Moneyball Hiring: The Key to Hiring Sales Superstars
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What is Moneyball?
“Moneyball” — a best-selling book — and hit movie, explains how the Oakland A’s 2001–2002 baseball team, with a comparatively minuscule budget of $41 million, out-performed behemoths such as the New York Yankees with their staggering budget of $125 million.
Prior to 2001, the Oakland A’s were trying to do the impossible: apply traditional thinking on team management without the resources necessary to accomplish their goals. They could not begin to compete with other teams, and so, between 1980 and 2001, they finished above .500 only seven times.
The explanation for “David finally beating Goliath”, derives from Oakland’s refusal, beginning in 2001, to follow the traditional way baseball owners and managers constructed and managed their teams. Oakland adopted a scientific/statistical metric-driven system that focused not on buying players with big resumes and enormous salaries, but rather focused on applying their budget to buy wins. While most teams used traditional standards to measure the abilities of big leaguers — batting average, number of homeruns, etc. — the A’s used a new metric called Sabermetrics. This metric of performance included such statistics as walk rate (BB%), contact percentage (contact%), and on-base percentage (OBP); in other words, criteria which Sabermetrics believes is the most important thing a batter can do at the plate: avoid making an out.
In 2001 the A’s became one of Major League Baseball’s best teams and proved that applying Sabermetrics to analyze players and build an entire team around the results was far more accurate and predictively reliable than using traditional metrics. In 2002 they won their division. The innovative and insightful solution to solving Oakland’s challenge was replacing old-fashioned, unworkable “intuition” and “gut-feeling” with reality-based understanding and prediction. Oakland developed a science-based metric system for hiring and coaching optimal performers whom no one or few others, recognized. Owners in Oakland could see a reality no others could, and they could PREDICT the future with reliability.
The Search for Sabermetrics in Hiring.
Mark Twain’s maxim, “There are three kinds of lies: lies, damned lies and statistics.” applies to baseball at rate of under 2 percent. Statistical records and calculations have always been an essential part of baseball, but it wasn’t until the late1970’s that the art really took hold when a gentleman by the name of Bill James published a book on what he called Sabermetrics. James’ genius was to use statistics not simply to record past player-performance, but to predict future performance more reliably. James called Sabermetrics “the search for objective knowledge about baseball.” The word “objective” is what provides the immense value to Sabermetrics. Before Bill James, baseball teams were using largely subjective methods — gut feel, intuition, simplistic assumptions that past performance would predict future performance — to inform managerial decisions. Resembling baseball scouts using subjective standards as though they were reliable, most managers believe they can intuitively determine the character of salespersons and predict top performers, from the moment they walk through the door for an interview. Managers trust their gut-feel and intuitive responses to make hiring decisions.
In one scene from “Moneyball,” the movie, the general manager and his talent-scouts discuss which minor-leaguer to call up to the Bigs. One scout says “I like Perez.” Another scout retorts, in all seriousness, “Perez has an ugly girlfriend and an ugly an girlfriend means no confidence.” and thus Perez is a poor prospect.
How often, when discussing applicants to employ, have company managers and their hiring team based their views on gut-feelings or intuitions or ridiculous criteria based upon a theory closer to magic than science? Similarly, many players superstitiously refuse to wash their socks, eat at the exact same restaurant on game day, use the same bat, glove, or helmet, demand a certain jersey number, all so as to improve performance? Managers and Scouts are similar in this respect. Both use intuition and even superstition to manage their teams Here is a maxim about which you can be completely certain: data trumps intuition, and data really trumps superstition. Facts trump gut-feelings, reliable predictive statistics trump the attractiveness of a candidate’s girlfriend. The Oakland Athletics proved this maxim by forging one of the best teams in baseball.
What is the equivalent of Sabermetrics in hiring?
Billy Beane, the current general manager of the Okland A’s and the main character in the movie Money Ball, was the prototypical high school athlete. He was 6’4’’ and just under 200 pounds. He was the highest scorer on his basketball team, the quarterback of the football team, and the best hitter on his baseball team. Scout’s loved him. Lenny Dykstra, a teammate of Billy Beane’s in the minor leagues, was a measly 5’10’’ and 160 lbs. and scouts didn’t think much of him. Which of these two players became a big league star playing for both the New York Mets and the Philadelphia Phillies? Lenny Dykstra.
