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Data-driven decision making feels new? Read this. Think again.

Have you watched or read Moneyball? If that was some time ago, here’s a little reminder – it’s about a real case of Billy Beane, the general manager of Oakland Athletics baseball team. Given the limited resources, he discovered a way to find great players that happened to be undervalued and therefore – out of the sight of teams with bigger budgets.

Of course, it wasn’t only Billy Beane’s gut that allowed him to find these players. It wasn’t ‘the gut’ at all. He used sabermetrics which are statistics that measure the in-game activity to answer some questions. Thanks to this data-driven strategy, Oakland Athletics won 20 consecutive games in the 2002 season, making it a world record.

Beane knew which statistics should he track, had his own, scientific approach to analyzing the data, and allowed himself to skip his biases by just looking at the numbers in order to take a decision. But what does it have to do with your business? A lot. This is pure data-driven decision making in action. It’s the same approach as companies follow – or should follow – today in order to reach their goals while minimizing the risks. It’s all in the numbers.

Moneyball is a movie based on Michael Lewis’ book Moneyball: The Art of Winning an Unfair Game. It turns out, however, it’s not the full story. Lewis found out that the ideas presented in Moneyball were actually introduced decades earlier by two Israeli psychologists – Daniel Kahneman and Amos Tversky. What’s more, one of them – still a psychologist – won the Nobel Prize in economics!

How that could be possible?

Dive into this great story written by Michael Lewis on Vanity Fair to learn how the way we make decisions today was found out about 40 years ago by two, very different, men.

Read the story on Vanity Fair.

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