Must read for data driven decision makers

Jun 15, 2015 by

Must read for data driven decision makers

For several years now, we’ve been hearing that we should follow that data and the truth will set our businesses free, but one of the chief proponents of data-driven decision making are sports teams. Oakland A’s general manager Billy Beane famously conceived of the idea as described in the book and movie Moneyball.

What Beane did was take a process that was driven by gut, experience and eye balling and tried to apply analytics and order. Instead of drafting a guy based on his looks, you looked specifically at data, and not just any data, but a special kind of analytics developed by Bill James (who by the way now works for the Boston Red Sox).

In 2003, John Henry bought the Boston Red Sox. He was a wealthy man who made his money by making data-driven investment decisions. He decided to apply the same principals to his baseball team, and it worked for a time, better than it did for Beane. In fact, the Red Sox won the World Series in 2004, 2007 and 2013. Beane’s teams have done pretty well over time, but have never won a championship. (The Red Sox actually hired Beane in 2003 before he changed his mind and returned to Oakland.)

This Years Model

That doesn’t mean data-driven decision making is wrong, but if the name of the game is winning, perhaps Beane isn’t doing something right, which brings us to this year’s Boston Red Sox, one of the biggest group of underachievers you’re ever likely to see grace a baseball diamond.

Dating back to 2012, the team is 264-286. They finished last in 2012, last in 2014 and in what appears to be a bit of an anomaly won 97 games in 2013 and went on to win the the World Series.

Last year after an abysmal season, the team made a series of offseason moves including adding three new starting pitchers and giving big fat contracts to Pablo Sandoval and Hanley Ramirez to add some pop to the lineup. Amazingly not one of the guys the team traded for or signed has performed as expected. (Ramirez had a great April at the plate, but has cooled off considerably since and his fielding has been just awful as they tried to convert him from shortstop to an outfielder.)

The Red Sox bet that with some good hitting, some pitchers that induced a lot of ground balls and some good defense, they would win their fair share of games. Unfortunately, that thesis has failed to materialize, at least so far. The hitting has been mostly bad. The pitching has been inconsistent at best and the defense has been mostly poor.

As of today, the Red Sox have a record of 27-37. They have lost six games in a row. They appear to be a team spiraling out of control and headed for another last place finish in the AL East.

As of today, the Red Sox have a record of 27-37. They have lost six games in a row. They appear to be a team spiraling out of control and headed for another last place finish in the AL East.

Enterprise Decision Making

What does this all have to do with the enterprise? We have been hearing for years, that big data is going to be the next big thing for enterprise decision makers. Instead of going with their guts as has been the case for years and years — or as MIT professor Andrew McAfee likes to call it, the HIPPO syndrome (highest paid person’s opinion wins) — we have been told to just look at the data and it will magically transform our businesses and gives us the real answers.

I have consistently heard this theme and heard people even ridicule expertise as a quaint notion. There are no experts really. There is only data and if you follow the data, it will give you the answers.

Well, the Red Sox have been following the data, and over the last several years (2013 notwithstanding) the evidence is not that great. All of this data hasn’t done them a lick of good. Perhaps if you looked at this statistically, this year’s team has failed to play to its ability and eventually it will all even out. I keep waiting for this to happen, but I can’t help but feel there is something to the idea of a winning attitude, something the Red Sox clearly don’t have right now.

Maybe that’s because it’s not all about data. Maybe there is a human element here having to do with judgement, nuance, emotion and understanding. Perhaps even with all the data, a human is making a decision and when other humans are involved (and you add the pressure of playing in the crucible of Boston sports), it doesn’t always work as planned.

Sure, you should follow the data — and I still believe that — but remember sometimes you end up like the 2015 Boston Red Sox and that’s probably not where you want your organization to be.

Posted by for TechCrunch

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