You can collect lots of Moneyball-type data but it still has to be used well

Another report from the MIT Sloan Sports Analytics Conference provides this useful reminder about statistics and big data:

Politics didn’t come up at the conference, except for a single question to Nate Silver, the FiveThirtyEight election oracle who got his start doing statistical analysis on baseball players. Silver suggested there wasn’t much comparison between the two worlds.

But even if there’s no direct correlation, there was an underlying message I heard consistently throughout the conference that applies to both: Data is an incredibly valuable resource for organizations, but you must be able to communicate its value to stakeholders making decisions — whether that’s in the pursuit of athletes or voters.

And the Obama 2012 campaign successfully put this together. Here is one example:

Data played a major role. There’s perhaps no better example than the constant testing of email subject lines. The performance of the Obama email with the subject line “I will be outspent” earned the campaign an estimated $2.6 million. Had the campaign gone with the lowest-performing subject line, it would have raised $2.2 million less, according to “Inside the Cave,” a detailed report from Republican strategist Patrick Ruffini and the team at Engage.

This is an important reminder about statistics: they still have to be used well and effectively shared with leaders and the public. We are now in a world where more data is available than ever before but this doesn’t necessarily mean life is getting better.

I recently was in a conversation about the value of statistics. I suggested that if colleges and others were able to effectively train the students of today in statistics and how to use them in the real world, we might be better off as a society in a few decades as these students go on to become leaders who can make statistics a regular part of their decision-making. We’ll see if this happens…

Sears hopes Moneyball addition to its board can help revive the company

Here is an odd mixing of the data, sports, and business worlds: Sears recently named Paul Podesta to its board.

Paul DePodesta, one of the heroes of Michael Lewis’ “Moneyball: The Art of Winning an Unfair Game,” a great 2003 baseball book (and later a movie) about the 2002 A’s that’s more about business and epistemology than baseball, has been named to the board of Hoffman Estates-based Sears Holdings Corp.

To be sure, he’s an unconventional choice for the parent of Sears and Kmart. But Chairman Edward Lampert is thinking outside the box score, welcoming the New York Mets’ vice president of player development and amateur scouting into his clubhouse…

“What Paul DePodesta … did to bring analytics into the world of baseball is absolutely parallel to what needs to happen — and is happening — in retail,” said Greg Girard, program director of merchandising strategies and retail analytics for Framingham, Mass.-based IDC Retail Insights.

“It’s a big cultural change, but that’s something a board member can effect,” Girard said. “And he’s got street cred to take it down to the line of business guys who need to change, who need to bring analytics and analysis into retail decisions.”…

“Analytics has been something folks in retail have talked about for quite some time, but they’re redoubling their efforts now,” Girard said. “Drowning in data and not knowing what data’s relevant, which data to retain and for how long, is the No. 1 challenge retailers are having as they move into what we call Big Data.”

Fascinating. People like Podesta are credited with starting a revolution in sports by developing new statistics and then using that information to outwit the market. For example, Podesta and a host of others before him (possibly with Bill James at the beginning), found that certain traits like on-base percentage were undervalued and teams, like the small-market Oakland Athletics, could build decent teams without overpaying for the biggest free agents. Of course, once other teams caught on to this idea, on-base percentage was no longer undervalued. The Boston Red Sox, one of the biggest spending baseball teams, picked up this idea and paid handsomely for such skills and went on to win two World Series championships. So teams now have to look at other undervalued areas. One recent area that Major League Baseball shut down was spending more on overseas talent and draft picks to build up a farm system quickly. These ideas are now spreading to other sports as some NBA teams are making use of such data and new precise data will soon be collected with soccer players while they are on the pitch.

The same thought process could apply to business. If so, the process might look like this: find new ways to measure retail activity or hone in on less understood data that is out there. Then maximize a response to these lesser-known concepts and move around competitors. When they start to catch on, keep innovating and stay ahead a step or two. Sears could use a lot of this moving forward as they have struggled in recent years. Even if Podesta is able to identify trends others have not, he would still have to convince a board and company to change course.

It will be interesting to see how Podesta comes out of this. If Sears continues to lose ground, how much of that will rub off on him? If there is a turnaround, how much credit would he get?

Sociologist argues that SATs not the best predictor of college success

In another round of the battles over standardized testing, a Wake Forest sociologist argues that the SAT is not the best predictor of college performance:

His conclusion? SATs don’t tell us much about how well a student will perform in college.

A better predictor of college success lies in a student’s high school grade-point average, class rank and course selection, Soares said…

Soares is editor of a new book, “SAT Wars: The Case for Test-Optional College Admissions,” that takes a critical look at the SAT while calling for a rethinking of the college admissions process…

When it dropped the SAT option, Wake Forest revamped its admissions process, beefing up its written response section and encouraging students to be interviewed by an admissions officer, a move that created a huge logistical challenge for the school.

This is not a small argument: as the article notes, this is a multi-billion dollar industry.

I wouldn’t be surprised if more schools continued to play around with the admissions processes, both to get around some of the difficulties with particular measures but also to get a competitive advantage in grabbing good students before other schools realize what is going on (the Moneyball approach to admissions?).

How statistics may change golf

Statistics are part of many sports and are often used by managers, coaches, and players to make decisions.

Golf is not yet up to par with others sports (see the Moneyball craze in baseball or the efforts of some NBA teams to analyze games) but that moment might be just around the corner, according to Slate:

We’re in a golden age for golf research because the PGA Tour has opened ShotLink’s books to researchers. Two professors at the Wharton school, for example, looked at 1.6 million tour putts and concluded that professional golfers are risk-averse. They examined putts for par and putts for birdie from the same distances and discovered that pros make the birdie putts less often. They suggest that pros leave these birdie putts short out of fear of making bogey, and then calculate that this bogey terror—and the resultant failure to approach birdie putts in the same way as par putts—costs the average tour player about one stroke per tournament.

It’s insights like this that offer the provoking notion that a Moneyball-type revolution awaits golf.

It would seem like an advantage to players to have this kind of data and analysis in hand as long as they don’t completely overrule their instincts for the game. Just because one has statistics available doesn’t necessarily mean they will be used judiciously.

h/t Instapundit