On Base Percentage

On Base Percentage

In 2002 Billy Beane, the General Manager of the Oakland A’s baseball team, had a problem.  The issue was finding money for payroll.  As General Manager it fell under his responsibility to recruit players who would bring his team into the playoffs, and hopefully, the world championship.  The money issue was simple – there was none, or at least not enough to have any realistic expectations of recruiting the star players in the highly competitive baseball league.

To give you an example of the payroll disparity Beane was looking at, in 2002 the New York Yankees allocated close to $126 million to compensate their athletes. The Oakland A’s were only allowed $34.4 million. This difference of $91.6 million was unquestionably going to be the difference between winning a World Series or being the laughing stock of professional baseball.

Perhaps more than any American sport, baseball is deeply rooted in tradition. The game has not fundamentally changed over the last 165 years, and in many regards the way the game was viewed has not significantly changed either.  That is until Billy Beane became desperate and necessity truly became the mother of invention. 

For years Billy felt the metrics used to measure potential players were not as accurate as they should be.  The idea that batting averages, runs batted in, and the tradition of focusing on High School athletes versus proven College recruits made no sense to him.  With his assistant, Paul DePodesta, Billy announced to his seasoned scouts that the way they recruited players was changing. They would no longer follow what they had previous done, and after analyzing hundreds of players statistics they determined the most important metric in measuring a potential ball player was a formula they called ‘On Base Percentage.

Simply stated, On Base Percentage is the measure of how often a batter reaches a base for any reason.  In their eyes, the “how” a batter got on base did not matter.  The fact that he did get on base was most important.  As they reviewed possible recruits they found some players just had a natural talent for getting on base.  Many of these players did not meet the traditional standard of major league scouts, so they fell under the radar of the majority of teams.  This created an opportunity for Billy Beane to recruit these players at a price Oakland could afford.

The success the 2002 Oakland A’s found was impressive. The team had 103 wins and only 59 losses, and broke an American League record for consecutive wins.  From August 13^th  – September 4^th the Oakland A’s won 20 consecutive games and made it to the playoffs.

I believe there’s a lesson here.  Just because something is imbedded in tradition, or a system in place is “the way we have always done it,” doesn’t mean there isn’t a better way.  It does mean there are multiple paths to success.  I know in each of our lives and businesses there are opportunities for improvement.  By doing some of our own number crunching and thinking outside the box, we may find our own “On Base Percentage,” which could be the difference between falling short or making it to the playoffs.

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