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6/10/2014
12:26 PM
David Wagner
David Wagner
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World Cup Management: Data Or Intuition?

Data-driven management is all the rage in World Cup soccer, baseball, and business. But where does that leave intuition and experience?

The World Cup starts this week, and beyond the drama of the games themselves, another drama will be playing out on the sidelines: data-driven decision making versus management by experience. This isn't a battle reserved for sports. It is going on at the enterprise level, as well. With big data sets becoming increasingly common, more managers are forced to decide if they're going to respond to or ignore the data.

Sports is an excellent microcosm for this kind of decision making. It is made up of discrete decisions whose outcomes are known relatively fast. If I try to blitz in this situation, is it more or less effective? Should I start this player or another player? Every decision can be mapped back to decisions made in similar situations across hundreds of games and parsed to the most minute detail.

It's more difficult in business, because it often takes months or years to determine the outcome of a decision, and there is much more "noise" in the signal. In soccer, for example, it is easy to use data to decide that, if Player A scores 40 goals against poor competition, he may not be as good as Player B, who scores 20 against the best teams in the world. In business, you need to account for variables such as economic conditions, marketing, competition, unforeseeable circumstances (including major weather events or political instability), and countless other factors.

So the drama playing out here is objective data-driven decision making versus experience and intuition. Or, to put it more simply: robot vs. human. Or even John Henry versus the steam-powered hammer. Is there a definitive answer? You'll probably be surprised by what I suggest.

SAP is helping the German World Cup team by providing them real-time data based on video analysis from cameras placed on the field. Many soccer teams, and even sports pages, are using heat maps to analyze the movement of players around the field. With video, heat maps, and other analytics, teams can gain advantages and help players reach their potential. How much? In one case, enough to win a championship.

[Want more on SAP's big data angle on sports? See SAP Preps Super Bowl 'Stats Zone'.]

Recently, top English team Manchester City's data experts tried to convince their manager that inswinging balls (which curve toward the goal) were more effective during corner kicks than outswinging balls (which curve away). The manager tried it, and Manchester City went on win the Barclays Premier League and lead the league in penalty kicks.

Problem solved, right? Analytics wins.

Not so fast. Manchester City is no stranger to success. The previous year, the team came in third in the league and won England's most prestigious tournament, the FA Cup. It has a very rich ownership that has pumped millions into the team to buy the best players in the world. How much more, exactly, did the decision to use inswinging corner kicks affect the team's success?

Consider the famous Moneyball story, where celebrated Oakland Athletics GM Billy Beane got a team with a small payroll to the brink of the World Series before losing. Beane famously said, "My [expletive] doesn't work in the playoffs." Why not?

For one thing, consider that, regardless of how they use analytics, some teams are using a different advantage (in this case, money) to succeed. For another, remember that the playoffs are a selection of the best teams. It stops mattering how the teams get there. In fact, the whole Beane quote, which is often not used, says, "My [expletive] doesn't work in the playoffs. My job is to get us to the playoffs. What happens after that is [expletive] luck."

What Beane is really saying is there is noise in the signal. A more sophisticated way of saying it comes from Nate Silver, famed political and sports analyst from FiveThrityEight.com, when he says of big data, "Most of the data is just noise, as most of the universe is filled with empty space."

Silver simultaneously destroys and defends big data with a single stroke. Sure, most data is garbage, but the best data is a star (literally and figuratively, in the case of this quote). The right decision based on the right data is a competitive advantage. And that's what CIOs and IT pros want to do -- serve the right data for the decision to be made.

But here's where it gets tricky. The difference between sports and business is the difficulty we have in picking the right data. In sports, you've got hundreds of test beds, essentially sand boxes where other managers made decisions you can test against. There are two ways to get good datasets to managers in business settings. The first way is essentially intuitive management and then going back and justifying the data you used after a success. The second is stripping out as much data as possible to make it easier to understand. And that winnowing is going to be done mostly by intuition, so we're back to square one.

So am I telling you to ignore data and go with your gut? No, I'm not doing that either. Clearly, there are sports teams (The Oakland As and Manchester City, to name two) that use analytics to gain an advantage. In fact, I'd go so far to say analytics are now table stakes in sports and business.

I'm saying that, to make a good data-driven decisions, you need good data, and good data is found, not in its bigness, but in its rightness. And that's going to take your intuition, whether you like it or not, to figure out what's good and what's bad. The idea of the dispassionate, objective, data-driven manager is not going to work. The robot still can't outthink the manager.

But at the same time, you can't assume your intuition is enough. The best managers figure out the data they need to make a great decision by intuition and business experience. But then, they let that data help them make the decision. Bad managers make a decision and then find the data that confirms what they were thinking. The difference is profound, and it is going to help some manager win the World Cup and another manager drive a company to success.

So, speaking of that World Cup, who do you think will win? Who are you cheering for? Silver is picking Brazil. I'm calling Germany for the Cup, but I'm pulling for the US and Italy (long story I'll share in the comments).

And what do you think about data-driven management? How do you pick the right data? Can you? Can analytics replace management? Are you data first or intuition first? Comment below.

