Nonprofits with the need for developing a new business model to ensure their future success may find inspiration from changes occurring in Major League Baseball. Increasing financial pressures created by the spiraling cost of player salaries convinced the Oakland A’s they were no longer able compete against teams with much bigger bank accounts. They realized that following the direction of other teams that had no need to control spending wouldn’t be sustainable.
The A’s strategy was depicted in the book Moneyball by Michael Lewis and adapted to the big screen movie Moneyball.
The organization’s solution to its financial challenge focused on winning enough games each year to make the playoffs, but doing so at a much lower cost than other teams.
Their approach certainly defied conventional thinking.
To implement this new strategy, the team adopted what was considered to be radical methodology for evaluating players to be acquired and retained in their system. They employed a different set of performance indicators rather than those used by every other team in professional baseball.
This willingness to challenge accepted practices led to a shift in priorities and the Oakland A’s got the results they set out to achieve. They won more and spent less.
Other teams are now following Oakland’s model and are winning as many games with a lower payroll as those at the high end of the team salary scale.
The Moneyball lesson for nonprofits is that adapting to new challenges requires new thinking and behavior changes. The Oakland A’s recognized a different direction was needed and took action. They were willing to think and act differently.
Is your organization willing to honestly assess its performance, challenge current practices, and take action on changes needed for a sustainable future?