RBIs to KPIs: 5 Lessons Baseball Can Teach About Evaluation
I don’t think I’m taking much of a risk in saying that all athletes and sports teams use data to win. With such strong emotional and financial incentives to succeed, athletes and teams will work to gain an edge in any way they can. In baseball, in the post steroid era, that means leveraging statistics and analytics. Here are the top 5 lessons businesses (that means you too, nonprofits!) can learn from the way baseball teams have incorporated data into their strategy.
Throwing money at a problem isn’t always the solution
Throwing money at a problem isn’t always the answer; organizations which get creative with their analysis and focus on the metrics which matter can find value in unexpected places. Billy Beane, widely known in popular culture because of the movie Moneyball, succeeded in turning the Oakland Athletics into one of the most cost-effective teams in baseball history. After a change in leadership following the death of team owner Walter Haas, Beane was told to slash payroll. He focused his attention on on-base percentage, leveraging sabermetrics to find value in players while other teams operated on instinct alone. He was able to use his insights to stretch his team’s resource pool and in 2006, the A’s were ranked 5th overall in the MLB while ranking 24th of 30 in terms of player salaries.
Choose your metric to fit your needs
Employ tailored metrics to make key decisions while isolating simple statistics which make for intriguing storytelling. When the management office of a baseball team is making key roster decisions, they may use stats like Fielding Independent Pitches (FIP), Value Over Replacement Player (VORP), and True Earned Runs Allowed (tERA) but the broadcasters and the marketers. Those responsible for hyping the sport and marketing baseball to the public use stats like HRs, Slugging, Ks, and “The Magic Number” (which determines how close a team is to making the playoffs or winning a division). While they’re not in-depth enough to make the types of decisions which will win championships, these stats tell a story and get fans invested. Stories elicit emotion and action, which gets fans to buy tickets and grantmakers to fund new initiatives.
Develop a strong data culture
A strong data culture is critical to future organizational success. Organizations with good data cultures measure their impact, get creative with metrics, and are honest with their data. Baseball’s data culture is second to none in the sports world. The sport is wrought with those attempting to invent new statistics and/or improve upon the classics all to gain an edge. Professional managers and fantasy sports datamancers alike routinely experiment with statistics to extract just a bit more information. For example: Earned Runs Allowed (ERA) was tweaked to create True ERA (tERA). tERA incorporates unique aspects of the game to reward pitchers who force groundballs while negating the effect of poor fielding choices which gives the metric more depth than traditional ERA.
Baseball’s data culture is represented by how passionately fans and professionals discuss, augment, and obsess over statistics. Data analysis has been so firmly incorporated into the culture of the sport that its utility continues to improve in such a manner. Baseball’s granular, exhaustive data collection promotes this type of data culture. Your organization likely has rich data sets as well, ready for analysis. The key is setting the right motivation. In baseball it may be winning a game, dominating a fantasy league, or accurately comparing the best sluggers from bygone eras. In your organization, find a way to tie the use of data to achieving your mission, empower your teams to make decisions based on statistical analysis, and share successes to build momentum; it takes time, baseball’s had hundreds of years… keep with it.
Use your data when strategizing
Intuition will only take a company so far; trusting in your data can provide counterintuitive insights and give your organization an edge. In baseball, strategies and tactics are informed largely by data. Up until a few years ago, a common practice in baseball was to tell hitters to “get on top of the ball” which causes the ball to “launch” from the bat at a more shallow angle resulting in line drives and ground balls. But, the data show that if a ball coming off a hitter’s bat is at an angle between 25 and 35 degrees to the ground, it has a higher probability of resulting in a hit (check out this great visualization by the Washington Post). Knowing this, hitters across the league have been adjusting their swings, achieving a huge boost in home runs. Players know that slugging (hitting the ball well for doubles, triples, and homers) makes them valuable, and teams know that runs bring wins and fans, which in turn bring success. With the right data, organizations can feel confident in changing their strategies and tactics. Go ahead, disrupt the status quo! When you trust in your data you reap the rewards.
Data’s not everything, there’s always an x factor
Statistics are tools, and like all tools they have limitations. Traditional metrics can struggle to measure intangibles like grit, compassion, and institutional knowledge. Ken “The Hawk” Harrelson, the announcer for the Chicago White Sox, coined the satirical statistic tWtW or “The Will to Win”. Harrelson, a veteran of the sport, decried how management decisions based on metrics alone were costing baseball players their jobs. As a fan and geek, I’ll respectfully disagree with The Hawk, I’m in favor of using advances in analytics to advance the sport. That said, his viewpoint is not without merit: It’s important to measure what matters, be it batting average, sales conversion, grants won, or lives changed but it’s also important to recognize the intangible, the x factor, be it organizational culture, brand value, unique circumstances, or the will to win.
Is there another business lesson you’ve learned from baseball? Let us know!