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Assessment & Evaluation

Published December 2007

Analytics in Talent Management: The Sports View

Chris Moore

How do executives for major league ball clubs assess the value of their talent? They play the numbers game. Using numbers, they manage talent to drive the player and team stats in the right direction, and if they're successful in doing so, they have a winning season.

Managers and coaches look at all types of statistics on their players: batting average, runs batted in (RBI), on-base percentage, slugging percentage, strikeouts, stolen bases and more. For specialized roles, such as pitchers, they collect and analyze more statistics, such as earned run average (ERA), innings pitched, complete games, shutouts and saves.

Billy Beane of the Oakland A's is perhaps the greatest success story of a general manager who carefully interprets the stats to consistently build a low-cost, high-performing team. The book Moneyball, by Michael Lewis, details Beane's methodical process of statistical analysis, negotiating, shrewd decision making and a bit of luck throughout the 2002 season. His efforts resulted in a spectacular winning record, and he had the smallest player payroll of any major league baseball team.

Many say that Moneyball is as much about talent management as it is baseball. Year after year, Beane seems to beat the odds, not the bank, and get his team to the playoffs. Wouldn't your executive team like you to have that kind of low-budget success analyzing and managing your talent each year?

Beane and followers employ a form of analytics called sabermetrics, the analysis of baseball through objective evidence, especially baseball statistics. It answers questions such as, "Which player contributes most to the team's success?" or "How many runs will player A hit next year?" and "Does player A perform better than player B under certain circumstances?" Sabermetrics also can help determine past and future player value.

Traditional baseball analytics focus on metrics such as batting average, the number of hits a player makes as a ratio of the number of times at bat. But teams don't win based on the number of hits they make. They win based on the number of runs they score. So a player's ability to make more hits is not necessarily the best predictor of success for the team. Rather, the player's ability to help the team score more runs turns out to be a much better predictor of success. Based on this logic, the more capable a player is at helping the team score runs, the more valuable he is.

Like the baseball team, corporate organizations also have players. Our players, or employees, perform specialized roles, but they need to work together as a team for us to be successful. Across our teams, there are players at varying skill levels. Let's call our players our performers. Our top and low-end performers are usually highly visible. However, the performers in the middle are typically hard to single out, because they represent the majority, and their performance numbers don't spike on or off the charts.

If you take a close look at the performance statistics (i.e., the numbers) you can quickly identify the undervalued performers. Their contributions provide consistency and stability for your team. If managed properly, they have the potential to be tomorrow's top talent.