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Sears Goes Moneyball

Sears Holdings announced Thursday that New York Mets player development VP Paul DePodesta has been elected to its board of directors.

For us baseball fans, DePodesta is best known for his stint as the assistant general manager for the Oakland A’s under GM Billy Beane. Beane became fascinated by the young Harvard grad with an economics degree, who was toiling anonymously for the rival Cleveland Indians, after DePodesta sat in on trade talks between the two teams. Beane hired him away immediately.

Business writer Michael Lewis spent a season with Beane and DePodesta, who at the time were on the cutting edge of baseball analysis through the use of statistical analytics, rather than traditional scouting. Lewis turned their story into a best-selling book, “Moneyball: The Art of Winning in an Unfair Game.”

DePodesta, working on Beane’s shoestring budget, theorized that through the use advanced statistical analysis, market efficiencies and inefficiencies regarding roster construction could be identified and exploited. It was unconventional, almost unheard of, and the pair were roundly criticized by the baseball orthodoxy. But a funny thing happened, the theory worked, and the A’s, with one of the smallest payrolls in baseball, went on to make the postseason with a roster of cast-off players and young, un-established pitchers.

“Moneyball” literally changed the way Major League Baseball front offices operated, and today, the use of advanced statistical analysis is the norm, not the exception.

Sears Holdings, which operates Sears and Kmart stores, could surely use a little out-of-the-box, “Moneyball” kind of thinking. The company’s stores have struggled with profitability in a brutally tough competitive environment with weak sales. They are the Oakland A’s of retail.

Sears chairman Eddie Lampert had this to say: “DePodesta’s ability to scrutinize data and use it to assess talent and drive execution makes him ideally suited to join our board.”

It’s a fascinating move and one worth watching going forward.