Moneyball and the Strategic Talent Game

The central theme of a newly released film, that beating competitors often requires creative thinking on human capital, is an important message for...
John BoudreauSeptember 26, 2011

The word strategic gets attached to almost everything these days, and certainly the arenas of human capital and talent management are no exception. But is your organization really doing strategic talent management?

Here’s a simple test my colleague Pete Ramstad and I wrote about in our book Beyond HR: “How concerned would you be if your competitor had a copy of your HR strategy?” Too often, the answer is: “Not very concerned, because ours probably looks a lot like theirs anyway.”

And they are right. Compare the human-resources strategies of two competitors, and it is frequently hard to tell which strategy goes with which company. Talent and organizational decisions are often based on very broad and generic strategic goals, such as “increase innovation” or “provide world-class customer service.” Or they reflect workforce goals that are important but generic, such as “retain more baby-boomer technical talent,” “increase diversity,” or “build next-generation leadership.” While those goals fit the organization, they would fit any organization. “Human-capital strategy” or “strategic talent management” often stands simply for the collective array of HR management programs of your organization. It is a combination of tactics.

Yet, the essence of competitive strategy is a disciplined way of thinking that produces choices that make the organization uniquely successful. Does your human-capital strategy reflect that?

It’s a great question for you to keep in mind as you watch the newly released film Moneyball, which is about playing the game of human-capital strategy to win. The Oakland A’s had to develop a unique approach to their players, or human capital, to compete with teams that could pay three times more for talent. They did it by looking beyond traditional statistics such as stolen bases, runs batted in, and batting average, and used deep statistical analysis to find that often-overlooked statistics such as on-base percentage and slugging percentage were better indicators of scoring success. These were overlooked in the market, so the A’s could acquire them cheaper than typically valued qualities such as speed and hitting contact.

Can you do this? The Wall Street Journal noted that the message of Moneyball is important to leaders because valuing assets, whether talent or otherwise, is relevant everywhere. An essential element of strategy is to deeply understand where and how you will achieve strategic success. When it comes to the talent asset, you can often find areas of “blue ocean,” where you can succeed uniquely, instead of the “red ocean” of competing for the same talent with bigger paychecks.

Consider the engineers who design the rides at theme parks. All engineers need to be adept at the technical safety of ride design, understand how physical movement affects the feeling of thrills, and consider the “storyline” of the ride. Yet compare the engineering needs of Disneyland versus a thrill-ride park like Cedar Point in Sandusky Ohio. At Disneyland, the song “It’s a Small World” is a triumph of ride design because it is an iconic example of the “immersive storytelling” that is  Disneyland’s competitive hallmark. Yet the ride is simple technology – a boat on a rail riding past puppet displays. At Cedar Point, few guests remember the music that accompanied their roller-coaster ride, but they will blog incessantly about how it pushed the limits of technology, G-forces, etc.

How is this a moneyball play? Tradition would say that ride engineers must innovate in both storytelling and technical physiology, so Disneyland and Cedar Point must be direct competitors. Yet storytelling is much more pivotal than physical boundary-testing at Disneyland, and just the opposite at Cedar Point. The two theme parks need very different human capital, even if people may have the same job titles. The more savvy approach is for Disneyland to attract, reward, and retain ride designers that are good at physiology but passionate about storytelling, and vice versa for Cedar Point.

The talent game for the “best” ride-design engineer is less about head-to-head battles for the same people and much more about a nuanced understanding of how ride design contributes to strategic success. The same pattern has shown up in my work regarding jobs as diverse as U.S. Navy crewmembers, web designers for Williams-Sonoma, and aircraft design engineers at Boeing and Airbus. Getting beyond generic human-capital strategies often reveals unique ways to compete.

Take another look at your talent strategy. Is it unique enough that you’d hide it from competitors? Are you playing moneyball when it comes to your human capital?

John Boudreau is a professor and research director at the University of Southern California’s Marshall School of Business and Center for Effective Organizations. His books include Transformative HR, Retooling HR, and Beyond HR: The New Science of Human Capital.