The Road To General Manager
At age 18, Billy Beane had more hype surrounding him than LeBron James did coming out of high school. Scouts would flounder to his high school and drool at the opportunity of drafting the 6′4, power hitting sensation. The New York Mets got that opportunity, taking Billy with the 20th pick in the first round of the 1980 baseball amateur draft.
The draft simultaneously opened a new door while closing another for Billy. He had always planned on playing pro baseball, but his ideal plan always called for a career to come after college. Now he was forced to make the decision to either leap into baseball, or go to school first. He chose to start playing, a decision that he regretted when he realized that he would miss out on the college life he had always envisioned for himself.
Billy climbed the minor league ladder to make his first Major League appearance in 1984, four years after his journey began. For parts of the next six seasons, Billy would play for four different teams in 148 games, hitting 3 home runs and compiling a truncated .219 batting average.
After ten seasons of professional baseball, Billy entering spring training during what was supposed to be the prime of his career. At this time, a unique opportunity arose.
“I was literally on that field back there (points to A’s spring training practice field) in 1990, and I had a conversation with Ron Schuler, the soon to be GM of the White Sox. He started talking to me about an opportunity, and I said hey, it’s something that I’m interested in. He said yeah, you’d probably be good at it. So I said how about now? The next day I was an advance major league scout.”
Moneyball author Michael Lewis describes this decision to abruptly end his professional baseball career as similar to a movie star walking off the set to be a production assistant. But the three years he would spend as a scout would start his pursuit of a passion that went back to when Billy was a kid playing pseudo-fantasy games.
In 1993, Billy was named Assistant General Manager to then GM Sandy Alderson. Sandy would prove to be a key mentor in shaping Billy’s innovative managing style. He prepared Billy to take over the General Managing position in 1997. After two losing seasons, Billy implemented the entrepreneurial strategies that would reclassify his Athletics team from under-achievers to “winners.”
The Entrepreneurial Approach To The Game
When Billy took over the general manager position for the Oakland A’s in 1997, his situation was (and still is) similar to that of an ambitious entrepreneur going up against a company like Microsoft. He had little resources to work with while facing major league competition. As Billy put it in our interview:
“It was a negatively unique situation in the sense that you have a limited amount of resources and you’re in a small market, but at the same time it’s an opportunity that gives you a complete artistic license to do whatever you want. We knew we couldn’t run our team like the New York Yankees. But we knew we had to find our niche, and we knew we had to find our gaps in the marketplace.”
Faced with this “survival of the fittest” scenario, Billy and his team found their niche to not only survive, but single-handedly change the way baseball execs manage the game. Their niche, which they would soon become famous for, was explored in the best selling book Moneyball by Michael Lewis. They focused on more obscure baseball statistics that other teams took little notice of. Suddenly, stats such as on-base percentage held a value greater than batting average. Walks became just as important as singles. Strikeouts were a big no-no.
The concept was constructed after Beane began to draw upon the success of others outside of the baseball industry, such as Warren Buffet and Berkshire Hathaway. His goal was to exploit the opportunities in baseball much like Warren Buffet did with early hedge funds and to steer away from the stereotypical template that ran so many organizations in baseball. This was innovation at its finest.
As a result of his innovative approach, the A’s haven’t had a losing season since 1999, winning 4 American League Division West Titles on a payroll under a third of that of the storied New York Yankees.
Pursue The Passion Advice:
PTP: What kind of advice would you give to someone who is trying to identify and ultimately pursue their passion?
BB: “Don’t necessarily work towards the end. The end is determining what kind of grade you’re going to get, then what kind of job you’re going to get by virtue of going to a specific school. I’ve got a brother that has spent his life playing guitar and surfing. And everyone wondered what he was going to do, and you know what, he’s doing just fine. He followed his passion, found a way to make a living, and ultimately has been successful. The advice I’d give, if you love art history, major in art history. Because you’re going to be good at art history, and someone is going to find a way to pay you for it. As opposed to saying that I want to be an electrical engineer because it makes a lot of money. Ultimately, there’s a short shelf life to that. To me, it’s the process of learning, and if you enjoy that, the world is at your feet. The process is most important, not the end.”
