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.
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