Saturday, March 26, 2011

Differentiating Sports Analytics

I had a conversation recently with USF analytics professor Vijay Mehrotra that resulted in Prof Mehrotra's column in January issue of Analytics Magazine. As part of this conversation, I discussed with Vijay the general issues that arise when trying to implement an analytics program in a sports organization. After sharing my experiences, Vijay shared his wealth of experience in logistics and analytics in a variety of business sectors and we were both struck by the similarities. A very common story in sports and business in general, is for leaders in a business with a wealth of domain knowledge or faced with being told by people who have not have near the experience or "feel" for the industry how to change the way they operate. Understandably, domain experts are hesitant to embrace insights and new management styles from those that have not had the same deep experiences in the industry that they have.

This story in sports of course is a coach or general manager being told how to change their strategy or which players to add to their roster based on a series of calculations that they may or may not understand. For a business leader, the story is a CEO being told that their past "gut" level decisions have often been wrong and that they should change how they view their industry by looking more closely at information that is the result of a series of calculations that they may or may not understand. Clearly the data is different and the techniques used may be different, but there are many overlapping principles in how to both technically and culturally implement a strong analytics program in sports and in other industries.

The three elements of analytic systems (data management, predictive analysis, and information systems) are the same in sports and other industries. Many of the cultural hurdles are also the same, so is sports analytics a specialty within the general field of analytics or is it a field unto itself that draws on a similar set of tools? The answer is yes. Sports analytics is simultaneously a specialty within the broader field and a unique field that draws on a similar set of tools.

Explaining how sports analytics can occupy that space, lets explore why it is important to understand the uniqueness of sports analytics as a field. An analytics program has the highest probability of success when, going in, all parties involved have an understanding of the possibilities and value of sports analytics. If sports analytics is viewed as either a specialty or as completely distinct, some of the potential value of the program can be reduced.

Sports Analytics as a Sub-Field
When sports analytics is viewed as a specialty within the field of analytics, there is a tendency to seek out experts in analytics and ask them to build a product for a sports organization. The basic problem with this approach, is that consultancies that specialize in building analytic systems such as Accenture, have built their businesses by building systems that help managers maximize revenues. This can take many different forms and different industries have their own components, divisions, and peculiar industry structure, but they are all focused on profits. While I would never argue that professional sports teams are not trying to maximize profits, the sport side of the organization tends to be evaluated not on a profit basis, but on a wins basis.

Coaches that win keep their jobs regardless of how profitable the larger organization is, general managers who build consistent winners become presidents of the organization, regardless of their ability to manage the business side of the team. Therefore, the analytic systems that get produced for the sport side of the organization need to be focused on maximizing wins, and the difference between objectives (wins and profits) is not trivial.

Wins vs. Profits
Wins are a fixed resource. In the NFL for example, there are only 256 games and each team plays only 16 games. A win for one team means a loss for another. Each game is also a binary event, you either win or you lose. This creates a very different set of of objectives and manner of evaluation. In business, a project can be evaluated on a clear and consistent basis: does the investment in the project have a expected return on the invested resources that is high enough. On team, the question is not what kind of return on invested assets does an activity have, but rather can this activity increase the odds that the team wins one more game? The binary nature of the payoff has a significant impact on how information is used, the types of questions that get asked, and the impact that information can have.

Type of Information
The other major difference between sports and most businesses is the type of information that is used. Even the least analytic CEO has read a P&L, they have seen and used quantitative information  on a regular basis through their careers. While coaches and GM's have certainly seen box scores their entire lives, the information that is far more important to them is the film. Coaches review film for tendencies and strategic information and play personnel folks watch hours and hours of film to evaluate players. This creates a unique situation in which the best analytic systems need to incorporate film as an additional type of data and that any new metrics that are developed need to jibe with what the decision makers see on the film. In once respect the analytic systems serve as a mechanism to help the decision makers more efficiently process the film that they see (ie point them to the most important and descriptive film).
Sports Analytics as Separate Field
The thoughts above may suggest that sports analytics is its own unique field and is only superficially connected to the application of analytic tools in business. This of course overlooks the commonalities of the fields and how these commonalities can be utilized to increase the effectiveness of both fields. The danger for the fields is that they, like information in many organizations, become siloed and the advances in one field never get leveraged to advance the other. While the data and objectives may be different, there is significant overlap in many of the tools and techniques used throughout the process.

Data visualization, for example, is a rapidly developing field and there is significant experimentation going on in business, academia, and sports. Feedback from end users will be gathered on the effectiveness and utility of various techniques in all areas, and only if the fields are connected, will these advances be rapidly deployed.

So in the end sports analytics is the same as regular analytics, but different.

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