by knowing. It’s amazing how much easier smart decision making gets when you actually have data in front of you to study. And smart decision making levels the playing field, in sports and in business, so that it is not always the team or organization with the most money that wins.
The next few posts will continue with this Moneyball theme by outlining some of the numbers and metrics you should be looking at as a business owner. These numbers will help you make smarter decisions, which will in turn help you compete, even if your competition is bigger, richer or better looking!
Until the next post, I would recommend this article from Daryl Morey, the general manager of the Houston Rockets. Houston was one of the first teams in the NBA to use advanced metrics to study players and Daryl is often regarded as one of the brightest GM’s in the league. The article is about the proliferation of objective analysis in sports as well as other industries. He gives some great examples, definitely check it out!