In the book Moneyball, it was described that half of you wanted to be playing baseball, and half of you did not.
Yeah, that’s probably too much of a linear definition. I loved playing the game. The biggest difference is that my whole life I was geared to go to college. I thought I’d play pro ball, but I always planned on doing it after school (phone rings. Billy gives out a number to his wife)
I liked playing, but I always had more of a passion for building a team, quite frankly. I always thought playing was a means to an end. Even when I was young. But my whole life was geared towards going to college and playing. I think I would have had more passion playing had I stuck to my plan, gone to school and played there. I was always half in, half out because I was always half in with college.
In fairness…(phone rings again. A ticket request.)
When I was a kid I played my own sudo fantasy games. Building a team was always ultimately what I wanted to do, career wise.
I probably could have kept playing a few more years, but there was a pretty unique opportunity to stop playing and immediately go into major league scouting. I was on that field back there (points to the practice field at the A’s Spring Training facility), and I had a conversation with Ron Schuler, who would soon become the general manager of the White Sox. He was doing the major league advance job. I told him that I’d like to try it one day, and he said I’d probably be good at it. Then he said, “Well how about now?” The next day I was an advance major league scout.
If your situation is unique to the others you’re competing against, unique in a negative way because we didn’t have resources, you ultimately cannot run your business the same way bigger teams do. You have to find your niche, or gaps in the marketplace.
For example, if you’re a software maker, you’re going to go head to head with Microsoft. In other words, you’re going to have to create something so unique that people are going to have to be attracted to it.
The same with baseball. We couldn’t run our team like the New York Yankees. We couldn’t run it like most of the other clubs. Which gives you an opportunity because it gives you an artistic license to do whatever you want, to some extent.
Some of the things we tried to do was look outside the industry and borrow what other people and industries were doing to compete. Sometimes you have a tendency to look at your peers and use them as a comparison or as a template for running your own business. We’ve tried to do the opposite. We’ve tried to look at other industries and how they were doing things. We looked at guys like Warren Buffet and Berkshire Hathaway. With some of the hedge fund managers and the opportunities they exploited with the early hedge funds.
We tried not to stay in our little box that we had here in baseball. We tried to look beyond and see where other people were drawing upon success.
Failure is all around baseball. Success is making an out 7 out of 10 times at the plate. How do you overcome failure?
Well, the quickest way to forget about a failure is to hurry up and do something right away. In other words, if you’re a general manager and you make a bad trade, hurry up and make another one. The problem with failure is that it sometimes prevents you…you should certainly take time to analyze why you failed. Understand why you failed. But don’t let it freeze you and create a fear. The worst thing about failure for someone running a sports club is that it prevents them from doing other things they should be doing after that.
In our industry we have press. We have people who all day long get online and blog their opinions. In many cases, what failure does is makes people a little fearful of trying something else. For me, the worst thing about failure is that you become stagnant and you become afraid. Once a decision is made, you have to move on.
You could also get arrogant if you’ve had successful decisions, and stop doing the things that allows you to make those successful decisions. Just because you assume you’re always going to be right.
You’ve experienced a lot of success. How do you avoid that arrogance?
Well, I’ve had failures too. The best thing is to remind yourself that you’re never as good as someone says you are, and you’re never as bad as everyone says you are. You’re probably somewhere in between. Remind yourself where you’ve made your mistakes, and realize that you’re certainly capable of making your share of them.
In this game, if you’re right three out of five times, you’re successful. Also, if you’re right two out of five times, you’re not successful. It’s a very fine line.
You’re approaching 20 years with the A’s, and I’m assuming that you’ve had some appealing offers trickle in…why Oakland?
