Moneyball has been the talk of baseball for years. Its creator, Oakland A's General Manager Billy Beane, has used the approach to guide his team, with one of the lowest payrolls in the league, to the playoffs in eight of the past 15 seasons. And the front office of the Boston Red Sox famously used it in 2004 to win their first World Series in 86 years.
The essence of Moneyball is applying rigorous statistical analysis to player evaluations -- to uncover rare and unusual talent that was overlooked by traditional scouting. Simply put, Beane and other baseball people have been able to find value in players that scouts, who used century-old subjective observations and even "gut feelings," flat-out missed.
And it works.
Gallup Analytics has discovered that applying rigorous analysis to evaluating managers in companies -- particularly to uncover those with the innate talent to manage teams -- works, too. The problem is, too many human resources leaders, like old baseball scouts, don't believe in using analytics to find that innate talent. They think the same old methods work just fine.
In fact, they're not sure the natural talent to manage even exists. HR leaders seem to believe that, although sports stars, great artists, super-entertainers and gifted learners (with genius-level IQs) have rare God-given gifts, somehow great managers can be trained and companies can mark their progress through things like competency programs. But like those old baseball scouts, HR leaders are flat-out missing the management talent in their ranks.
Here's some evidence. Only about 30% of U.S. employees are engaged in their jobs -- they have managers who encourage their development and focus on their strengths. The remaining 70% of employees are either not engaged at work (50% of all employees) or actively disengaged (20%). Worldwide, an alarming 13% of employees are engaged.
Who engages employees? People with the talent to manage teams. Gallup scientists have found that managers account for 70% of variance in employee engagement scores across business units. The problem is, every day, thousands of employees are named "manager" or "supervisor" who have little to no capacity to perform that task. Gallup has uncovered that companies fail to choose the candidate with the right talent for the job 82% of the time. Those companies are wasting time and resources attempting to train bad managers to be who they're not.
There's a reason for this: Authentic management talent is very rare. It takes Moneyball -- rigorous analytics and talent assessments, not old corporate "scouting reports" -- to uncover that talent.
Gallup has found that just one in 10 have the natural, God-given talent to manage teams effectively. Those gifted individuals know how to maximize the potential of everyone on their team; boldly review performance; build relationships; overcome adversity; and make decisions based on productivity, not politics. They are born, not made. They are wired differently. The "scouts" in the HR department might think that person over there with an MBA can manage, but she may not have a natural gift for it. She may be a better individual contributor, regardless of her prestigious degree.
Gallup also found that another two in 10 people have some characteristics of basic managerial talent and can function at a high level if their company coaches and supports them.
But when you take out the one in 10 who are naturally gifted managers, and the two in 10 who are coachable, this leaves seven in 10 people in management positions who probably shouldn't be there at all, and who are actually likely to make their teams worse.
It's clear that companies need simple, high-quality assessments for every workplace on earth to sort players into the right categories and find management talent no one knew was there. HR needs tools to double and triple their probability of getting it right.
HR needs Moneyball for managers.