Why when it comes to success, you need statistics
- Credit: © Thousand Word Media
Gut instinct may be a powerful thing, but when it comes to proven success, what you need is statistics. Lots of them. Nik Venios, from innovation agency BEAF, explains why
No, this is not an article (solely) about Brexit, it’s more about Black Swans. A Black Swan, as characterised by the NY Times, has three characteristics: “First, it is an event that is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”
If you Google Brexit, there are hundreds of articles saying it was a predictable outcome, but I remember waking up after the vote and not believing what I was reading. Seemed like a Black Swan to me.
But could Brexit actually represent an opportunity? Will we see companies doing more with less, creating more opportunity because of more barriers and getting more innovative because exporting goods to Europe means we are less competitive?
In business, constraints and a lack of resource, are more of a gift than a hindrance. Having a disadvantage is what drives people to achieve. It is the start. It drives people to think differently.
A good case of thinking differently is evidenced in the film Moneyball, which is based on a true story of a Black Swan event. Brad Pitt plays the part of Billy Beane, General Manager of the Oakland Athletics Baseball team. The Oakland Athletics were a sub-par (at best) baseball team. They were the detritus of the baseball league. They didn’t have the luxury of a huge war chest, like the other clubs and their players even had to pay for their own soft drinks from a vending machine in the changing rooms. The team also lacked prestige, and as a consequence, attracting any top playing talent was a tough ask.
At the start of the film, Billy Beane and his scouts are sitting around the table trying to work out who to draft into their team.…His insightful scouts would say: “We should buy this player because he has a good swing”, “He can run like lightning”, “His wife is a six out of 10 at best, forget him, he has no confidence”, “He has a good batting average”.
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For 150 years, most baseball scouts had picked and dismissed players on their gut instinct. Everybody in baseball was trying to win the championship by doing what Billy’s scouts were doing, competing with one another in order to pay millions of dollars for the same over-hyped players.
Billy recognised that their huge wealth, prestige, arrogance and their 150-year-old scouting methods were their weakness.
Billy hired Harvard economics graduate Paul DePosta to start looking at players through statistical analysis - sabermetrics, to be precise. This allowed him to build a team around statistics, and not gut feeling.
Because Billy was thinking differently to all other managers, all the players Billy was buying were massively undervalued, underrated by other teams.
Billy’s team lost 14 of their opening games. When the scouts and management team were trying to stop his sea change in player selection, Billy remained resolute and stuck to using statistics to inform player selection. The team then won 20 consecutive games and the American League Championship.
Eighteen years on from Billy using statistics, every team in sport and business is at it.
Before Liverpool’s game with Wolves in the FA Cup on January 7 this year, Liverpool’s head of statistical analysis tweeted that he hoped Liverpool would lose so that they could reduce the player load (the number of minutes players were playing) to reduce the chance of injury, so the squad could commit their best players to the Premier League title chase. Statistical analysis, it’s so obvious isn’t it?
So, what can you achieve with nothing but barriers? Anything.
If you’d like me to show your team a process for creating moonshot ideas for new processes, products and services, then I would love to have a call with you. Visit beaf.com or call me on 01242 420726.