How could this happen?
I started at InsideSales.com in 2005 and we had just begun building out the sales team. We were going through resumes as fast as we could to find the best sales people and I remember when we found him. He had the perfect resume: 10+ years of solid sales experience, he had built sales teams in the online space multiple times, and had graduated from a nearby university. Soon he became the Director of Sales and he was going to be the person to take us to the next level. Sadly, he failed and was gone in a few months. There was nobody to fill his shoes so the team went unmanaged for a time. Interestingly there was one individual on the sales team who had been hired at the same time as the previously mentioned sales director and he had been performing at top levels. He literally had no resume. He was a kid without prior sales experience, going part time to a local state college. After a year of solid performance he became the manager and soon the director. With his help the team quadrupled in size and revenue. To this day he is considered one of the best managers to have come through the company.
How could this happen?
How did a kid with no resume going part time to a state college become one of the best salespeople our company has ever seen while the individual with the right resume completely failed? How did Billy Bean the prototypical Major Leaguer fail while Lenny Dkystra succeeded?
Consider for a moment, the best sales-person you’ve ever known. What made/makes him or her exceptional? Was it the degree from an Ivy League school? The 10 years’ of experience? Their employment at a Fortune 500 company? I have posed this very question to thousands of sales managers and leaders and if you responded as most of them have, then you probably didn’t say things like what school they went to or what company they worked at perviously but rather one of the below attributes.
· Hunger to Learn
· Desire to be the Best
· Highly Competitive
· Intensely Passionate
· Endlessly Resilient
It’s intuitive. Everybody knows the above list is what makes the best salesperson yet the entire system on which our hiring decisions are made is based on the things like GPA, school, and prior work experience and has been for hundreds of years.
The crucial difference that made the kid more successful than the sales director is the difference between experience, skill, and talent. The kid had sales talent — a passion and hunger as well as a gift for interacting positively and genuinely with people while the sales director didn’t. Send that sales director to a dozen courses on selling and he would have never been as good as that kid. The kid was a natural and natural talent is nearly impossible to teach.
What is talent?
Talent is to hiring what sabermetrics is to baseball. What is talent? We define it as configurations and inclinations of human character that can be effectively applied. The words “effectively applied” are indispensable because natural inclinations of the human psyche can also be ineffectively applied. For example someone who is a naturally gifted communicator can also at times be perceived as someone who talks too much.
The Journal of Association and Leadership, says “Everyone has talent. Everyone is born with talent. Neurological and cognitive research suggests that by the age of three, children develop patterns of thoughts, feelings, and behaviors that strongly shape how they approach and behave in their world. As a person’s brain further develops, the body begins pruning those pathways that are less used and widens those that are more developed.” In other words, to be a human being is to have talents, AND to develop some of those talents; as many as you choose to develop, and when you choose some talents and neglect others, as you necessarily must, those other talents remain un-developed, though present.
Dr. Harry Chugani, professor of pediatrics, neurology, and radiology at Wayne State University, confirms that description with a metaphor: “Roads with the most traffic get widened. Roads that are rarely used fall into disrepair. . . Those widened pathways quickly become the templates of the thoughts, feelings, and patterns of our lives.”
Can talent be measured?
According to Gallup, talent is not only measurable, but just as Oakland used Sabermetrics to predict player performance, so talent can be used to predict top performance in a role.
Gallup is not alone in this belief. Google has a reputation for hiring people with the most prestigious academic achievements but in order to scale their new employees as well as to find top performers the company has begun asking applicants to fill out a particularly detailed online survey that explores their attitudes, behavior, personality, and biographical details going back to high school. They believe that this data will predict and evaluate employee performance at Google. Still, not every company is following Google in their detailed analytics of applicants. A study by Deloitte Consulting indicated that among companies with 25,000 or more employees, only about 5% are using predictive analytics in human resources.
It is very difficult to objectify the hiring process and to discover what reliably predicts performance for top sales people but it can be done. In this article, we wanted to set the stage for the importance of including talent as part of your hiring process so you can help disrupt hiring like Bill James helped disrupt baseball.
Next we tackle, how can talent actually be used in the sales process.
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