In the movie Moneyball, Brad Pitt played the role of Billy Beane, the General Manager of the Oakland A’s. The movie depicted events that took place during the early 2000’s when Beane popularized an approach to baseball that is often referred to as Moneyball.
At the time, Moneyball essentially was a way of valuing professional baseball players based on their ability to get on base. The Moneyball approach applies a very specific statistic that focuses on acquiring players that have the greatest likelihood of getting on base based on percentages at bat for the lowest possible salary.
The approach would often minimize the importance of other qualities often favorable in baseball, in favor of opting for a player with the lowest possible salaries and highest on base averages. Lesser known players were acquired in favor of future hall of famers if the statistics worked.
In 2000, the Athletics became the first team in the 100+ years of American League baseball to win 20 consecutive games. I wish I could report that the A’s won the World Series during this time period, but they didn’t. They did, however, improve the teams winning record coming in first or second in their division for many years following the new strategy and doing so with the 4th lowest league salary.
This got me thinking. Is there a key statistic that a business could focus on that would ultimately impact the overall performance of the company? Remember, Beane wanted to win games. He focused on getting people on base to support that outcome. His statistics gave him the information that would help him acquire the best players for the lowest price.
We all know in business what winning the game is, right? If not, let’s set up a time to talk about it. The question is “what is the core statistic that a business should focus on that will ensure that they win at business?”.
The answer is the Systems Performance Score.
Allow me to explain. As you already know, I operate from the premise that:
The key to success of any business is dependent on the quality of its systems. If you want to improve your business, you improve your systems. Since that is true then we must have a method for improving and scoring the performance of our systems.
I’ve put together a simple system that scores the quality of a businesses systems. Using this methodology enables the business to quantifiably focus the organization, like Beane did with player recruiting and the teams strategic focus, to intentionally and systematically improve the business through continual systems improvement.
When scoring a system, the Level 7 System guides us to score four primary areas.
1) Is the system producing the results it is intended to produce?
2) Is the system cost effective?
3) Is the system congruent with the company culture?
4) Is the system easy to follow and use?
We rate each of these questions on a scale of 1-5. 5 being the best. The higher the overall score for the system, the better the system is doing. Once you’ve scored all your systems, then you have a baseline Systems Performance Score.
The business development and improvement strategy of your organization is to continually innovate and improve your systems to elevate the total Systems Performance Score.
Rather than randomly chasing improvement, innovation and growth, the Level 7 System shows us to be systematic, disciplined and intentional in our strategy to growing a thriving, high performance entity. Want to win the world series of business, then focus on your Systems Performance Score.