In the late 1990s, the Oakland Athletics baseball team startled the baseball world. It was the poorest team in baseball. Yet, the Oakland As won more regular season games than all but one of the other twenty-nine teams, the Atlanta Braves. The baseball commissioner chalked it up to “an aberration”. But, it was not. Two men with Bill as their first names changed the course of baseball history.
Some 40 years ago or so, Bill James was an aspiring 20ish writer who loved baseball. In his spare time as a security guard for a pork and beans cannery, he began laying down his ideas.
James liked to pose questions:
“Which pitchers and catchers allow runners to steal the most bases?”
He demonstrated the fallacy of many measurements used by the baseball industry to assess the talent of players. Historical measures related to speed and contact such as stolen bases, runs batted in and batting average were the norm. On the other hand, measures of offensive success appeared to fare better in predicting “wins”. They included on-base percentage and slugging percentage.
Bill James developed quite a following among baseball stats 'geeks' by presenting his data and analysis with great wit, insight and frequency. His method described as “Sabermetrics” in reference to the Society for American Baseball Research (SABR) aroused the attention of many gaining momentum far and wide. He was onto something.
His abstracts, full of in-depth statistics compiled from his study of box scores from the preceding season, were coveted in the 1980s by a huge number of like-minded baseball fans. With James, they debated and challenged each other, in essence forming a kind of Wikipedia on baseball performance. Despite his efforts, James could not convince the baseball league owners and managers that his analysis had merit for gauging and guiding performance.
Meanwhile, around 1997, the new GM of the Oakland As, Billy Beane, set about looking for ways to make his team more efficient. He re-examined everything from the market price of foot speed to the difference between the average major league player and the superior Triple-A one. Sabermetrics was part of his tool kit.
In around 2000 the well-known journalist Michael Lewis decided to investigate. His book called Moneyball was subsequently made into the 2011 movie of the same name starring Brad Pit as Billy Beane. As Brad Pitt says to his young data-mining protégé, “We are going to change the game” and so they did.
More recently Harvard and Stanford examined this “disruptive innovation” in a case study spanning the accomplishments of the major baseball leagues from 1998 to 2013. The Oakland Athletics won hands down for increasing wins while decreasing the cost of the wins. The New York Yankees and the Boston Red Sox did quite well with wins but were stuck in the expensive realm.
So what are the takeaways for us not in sports but in a range of organizations where we want to progress, be competitive within our industries or domains and when all is said and done – survive?!
Hans Rosling, the “jedi-master” of animating data, provides some clues in his quest to rid us of our incorrect assumptions about the world. In his November 2013 spirited video presentation, Don’t Panic which can be viewed in full on www.gapminder.com , he demonstrates imaginatively and persuasively that a poor family having a bicycle is a critical tool to lift it out of extreme poverty from $1 to $2 per day toward $10 - a significant difference. Granted access to education, clean water, health care and sanitation are vital too. But what if all of those are there but tough to access?
The poor family aided by a bicycle yields insight into where to zoom in to make progress when there are many priorities. Access to transportation enables the family’s daily routines to take less time, such as travelling miles for water, formerly done on foot, leaving more for other creative endeavours. In metrics terms, from $1 to $10 is the lag indicator (target) and owning a bicycle is the lead indicator (contributes to reaching the target). Put another way, the latter measure (having a bicycle) captures an action that leads to a significant outcome (more money for the family). It compares to on-base percentage in baseball (more people on base increases the probability of home runs).
To arrive at a leading indicator however requires considerable exploration of reality versus the big goals. If achieved, the indicator and its attendant strategies would make a significant difference. Many business authors have written extensively on how to develop “scorecards”. Harvard’s Robert S. Kaplan is one of the most prolific and well-known.
But what if you need a little more hand-holding to sort the wheat from the chaff and not spend a fortune on developing and monitoring a big scorecard? The 4 Disciplines of Execution by Chris McChesney and Sean Covey is a user-friendly alternative, coaching the reader step-by-step.
The failure to execute strategy well is a chronic problem. But if teams can get their heads around the “how to” via an engaging and inclusive process (taking the high level corporate strategy to the realm of front line in a concrete way), then there is hope to up the gains and lower the failures.
The magic in the process is to narrow focus and choose only one or two stretch goals while “the whirlwind” of the daily business goes on. Then, create the “yellow brick road” with built in accountability and tracking which everyone excitedly walks. It’s much more manageable and certain than all those spreadsheets with every single goal and objective noted over multi-years. It’s a great way of “busting” silos too and recognizes the iterative or winding journey of plans. We can only imagine and think so far in advance before unexpected change reaches in to disrupt our ideas.