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Gary Cokins
Gary Cokins
Founder and CEO - Analytics-Based Performance Management LLC

Analytics-Based Performance Managent LLC
Manager, Performance Management Solutions

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Sports and Analytics – A Parallel to Business?

Posted almost 11 years ago

There seems to be a growing interest in applying analytics to sports. One example is the popularity of the 2003 book Moneyball that describes the depth of analytics that general managers like Billy Beane of the Oakland Athletics apply to selecting the best players, plus batter and pitcher tactics based on the conditions of the team scores, inning, number of outs, and runners on base. I expand on this trend in an article titled Baseball + Analytics = Improved Performance. Why might this interest be?

Perhaps it is because people are so stressed with their hectic workday and family responsibilities that taking interest in sports events is a great release of tension. (Of course there are the gamblers, but they are a subset.) Can we detect from this trend of sports analytics the application of analytics in business?

One of my co-workers at SAS, Retha Keyser, recently shared with me an astute observation on how managers mature in applying progressive managerial methods. She noted that roughly 50 years ago, CEOs hired accountants to do the financial analysis of a company, because this was too complex for them to fully grasp. Today, all CEOs and mainstream businesspeople know what price-earnings (PE) ratios and cash flow statements are and that they are essential to interpreting a business’ financial health. They would not survive or get the job without this knowledge.

Retha then recognized that 20 years ago, CEOs of companies did not have computers on their desks. They did not have the time or skill to operate these complex machines and applications, so they had their secretaries and other staff do this for them. Today you will become obsolete if you don’t at least personally possess multiple electronic devices such as laptops, mobile phones, BlackBerrys and PDAs to have the information you need at your fingertips.

There are hundreds of examples of applying analytics to sports. One I recall is the IT analyst Steve Miller’s solution to debunking a conjecture of his son’s friends that a certain university had low academic standards and thus fielded better athletes. Steve’s article Yuletide Lite Plus a Few Graphs describes his solution.

You cannot manage what you cannot measure. Raw data leads to information. Information can then be analyzed for decision making. Competency with analytics will surely provide a competitive edge for organizations that these skills with workers at all levels.

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