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David has been writing on business and technology for over 10 years and was most recently Managing Editor at Enterpriseefficiency.com. Before that he was an Assistant Editor at MIT Sloan Management Review, where he covered a wide range of business topics including IT, ... View Full Bio
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Thomas Claburn
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Thomas Claburn,
User Rank: Author
6/10/2014 | 3:59:00 PM
a better test for big data
The Manchester City story is interesting. I wonder though whether this one anecdoate isn't cherry-picked to illustrate the value of big data. Do we have a broad enough set of example teams using such data to conclude that it improves outcomes?
David Wagner
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David Wagner,
User Rank: Strategist
6/10/2014 | 4:01:57 PM
Re: a better test for big data
@Thomas- They no doubt have plenty of game data on corner kicks. Thousands of games across dozens of leagues with corner kicks analyzed both via video and through chips int he balls. 

The questions that seem difficult to answer are a) Does that alone move you from a 3rd place team to a first place team? b) Once everyone has the data, does it change? c) Even if it doesn't change (say it is just inherent to the game) how quickly is the advantage eroded by everyone copying?

It is a similar issue that companies face when they innovate and people quickly copy their efforts.
Lorna Garey
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Lorna Garey,
User Rank: Author
6/10/2014 | 4:40:58 PM
Whose intuition
The problem to me is that deciphering signal from noise in big data sets is not a job for IT. It's a job for someone intimately familiar with the business. However, how often is it someone in IT deciding what data feeds to add to a dashboard?
David Wagner
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David Wagner,
User Rank: Strategist
6/10/2014 | 4:44:43 PM
Re: Whose intuition
@Lorna- Exactly. Which is why management will never really die in the face of data. I think data scientists working for IT can help, but they can never replace the understand of the business. As with everything else in IT, it should be there to serve and transform the business, not act on its behalf. 
jastroff
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jastroff,
User Rank: Ninja
6/10/2014 | 5:21:13 PM
Meet the New Game, Same as the Old Game
>> I'm saying that, to make a good data-driven decisions, you need good data, and good data is found, not in its bigness, but in its rightness. And that's going to take your intuition, whether you like it or not, to figure out what's good and what's bad.

>> But at the same time, you can't assume your intuition is enough.

@dave  --  It sounds like you are looking for the perfect world. Forget Billy Beane. Beane is now Brad Pitt. Here's a quote from Joe Ripp, CEO, Time Magazine:

>>"I can't fix it," Mr. Ripp has said repeatedly in meetings with senior managers. "You have to figure out a way to fix it."

That's yesterday, today, and tomorrow.
LUFU
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LUFU,
User Rank: Strategist
6/10/2014 | 6:03:48 PM
Ja Wohl Deutschland!
Well, SAP just alienated some of their World Cup customers by helping out Germany. Maybe Larry Ellison should kick in some support for the US team to balance the playing field. Or they could  throw-in some pro bono consulting support to Ecuador (#32 rank) to demonstrate real-time data management. Just a thought.
David Wagner
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David Wagner,
User Rank: Strategist
6/10/2014 | 6:14:07 PM
Re: Ja Wohl Deutschland!
@lufu- I suspect they'd help anyone who paid. But this does bring up the story I promised to tell about why I cheer for Italy.

Back a few World Cups ago, the US was on a little bit of a surprise run while I was living in Europe. The World Cup is a whole different level of reality in Europe. I watched most of the games in town squares across the continent with thousands of other fans watching big screen TVs. There was a crazy amount of singing and dancing and chanting. It was quite awesome.

However, while we were in Italy, the Italians were shockingly eliminated. We left the square (I think it was in Naples) and let the poor Italians mourn. We went into a restaurant that was entirely empty except for us. There were 8 servers (clealry they were expecting a celebration rush) all in the restaurant just looking sad. Then one of them came up to us and said, "Now that the Italians have been eliminated I'm pulling for USA to win the World Cup. Your team is very nice. You play the game very well."

In a moment of sports mourning, a perfect stranger took the time to say something nice about my team. And needless to say, Americans tourists aren't welcome everywhere. So unless it is the US vs Italy, I always cheer for Italy for a nice waiter at a little restaurant of a town square in Italy. 
LUFU
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LUFU,
User Rank: Strategist
6/10/2014 | 6:56:47 PM
Re: Ja Wohl Deutschland!
@David - I always get the sense there is more "joy" in fans (excluding the hooligans) for football AKA, soccer in the US, than other sports. The first time I got the sense of the game and its relevance was back in '78 in an Istanbul cafe without about 100 people congregating around a small black and white TV watching Argentina vs The Netherlands. None of us at the cafe were from those countries but everyone sided with one team or the other and were rooting them on with fervor and enthusiasm. It was a definite worldwide event.

Another time when the US was hosting the World Cup in '94, I was working near Los Gatos in California and that's where the Brazilian team was staying. Every night was Carnivale in Los Gatos with streets, bars, and restaurants just packed with Brazilians, fans, and a party-till-the-cows-come-home joie de vivre the town never experienced before or after.

But can we can the Vuvuzelas?
David Wagner
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David Wagner,
User Rank: Strategist
6/10/2014 | 7:08:40 PM
Re: Ja Wohl Deutschland!
@lufu- I like the vuvuzelas. :)

Yes, I agree. There is a real joy and camraderie around soccer. I like the singing. I especially like how the Arsenal fans sing "You Never Walk Alone" win, lose, or draw. It seems like a nice sentiment. As long as there are Arsenal fans none of them is alone. 

OK, I'm getting overly sentimental about soccer now. :)
LUFU
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LUFU,
User Rank: Strategist
6/10/2014 | 7:11:06 PM
Re: Ja Wohl Deutschland!
Ha! An Arsenal fan will know they are never walking alone when they have someone blowing a Vuvuzela in their ear!
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