Green: Extreme ‘Moneyball’: Astros go all-in on data analysis

From Joshua Green at Bloomberg Businessweek on August 28, 2014:

Professional baseball is an insular business, so when Jeff Luhnow showed up for his first day of work as the St. Louis Cardinals’ vice president for baseball development, he already had two strikes against him: He was a former management consultant at McKinsey, brought in to shake up the organization. And the sum total of his baseball experience was the McKinsey fantasy league and a business school paper he’d written on how the Chicago Cubs could win the World Series.

It was the fall of 2003. Michael Lewis’s book Moneyball, about the statistics-driven approach of Billy Beane’s Oakland A’s, sat atop the bestseller list. It caused a number of owners to rethink their own approach, which provided Luhnow entry into a game that otherwise wouldn’t have had a place for him. “I wanted to make sure we were cutting-edge on all fronts and thought having someone from the outside would give us a fresh look,” says Bill DeWitt Jr., the Cardinals’ owner.

Depending on whom you asked, this was either an odd or an inspired idea, since the Cardinals had made the playoffs three years running and didn’t appear to need help. But DeWitt worried the team wasn’t built to last. The farm system was weak, and because his club was a midmarket franchise, he couldn’t afford to replenish it with pricey free agents. So DeWitt asked his son-in-law, a McKinsey vet, if he knew any consultants with a passion for baseball. He replied, “I’ve got the perfect guy for you”—Luhnow.

DeWitt wanted Luhnow to design a better system for evaluating players. Luhnow hired a NASA engineer to help him make sense of all the new data that were becoming available for assessing ballplayers. “We talked a lot about how we could gain a competitive edge,” DeWitt says. But the people running the Cardinals’ old system resented the bespectacled interloper with his MBA and ideas about how they could do their jobs better. Behind his back, they referred to Luhnow as “Harry Potter” and “the accountant.”

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Originally published: August 29, 2014. Last Updated: August 29, 2014.