Well, that one’s easy. I give my daughter the same advice. There’s two ways of looking at a career and life in general. If your pursuit is as much compensation as you can get right away, I think you’re looking at things myopically. If you’re really good at something, people will find a way to pay you for it. Ultimately, you’re going to be the best at that job if you’re in a spot where you’re not just professionally happy, but you’re personally happy.
For me, I turned down the Boston job. It was about four times the amount of money I was making. But, I would have only been taking it for two reasons. One, to work for John Henry, who I have a lot of respect for, and ultimately because of the compensation. I realized that that’s not the right reasons to make a decision.
As it’s turned out, in the interim, I’ve recouped any lost compensation I would have had, and I have the opportunity to make more by virtue of making a decision for the right reasons.
So in my adult life, I’ve tried to decide what’s the right thing to do instead of going on what’s going to pay me the most. And it’s worked out.
How do you not conform, block the pressure, and do things your way?
Well, I don’t think you realize you’re doing it when you’re doing it. I think there’s times when you’re unaware, as a general manager, as to why you’re doing something. Certainly, what starts to shape the way you do things are the people around you and your mentors.
In my case, Sandy Alderson. And the people you surround yourself with. David and Farhan are incredibly bright guys who come from different backgrounds. Previously it was Paul, and when Paul, David, and J.P. were here at one time, there was a sort of synergy between all of us that sort of helps develop you. But you don’t really realize what you’re doing sometimes at the time. You almost have to look in hindsight to see how that certain thing happened.
Everyone says the generic term, “I’m going to think outside the box.” But how many people actually do? And, when you actually are doing it, sometimes you’re not necessarily aware that you are. Ultimately, you can have ideas that are outside the box, but the biggest challenge is actually implementing the ideas and having the fortitude to carry them forward. You can say you’re going to, but until you do, doing it is really the challenge.
How important is that support network?
Most of the people who have worked here, every one of them is a little smarter than the other in certain areas. The ability to know your strengths and weaknesses. If you assume that you’re a leader with no weaknesses, then you’re probably a fool, because you’ve surrounded yourself with weak people.
I’ve ultimately hired guys who I thought could take my job. As a result, the organization is far better for it. The guys who take jobs here are all far brighter than me. They ultimately have the ability to do my job either directly, or in Paul and J.P’s case, they did it somewhere else.
What kind of advice would you to someone who is trying to find and identify, and ultimately pursue their passion?
I have a soon to be 17 year old daughter, what’s the advice I give her? Well, I’ve been telling her since she’s been going to school, and there’s a point to this, is to enjoy the process of learning, not necessarily working towards the end. The end is what kind of grade am I going to get? What kind of job am I going to get by virtue of going to this school?
I have a brother who has spent his life playing guitar and surfing. Everyone wondered what he’s going to do. Well, you know what? He’s doing just fine right now. He’s a couple years younger than me, but he’s sort of followed his passion, found a way to make a living, and ultimately he’s been successful.
The advice I’d give is if you love art history, major in art history, because you’re going to be good at it, and someone is going to pay you well for it. As opposed to saying you want to be an electrical engineer because it pays a lot of money. Ultimately, there’s a short shelf life to that.
It’s the process, the process of learning. If you enjoy that, the world is at your feet.
For me, I’m lucky that I love this job. But there’s so many other things that I love too. The idea of getting to do other things that can be incredibly exciting, some very simple, some very extravagant. That comes from the fact I’ve always loved the process of learning, and not necessarily looking at the end. Somehow I’ve ended up there.
I love the game. I love playing a fantasy rotisserie baseball. Somehow I’m able to get paid to do it. So I look to other things in my life that I love too. I love European history, and Roman history. I’m constantly learning. You turn on the TV and someone is doing a Roman archeological dig.
So I really stress that. The process is most important, not trying to get to an end. In college it might be a letter grade. It might be a SAT score in high school. It might be going to a certain school so you can get a certain job. I completely disagree with that approach. That’s just my feeling.
Great doctors come from every school. Brilliant surgeon could come from a junior college or a state university. It’s about what they grab from that college, as opposed to what can the college do for me?