My employer, the Risk and Insurance Management Society, today unveiled its webpage for the upcoming RIMS 2012 Annual Conference & Exhibition in Philadelphia. They brought the show to Philly a few years ago, and it was a great host city. I’m sure it will be again next April.
Moreover, they got a speaker I consider to be one of the most interesting in RIMS history: Billy Beane.
For those who don’t know, Beane is the general manager of the Oakland A’s baseball team. And because he was instrumental in revolutionizing the sport into a new era of statistical analysis, he was also the subject of this fall’s blockbuster movie Moneyball, in which he was played by Brad Pitt.
The gist of the flick is this: In the olden days, scouts, coaches and personnel execs watched players hit or pitch, scanned a few basic stats and decided whether or not they would sign them to million-dollar contracts. It was an simple and seemingly adequate, if inefficient, system. But Beane had a tiny payroll so felt he had to better allocate his resources to cut down on waste. His solution: employ better data and foster a new way of thinking throughout the ballclub.
And in last month’s issue of Risk Management, I wrote about how the success of this transformation is not so dissimilar to how enterprise risk management has begun to rise to prominence in the business world.
You can check out the full piece here, but here’s an excerpt.
Baseball had become big business. But Oakland was poor. So basing the team’s strategy solely on the gut-feel of scouts, as had been done traditionally, would be reckless. With the stakes so high, how could Beane not use this new mountain of data to inform decision making? Tens of millions of dollars were on the line — not to mention a World Series.
The stakes for businesses have been similarly raised. Companies must also embrace any concept that may improve strategy. ERM has been a quantum leap forward for risk quantification. There are now oceans of information to help companies avoid the pitfalls of risk.
Head over to RMmagazine.com to read the rest.