Is Your Company Missing Out on The REAL Moneyball?

The 2011 movie Moneyball got us all hot and bothered about the use of data to drive breakout performance for a baseball team. I’m still waiting for Moneyball 2 – where a visionary leader uses data to change the effectiveness of his company. Something tells me I’ll be waiting a long time.

What’s good for the Oakland Athletics is good for you too!

Of course, sports data is worlds apart from organizational data. There’s transparency, for one thing. A lot of what a sportsperson does is on display and can be tracked closely. Secondly, there is a clear alignment of interests – the sportsperson, coach, team and franchise all want the ultimate win.

So, tracking input metrics (basic ability, training hours, type of training, etc.) and output metrics (goals, passes, speed, shots on goal, etc.) are watched, parsed, correlated and shared. And then there is the environmental data (location, morale, fan support, weather) etc., a lot of which can and is endlessly parsed to predict future possibilities.

As a sports-obsessed country, we’ve been primed and educated in the language of sports analytics. I’ve now worked in and advised at least 20 companies and institutions – global behemoths, non-profits, and startups. It’s never too much of a reach to get external metrics – for innovation, for example, I like to track what percentage of revenue is driven by new products launched in the last five years as an indicator of ideas brought to market effectively.

However, once I try to get into input metrics – the percentage of concepts that make it to market vs. the total generated and progressed for review – things get murkier. For one, there is less of a discipline in the early stages of ideation monitoring, and secondly, there is less energy and leadership time spent on it. The dollars and the shiny new toy is so much more fun to contemplate than the hard work that goes into getting there.

Yet, innovation metrics are worlds ahead of people management metrics. Here’s how to change that:

Why Aren’t You Using Your Leadership & Management Data?

It’s a rare company that truly mines leadership and management metrics. Companies have made a science of reviewing revenue and Cost Of Goods. SAP and various ERP systems can tell you exactly how many widgets and man hours go into the last car/headphone/jar of grape jelly produced. How about the quality of management that went into crafting those products and services? A plethora of information exists on what makes for good management and great teams.

It’s often not too much of a stretch to identify the exemplary employees and managers in an organization – but rarely do we take a data-focused approach to understanding and using those insights. For example, it’s not a stretch for us to posit that managers who have high retention rates, larger percentages of team members promoted relative to others, higher revenue and productivity metrics, higher diversity, greater throughput of ideas, and more invitations to advice on cross-functional and cross-company issues are possibly doing the right thing. You can easily see how all of these metrics can be captured and surfaced – wouldn’t it be useful for each employee to know where they stand against the exemplars?

Arm Your People With Their Data.

We’re good about giving our 11-year-olds a sense of where they stand against their peers in their proficiency at various subjects, as well as tracking key input metrics like class participation. Isn’t it only fair that we provide that kind of transparency to managers in our organizations, given how much of an impact they have on the bottom line. We’ve known the key drivers for a while. For example, in the 1998 study of Sears by Rucci, Qirn and Quinn, they found that when employee satisfaction improved by 5%, customer satisfaction improved by 1.3%, which led to a .05% improvement in revenue. At $50 billion annual revenue for Sears at that time, that came to an extra $250 million in sales. A 2014 study by Harter and Beck has shown that four people practices related to managers – selecting managers who are engagement-oriented, the manager’s ability to hiring for skills, feedback to their teams on strengths, interest in people management – can drive up to a 59% increase in revenue for the team, ergo the company.

What’s Stopping You Now? How to Get Beyond It.

With that kind of impact possible, why haven’t companies stepped up to the plate? They engage in once-a-year polls, of course. But how about using the great analytic tools we now use on consumers, internally? If a company can truly create a trusted relationship with managers, where the focus of such tracking is on development, rather than being punitive, perhaps we can use email tracking, sentiment tracking, feedback loops, etc. to better capture and understand their effectiveness. I’m not talking about the kind of radical transparency that can sometimes drive vulnerability – like Buffer.com’s salary transparency or Ray Dalio’s principles – this is more about giving your employees, managers and leaders useful and current data about their own skills, practices and abilities, so that they can strive towards excellence and a bigger impact.

There’s a lot of $$ at stake here! Let’s take your best marketing analytics people and focus them on your managers for a quarter. You’ll be surprised how much change you can drive!