BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.
To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.
To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.
Actuaries would make good baseball general managers because they are disciplined and have strong math skills, suggested Billy Beane, whose novel approach to managing the Oakland A’s inspired a best-selling book and Hollywood movie.
“The great thing about baseball is the mathematics will work if you give it a chance,” he said during a keynote speech at Monday’s opening session of the 50th Risk & Insurance Management Society Inc. conference in Philadelphia.
Mr. Beane explained that he was forced to apply this previously untried strategy for building and managing a baseball team in order to meet budget constraints imposed on him after a new owner purchased the Oakland A’s in the mid-1990s.
“The team was sold, we were losing money, and there was a recognition that we could no longer have one of the highest payrolls in the game,” he said. “So we had to take a completely different approach.”
In June 2000, Mr. Beane’s assistant general manager, Paul DePodesta, a Harvard economics graduate, used regression analysis to determine that the A’s needed to win between 90 and 92 games that season to capture the American League West.
At first, Mr. Beane didn’t believe him. But by September, after the team won its 91st game and was headed to the playoffs, he realized that his assistant was on to something.
“From that point on, I was sort of all in,” Mr. Beane said, comparing his effective strategy of recruiting players based on their on-base percentage to card counting in the game of Blackjack.
“Sports is romantic. People like to feel that people running their team are clairvoyant. But they can’t predict the future. The smartest of us all want to believe the guy pulling the strings had some vision that we don’t. We weren’t clairvoyant. But we did have data that at least gave us some predictability of what was going to happen,” Mr. Beane said.
“In Oakland, we couldn’t afford to get romantic,” he said. “We wanted to find the most important metrics that would have the biggest impact on winning baseball games.”
At first, it was on-base percentage, but after other teams caught on to this metric, the players with high on-base percentages started to command larger salaries, effectively pricing themselves out of range for the Oakland A’s.
As a result, “we need to identify other undervalued skill sets.”
Since the 2003 publication of “Moneyball: The Art of Winning an Unfair Game” by Michael Lewis and last year’s release of the Academy Award-nominated film “Moneyball,” “the spread of objective decision-making has gone beyond baseball,” he said.
In fact, the Obama administration reportedly is applying some of the “Moneyball” principles to cutting government spending, according to Mr. Beane.