In the past we’ve discussed the importance of adding nonfinancial measures to the management dashboard, “indirect goals” that help predict and explain financial performance beyond the “direct goal” of profit. These might include the speed of aircraft turnaround in the airline industry, the conversion rate of people entering a store who actually purchase something, and employee loyalty in organizations with large numbers of workers in direct contact with customers.
The new movie Moneyball (and the book on which it is based) extol the virtues of employing nontraditional thinking and measurement in major league baseball. The Oakland A’s studied player performance data through the lens of “sabermetrics” to compete with much better-funded organizations, achieving success with a relatively small investment.
Writing recently in The New York Times, Cade Massey and Bob Tedeschi speculate on whether the film will rekindle the study of analytics in business schools and peak the interest of what may become a “Moneyball Generation” of managers and analysts who want to divine and track new measures that explain bottom line performance and provide a competitive edge. They ask whether we are on the verge of an ascendancy of those capable of teaching and performing the analytics necessary to supply the talent that the “new management” will need.
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