September 15, 2023
Bruce Schoenfeld’s Game of Edges: The Analytics Revolution and the Future of Professional Sports traces the impact of numerical analysis on sports, from the Moneyball days of the 1990s Oakland Athletics; through the 2000s curse-breaking Boston Red Sox; to Liverpool Football Club’s use of predictive analysis; to the NBA Golden State Warriors’ whole-business embrace of the analytics revolution.
A couple of passages stood out to me from this book so far, as I consider my own forthcoming book, Fatal Certainty: How a Cult of Prediction Made the 21st Century an Era of Strategic Shock, and How Rigorous Imagination Could Bring Us Back. (Full disclosure: Bruce and I were roommates in college, and I am a big fan of his writing. And of sports and sports analytics.)
The first was about Joe Lacob, the executive who bought the Golden State Warriors of the NBA and turned them into the winningest franchise in the league.
“He told me that he considered himself one of the 10 best blackjack players in the world. ‘I shouldn’t say this,’ he added, ‘but I’ve won over $1 million at one sitting nine times.’ As in gambling, there are no certain outcomes in sports, which is exactly what makes them worth watching. Whether you’re playing pickup basketball on a Tuesday morning or hoping to turn a substandard NBA franchise into a champion, all you can do is try to increase your chances of getting the outcome you desire…. Lacob had a knack for process. For everything he did, he had worked out a system. … When he goes to a casino now, his blackjack sessions aren’t certainties, but Lacob has far better odds of succeeding at them than anyone else at the table. His purchase of the Warriors was basically the same thing. He counted the cards and played the odds. And he won.”
(Excerpts From Bruce Schoenfeld, Game of Edges: The Analytics Revolution and the Future of Professional Sports https://books.apple.com/us/book/game-of-edges-the-analytics-revolution/id6443752824)
Many people think that the sort of analytical “process” Joe Lacob used to transform the fortunes of the Warriors is readily translatable to any arena – business, government, foreign affairs, war, entertainment, you name it.
Certainly every business has aspects that demand analytical rigor. But the strategic realm usually demands something very different. The thing about sports is that they are somewhat of a closed system – a lot like blackjack. The rules are set. The NBA will not suddenly be operating unexpectedly under completely different rules next season. Opponents will not be permitted to tackle players dribbling the ball, or stand on the backboard with their hands over the hoop. Basketball, baseball, football, soccer – they have the luxury of knowing that the game their team will be playing in five years will closely resemble the game they are playing today.
This is not true of most businesses or realms of work. Whole industries tend increasingly to be swept by tsunamis of change arising from completely unanticipated quarters. In the meantime, too many leaders spend too much time creating single-point forecasts of their futures, as if they are playing basketball or blackjack. And the whole time, reality was about to swap their basketball game for an MMA cage match, or their blackjack deck out for a pile of tarot cards.
Most people think there is nothing that can be done about this: predictive systems, “processes,” are the only way to deal with strategic uncertainty. They feel that it’s predictive analytics, or nothing. But they are wrong. The only way to get your arms around true strategic uncertainty is through rigorous imagination: imagining the full range of plausible future states of the critical elements of your world of work, and creating plans that can deal with any of these plausible large-scale futures. This won’t guarantee that you will anticipate absolutely everything that could happen; but you will anticipate far more than otherwise, whereas trying to predict the fundamentally unpredictable, to eight decimal points of precision, absolutely guarantees that you will be wrong.
Linear extrapolation foreshortens strategic vision and limits your ability to generate options for your organization. The aim of rigorous imagination is to create a sophisticated vision of the future, one that offers a larger pie than right now. Another passage of the book is about Steve Ballmer, who bought the Los Angeles Clippers in 2014. By this time, the opportunity to buy a professional sports team for a pittance, apply analytics to its on-court performance and its business side, and watch the value soar had seemingly passed. The previous owner, Donald Sterling, had been forced to sell the Clippers; he had bought them for a mere $12.5 million, but was being “punished” by being forced to sell the team for $2 billion.
Ballmer had a vision, however, and that made the staggering price tag seem to him to be a bargain:
“’What Steve loves is big ideas,’ says Lisa Brummel, a former Microsoft executive vice president who left the company in 2014 and is now part owner of the WNBA’s Seattle Storm. ‘If you’re not thinking big enough, that’s almost as bad as not having the proper analytical thought behind your idea. And if you are thinking big, think even bigger.’”
Even in sports, strategic vision may count for more than mere numerical analytics.
