The trickier part of Moneyball: Understanding the price of performance

I'm out at the HireVue Digital Disruption event in Park City, Utah (I know what you're thinking, your humble correspondent sure has it tough), and at the opening general session the audience was treated to a talk by Billy Beane, GM of the first-place Oakland Athletics, and more famously, the subject of the book and movie Moneyball.Park City, UT

By now just about everyone in the HR/Talent space is familiar with the Moneyball story, as Beane and his former assistant at the Athletics, Paul Depodesta have both been pretty regular fixtures on the HR conference speaking circuit these last few years. The story, even if getting a little familiar, still resonates, and having the hook of a movie based on the Moneyball book and starring Brad Pitt has helped to extend the life of the story somewhat.

But it seems to me that while everyone in HR now knows the Moneyball story, that mostly we kind of only accept it at the first level, i.e., that HR needs to apply more data and analytical tools towards the management of talent in the organization. How Beane and Depodesta took a data-driven approach to managing talent at the Oakland A's was the fundamental message of Moneyball, but it was not the only message.

The more important, and much harder aspect of Moneyball is the concept of the value and price of performance. In his talk yesterday at the HireVue event Beane showed a chart that explained this concept playing out in decisions about major league baseball pitchers. A few years ago Beane traded one of the top pitchers in the league but who had a $6M or so salary and replaced him with a pitcher that had just about equal success on the field, but who had a salary of 1/10th of the guy he replaced. So while the emphasis and focus of the Moneyball approach to talent has been (mostly) about identifying the right data (and tools to analyze that data), that leads to high performance, once you have done that analysis then Moneyball demands you apply that to the costs or price you can or should pay for that performance.

And it seems to me that side of the process, the 'How much are we paying for performance?' question is where the true value is to be found in the entire Moneyball story. In baseball and maybe in your business too, it probably is getting easier to determine what metrics to apply in order to identify and predict performance. But it is much tougher to understand the tradeoffs between costs and performance. Beane and the Athletics continue to succeed not because they still have some secret understanding of what metrics to apply, they stay on top because they consistently find ways to acquire the performance they need at a much lower cost than their competitors.

The focus on the costs and value from performance is why the book was called Moneyball and not Metricsball.

Identifying the metrics is only the first step - knowing how much they are worth, what you can pay, and when to 'sell' an overpriced asset and 'buy' an undervalued one is the real and much trickier lesson from Moneyball. 

Super fast internet and talent strategies

Did you catch the recent announcement on the official Google blog that named the initial short list of US cities that are potentially next in line for the construction and deployment of Google's super fast internet service called Google Fiber?

If you are not familiar, Google Fiber is the search giant's ambitious project to wire up neighborhoods and cities with fiber-basd internet networks that deliver speeds 100 times faster than what most of us have at home today. Now Google is talking about expanding the Fiber program beyond the early projects in Kansas City, Austin and Provo, and has invited cities in nine metro areas around the U.S.—34 cities altogether—to collaborate and participate in an exercise to see what it would take to bring Google Fiber to those cities.

Here is the map of Google's targeted locations, (courtesy of the Google blog):

What can we take away, if anything, about HR, talent, or recruiting strategies from a project like Google Fiber, and more specifically, the locations where Google has or is considering investing time and resources on the Fiber project?

I'd offer a few potential considerations:

1. If you believe talented people will flock towards or be less likely to leave places that are 'Fibered up', then the location choices and deployment of gigabit speed internet networks should play into your talent strategy. You might be able to find talent, especially technical talent, in these locations more easily, and maybe even more cost-effectively than in other places.

2. If you are located in an non-Fiber locale, and are not on anyone's short list for this kind of a project, then you may, eventually, have to make some accommodations on that front. If you are a Chicago company maybe you will one day need a small satellite office in a place like Kansas City, or similarly if you are looking to expand West maybe setting up shop in Portland over Seattle might be the right play.

3.  If you are already in one of the nine large metros that are now under review for Fiber, and for some reason you are not selected, (lack of municipal cooperation, lack of infrastructure, not enough local support), and the Goog decides to pass you by, then you have to think about what that impact might be for you medium and long term. You might have to spend some time 'defending' your city, particularly with relocation candidates, as a progressive and hip place, not some backwater, (I am looking at you Birmingham), that did not make the cut for super fast internet.

