What Data Can and Can’t Do For a Manager

Fortune Interview with M. Lewis

After "Moneyball," everyone in baseball seems to recognize the value of having egghead computer crunchers. Yet Billy Beane's A's continue to outperform. Why? He is still measuring baseball players' value more precisely than other people and buying the ones where the market price was cheaper than their true value. When I showed up, the fattest opportunity was on-base percentage. That inefficiency ended after the book was published, but the A's went looking for other things. I know they had a proprietary system for measuring defensive ability. I've never been allowed to see it.

www.nba.com/search/?text=sports+analytics

Butler University Basketball Coach Brad Stevens is a believer in statistical analysis, which after heavily influencing baseball is making its way into basketball. At home, he pores over statistics almost as much as he does film in preparing game plans. [player] “We know everything we need to about our opponents, all their tendencies are broken down,” the sophomore guard Ronald Nored said. “I honestly believe every time we go on the court, we’re the most prepared team in the country.”

Australian Tennis CEO: “We no longer care what you think, we care what you know, and we want to know how you know it.”

Historically, lots of accounting/financial stuff, little use of statistical methods

Recent years, substantial amount of stat “templates” – SPC; Six Sigma

In cases, not circumpsect application of stats Groopmans-Evidence-Based Medicine

Demand, revenue, cost, productivity drivers

Consumer valuation of product attributes Hiring/promotion practices (actual v. “on

paper”) Sources of quality variation, errors, ethics

violations, unusual risks/expenses, …

Limited only by creativity/imagination

Avery Johnson, Tom Landry – Buy in Recognize varied skills

Data organization/management/basic analysis

Template application Creativity

Beware Blindspots Important v. easy; boiler plate; excluded

variables; low power & null; lack of empowerment; no vetting