Challenging Times Require New Metrics

It’s the Numbers

The 2014 Major League Baseball season is officially underway, and it is ironic that an obscure statistician from Kansas is making the news, one who was ridiculed for many years.

Today he is a chief decision-maker for the world champion Boston Red Sox, having gained notoriety throughout professional sports – and acceptance to his metrics continues to grow.

On CBS 60 Minutes, Morley Safer interviewed Bill James, a baseball writer, and historian who has written more than two dozen books devoted to baseball statistics, highlighting his unique approach – known as Sabermetrics: the science of why teams win or lose games.

A fair comparison can be made to the retail auto sales and service industry: It’s the numbers, stupid.

Bill James helps the Boston Red Sox decide which players to keep, who and why they play and who gets traded away in the off-season, in order to improve the team’s statistical chances of having a winning year. He also helps them grow champions. But it wasn’t always that way.

Working as a night security guard in Kansas during the late 1970s, James began studying box scores (arguably similar to an RO Analysis). He soon published “The Bill James Baseball Abstract” in 1977, by challenging baseball’s typical metrics of what determined a great player. He argued that it was not wins or losses (for a pitcher), nor hits, home runs nor batting average.

Instead, he created statistical innovations (the new metrics) such as:

• Runs Created: Put simply, hits and walks divided by plate appearances.
• Range Factor: The defensive contribution of a player, assists and putouts divided by games played.
• Defensive Efficiency Record: The percentage of balls in play that a defence turns into an out.
• Win Shares: A comparison of players at different positions.
• Pythagorean Winning Percentage: The relationship of wins and losses to runs scored and allowed.
• Major League Equivalency – A metric that uses minor league statistics to determine how a player is likely to perform in the majors.

For most of his career, Bill James’ ideas were either been ignored or rejected by major league baseball teams. Most teams preferred to follow the maxims that were created decades ago, as well as their gut instincts.

The Red Sox hired James in 2004. Using his ideas, they have won four World Championships.

In our constantly changing automotive industry of customer counts and sales and dollars made, perhaps we need to take a step back and look at new and innovative ways to measure our success, and that of our people. In these challenging times, it requires different thinking along with different processes, to become a world champion.

Think about it.