I am sure you can think of some other ideas about how, or even if, these kinds of quality of life projects impact organizations and their ability to attract and retain talent. I think too often in HR/Talent we focus so much about what is going on inside our own four walls that we forget that our prized talent, (for the most part), actually has to live and hopefully be happy living, within an hour's drive of the office.

What do you think? Do you care about this or not from an HR/Talent perspective?

But I bet if your city does get Google Fiber you would include that little tidbit in the 'About (insert your city here)' portion of all your job listings.

Happy Thursday!

What Richard Sherman reminds us about high performers

If you are a sports fan, or perhaps even if you are not, you probably heard or saw coverage of Sunday's NFC Championship game, (that is American football for the non-USA readers), and particularly of the epic post-game rant/interview from the Seattle Seahawks' Richard Sherman, a member of the winning team.

To set a little context, in the final stages of the game, the opposition San Francisco 49ers attempted a pass into the end zone that had it been completed would have won their side the game. The Seahawk's Sherman was able to deflect the pass attempt from the 49ers Michael Crabtree and the ball was then intercepted Sherman's teammate, sealing the victory for Seattle.

Check the video of the interview then some comments from me (Email and RSS subscribers will need to click through)

I love this guy. Let's break it down for what is reminds us about people and performance.

1. Some people just want to be a little better than the worst performer in their peer group

You know this guy, he is pretty easy to spot. Never stands out at all, is definitely not anywhere close to being a great performer, but usually does just enough to nose in front of the office's weakest link. He is the antelope that realizes that he doesn't need to outrun the cheetah, he only needs to outrun the slowest other antelope in order to survive. Eventually, he becomes the slowest antelope himself, but that can take some time. They are usually pretty fun to be around though.

2. Some people want to perform at their highest/most productive/most efficient level

This is actually most people I think. They want to learn, want to get better, want to challenge themselves (most of the time). They usually are good to very good performers. They are your 'B' students, slightly above the curve. They are also generally pretty fun to have on the team. They do some really good work and most notably, they rarely make waves. Some part of them sees being the best version of themselves as being a good team player. A team full of 'B' students, in a mature or slower moving market might be perfectly fine for long term stability and performance.

3. Some people want to perform at their highest level, actively seek out who they perceive to be the best performers in their peer group, and do what is necessary to outperform them.

This is our friend Richard Sherman I think. Really driven, consumed with not only becoming the best they can be but also consumed with the measurements that validate they are the best, (and desirous of the accolades that come with being the best). These types stay up at night working, planning, and scheming on how to beat the other guy and are not going to rest until they do. And once they do, they are not shy about telling you about it. We sometimes don't like these kind of guys because, like in the Sherman video, they come off as arrogant, cocky, and kind of unlikable. We chastise them for their hubris and lament that they are not 'team players.' But make no mistake, these are the types that drive progress, at least until they flame out, stop producing the results that led to their arrogance, (while remaining arrogant), and alienate that core group of 'B' students that everyone likes.

Richard Sherman is clearly a '3' on my little scale. Note that in his 25 second rant he hits the two main elements necessary for this kind of mindset approach. He talks about being the best there is at what he does, AND, calls out his competition, reminding everyone that he is aware of who he has to be better than, and that he is not just using some kind of internal measuring stick to judge his own progress.

Not everyone can be a Richard Sherman, but I think every organization needs at least some of that type in order to win. Because in life and in business we like to forget sometimes that winning is not only a matter of being the best that we can be, but also involves beating the other team.

Happy Tuesday. 

HOT SPORTS TAKE: What is more important than culture?

It's been a huge few days in the sports world - with the NFL playoffs over the past weekend, the NBA finally getting interesting, and the wind up of the College football bowl season and final BCS Championship game. there has been plenty of fodder for sports talk shows, articles and columns that feature that essential element of sports coverage these days known as the HOT SPORTS TAKE. 

This is where some blowhard, (in the case of the blog you are currently reading, that blowhard is me), goes on some silly, shouty rant about a coach, or a player, or a team, or sometimes an official about how they variously choked and lost the big game, is actually a terrible, mean, no-good person, and by losing the game and/or being a mean person they have therefore insulted America or tradition or the scared honor of the lunkhead sports stars of a bygone era. The rise of the myriad number of online sports sites has certainly contributed to the genre, but by no means is this a recent phenomenon.

