In Moneyball, author Michael Lewis details how the Oakland Athletics assembled a competitive baseball team despite a sizable payroll discrepancy between the A’s and other large-market teams. How did the A’s General Manager (GM) Billy Beane achieve success despite a smaller payroll? By using sabermetrics!
Pioneered by Bill James, sabermetrics is a pragmatic utilization of baseball statistics to evaluate and compare the value of individual players. Baseball GMs can use sabermetric calculations—On-Base Plus Slugging (OBS), On-Base Percentage (OBP), Wins Above Replacement (WAR), Walks Plus Hits-per-Innings Pitched (WHIP), etc.—to assign a value to a player and understand how that player compares to the broader market of baseball players. For the purposes of this article, I will be evaluating the statistic “Wins Above Replacement (WAR):”
WAR measures a player's value in all facets of the game by deciphering how many more wins he's worth than a replacement-level player at his same position (e.g., a Minor League replacement or a readily available fill-in free agent).
As the objective of baseball is to win games, players with a higher WAR are more valuable to teams and are therefore paid more than players with lower WARs. Players can increase their WAR in a variety of ways including improving their batting, base-running and fielding.
Baseball players however are not the only employees who should be trying to increase their WAR. Like baseball teams, organizations outside of sports can also be viewed through a “sabermetric lens” because all organizations are trying to accumulate “wins.” As is in the business world, wins in baseball are statistically directly correlated to revenue. Similar to MLB GMs, organizations evaluate employees based on their ability to deliver wins and compensate them accordingly. An employee who has a value well above a “replacement-level employee” is compensated at a higher rate than an employee who has similar value to a replacement-level employee. Therefore, employees should be asking themselves, “How do I increase my WAR and receive increased compensation in conjunction with my increased value?”
Solve Complex Problems (improve batting average): Superior batting skills are imperative to the success of a baseball team as all players get to bat (ignoring American and National Leagues’ pitcher batting rules). Similar to batting, all employees must solve problems within an organization. However, those who are able to solve bigger, more complex problems are most valuable to an organization.
Look for improvements (steal more bases): Stealing a base improves a team’s chances of scoring a run and runs lead to wins. Employees who are able to make improvements within an organization will catalyze more wins and differentiate themselves from potential replacement-level employees.
Build contemporary skills (5-tool player): A “5-tool player” in baseball has speed, power, arm strength, can hit for average, and has fielding ability. In business, employees should strive for excellence in all elements of their job and stretch themselves to gain acumen in a variety of functions. Additionally, “5-tool employees” in business are not readily available to hire, which makes these employees very valuable to their organization.
Improve communication skills (know the signs and signals): In baseball, information is often communicated through signs and signals. Within an organization, communication can include verbal and non-verbal cues, and employees should master all forms of communication (formal, informal, oral, written, telephone, e-mail, meetings, etc.). A mastery of all forms of communication will improve an employee’s value.
Adapt to change (switch hit): How do dynamic hitters protect themselves against pitching changes? They change from right-handed hitting to left-handed hitting (or vise-versa)! Those employees who are flexible and embrace continuous change won’t need to be replaced and will avoid career plateaus that can stifle earnings.
Play to win (competitive focus): In baseball and business, employees who act with purpose and intense focus will produce superior results. Like a baseball player’s focus during every at-bat, an employee should have competitive focus on driving results during every business interaction.
Eliminate feelings of entitlement (veterans and rookies evaluated equally): Does a player’s years of experience or age factor in to their WAR? No. A player can be successful in baseball whether they are 20 or 35. In business, higher compensation should be awarded to employees who deliver results, independent of tenure.
Continuous self-improvement (add another pitch to your arsenal): Valuable players get better year after year. Pitchers improve their pitching arsenal. Hitters learn to hit different pitches in different areas of the strike zone to different parts of the field. In order to increase WAR, employees must be looking to continuously improve professionally and personally, and further separate themselves from replacement-level employees.
- Collaborate and network (turn more double plays): Baseball is obviously a team sport. However, business is a team sport as well, and the more you are networked and integrated into your organization and league's revenue producing workflows, the longer a replacement-level employee would need to replicate your value.
Use sabermetrics to understand your value. The more valuable you make yourself to your organization, the more you will be compensated!
Trevor Harvey is a former Account Executive in Business Development with the Arizona Diamondbacks. He now is a Senior Manager of Customer Marketing at ON Semiconductor. He offers great perspective as someone that spent 4+ years in sports and now 4+ years out of it. He's a big follower of theClubhouse and wanted to contribute to be a part of it. He can be found on LinkedIN here.