Behavioural economics – it’s the Moneyball of business, according to Sonia Friedrich, who writes that the film is a must-see if you want to understand how to be competitive in today’s market.
I love this movie. This American biographical sports drama from 2011, which is based on a true story, is smart, relevant and it explains a concept not many people can pull off – for so many reasons. It takes bravery, intelligence, the understanding of theoretical insights, and a unique ability to build application of these insights, when everyone else is playing the game the same way and telling you that is how you have to keep playing it. It takes jumping off the edge and bucking the system, despite all the odds, because you know you can never win in an unfair environment when the competition has more money than you, and can always outspend you, and buy the resources they need to keep winning. So why do you keep playing the old way?
If you haven’t seen Moneyball the movie see it get it out or download it as soon as you can. Why? Because Moneyball shows exactly what most businesses are trying to do today and why they are not succeeding. If you ‘get’ this movie you will immediately understand the power of behavioural economics (B.E.) on your business – even if you don’t know what B.E. is yet.
Brad Pitt plays the Oakland A’s general manager, Billy Beane. In this real life story he changes the game by hiring an outside Yale-educated economist who looks at baseball differently. It’s about buying wins not players.
Most businesses today are asking the wrong questions.
What’s the problem? Are you even looking at the problem? While you are busy solving the wrong problem and investing resources, over and over again to do so, you might want to start tomorrow differently. Instead, tomorrow ask yourself two different questions:
Q1: What behaviour are we trying to change?
Don’t be stunned if this takes you hours to truly identify. Yes, I’ve been in management meetings where we have spent nearly two hours trying to understand and agree on the actual customer behaviours we are trying to change.
Q2: How do we disrupt it?
To disrupt behaviour requires something so powerful it interrupts the customers default behaviour. Because status quo is always the first choice option. Let’s face it, if you’re not #1 then the default is to NOT buy your product. If you’re too scared to admit the truth that customers are walking away from your brand and buying the competition, you’re spending money in the wrong direction.
The Oakland A’s won exactly as many wins as the New York Yankees. But the NYY’s spent $1.4M per win and OA’s spent $260K. Billy Beane forever changed the way baseball was played.
Yes, change threatens the game, livelihoods, the market, the competition and yes the scariest of all – people’s jobs (including your own). However without it you’re losing anyway. So why not give it a try?
Today, it’s about outsmarting not outspending your competition. When are you going to begin?