Actually come to think of it, my take probably doesn't completely merit the HOT SPORTS TAKE definition, as I really am not in a snit about any specific player or coach or team, but rather wanted to use a sports analogy (again) to back up one of my workplace/talent management takes from the past. Namely, that in contrast to the tiresome (and incorrect) cult of 'Culture Eats Strategy' I contend, still, that talent trumps everything. Talent is more important than strategy. Talent is definitely more important than culture.

What completely non-scientific and impossible to prove or disprove evidence am I going to cite?

Just a random call to the 'I can't remember which show but they are all the same so it doesn't really matter sports talk show' following the recent NFL playoff games.

(Transcript lightly edited due to my failing memory and to better make the point I am trying to make)

Host: Next up Jim from Hoboken. Go head Jim.

Caller: Hi Mel - I just want to say I hated the body language of the Chiefs/Eagles/Bengals (doesn't matter and I can't remember) at the end of the game. They just don't have a winning mentality. They just don't have any team chemistry. It's like they don't like each other.

Host: Winning mentality? Chemistry? They fumbled three times and had 12 penalties. What's the 'winning mentality' have to do with that?

Caller: But Mel, the play calling was terrible. They gave up on the run in the second half!

Host: They had a receiver drop the ball in the end zone for what should have been an easy touchdown. That play would have put them ahead in the game with less than 4 minutes left!

Caller: And all the penalties Mel. They couldn't seem to stay onside all game!

Host: Their top three lineman were all out hurt and they had to play rookies and reserves.

The reason they lost the game was simple. The other team is better. They have better players. They have more TALENT!

You fans want to go on and on about whether the Quarterback likes the Running Back or the coach's play calling is shaky or there were bad calls by the officials but all that stuff doesn't matter.

What matters, in this order, is Talent first, execution second, coaching and play calling third, and last by a mile is whether or not the guys like each other or chemistry (Note: this is the rough equivalent of 'culture' for the HR types). But make no mistake about it, the team with the most Talent wins these games 9 out of 10 times. 

And don't forget that.

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I continue to believe Talent trumps all - whether it's on the football field or in the executive boardroom.

Great players make great plays.

Happy Wednesday. 

(First official 8 Man Rotation post for 2014 logged)

What if we had fewer managers?

For a few minutes yesterday I dropped in on the always interesting #Nextchat on Twitter which was on the always popular HR and Talent topic of employee engagement. In the discussion most of the comments and observations around the topic of engagement were what we have come to expect, (and know to be true). Nevertheless, there were some excellent insights shared by many of the participants.

But you know the story around engagement, right?

Employee engagement is a reflection of the 'extra effort' people choose to make or not make, bad company culture drives much of the measured low levels of positive engagement, and most interesting to me, that managers are the prime drivers or enablers of engagement in the organization.

If the organization has bad managers, or not enough good managers and then you will have an engagement problem, (and a retention problem and a recruiting problem, and on and on). Managers need to be engaged themselves in order to have a better chance at rank-and-file employee engagement. Managers are often the barrier to engagement, as they simply don't know or realize the importance of engagement in a broader organizational context. Managers are the devil's spawn and their mere presence haunts the hallways of the company headquarters.

Ok, that last comment was not really stated, but you get the idea. The manager as the key to engagement, (and lots of other really important talent management practices), was beat to death.

After watching the discussion carry on in that manner for a bit, I finally (at least to me), offered the only suggestion that might actually have an immediate impact, (not necessarily a positive impact, I admit).

Here it is:

Since 'managers' seem to be the cause of all the disengagement, then what if we simply had way fewer managers? #nextchat

— Steve Boese (@SteveBoese) November 20, 2013

 

I was kind of being a wise guy but not totally.

If (bad) managers are truly such an important driver of engagement and talent management, and we have known this for ages, and at least according to the consistently poor engagement levels we see in many if not most businesses we are doing a terrible job of selecting and coaching these managers, then wouldn't it make sense to simply have far fewer of them?

Find the 20 or 30 percent of the managers that actually are really good at engaging teams, guiding career development, challenging employees to reach their potential, etc. and just let them manage everyone.  Take the rest of the managers that aren't good at those things and either let them focus on the actual work they are good at or let them move on.  Or make them sort of 'technical' managers that don't have the messy 'people' manager side of things and can focus on the work, sort of like how football teams have offensive and defensive coordinators that set strategy and tactics but don't really have to deal with the players on an individual and personal level.

I don't know, it just seems like after years of lamenting about the shortcomings, disinterest, and general imperfections of 'managers'  that at least some of the problems could be solved by having fewer of them.

What do you think?