The Right Numbers

At a conference many years ago, during an era when CIOs were just beginning to worship the god of Metrics, I heard a speaker offer the atheist viewpoint that “if you can’t tell whether IT is bringing value to your business, you’ve got way bigger problems than any program of metrics can solve.”

That statement resonated with my contrarian instincts. CIOs were then getting themselves in a twist, developing highly introspective measurement initiatives to assemble proof of IT’s value. But, as the atheist went on to say, when your boss starts asking for proof of value, that in itself is a pretty good indication that you’re not delivering enough of it. Worse, if you’re preoccupied looking inward while your competition is aggressively looking outward, you can wind up behind the marketplace curve, having paid too much attention to the wrong things.

But lately I’ve unclenched in my dour view of matters metrical. When chosen wisely and applied judiciously, metrics can serve as a management and education tool that both powers better decision making and gives other executives a keener understanding of the value security brings.

This month, Staff Writer Thomas Wailgum offers inspiring examples of well-chosen metrics, the best of which not only impress others but also shape future directions and strategies (see “Where the Metrics Are,” Page 34). Wailgum’s article is full of good ideas for identifying and implementing meaningful programs of measurement. (Take for example, Starbucks’ tracking of robberies at its retail outlets and follow-up efforts to minimize them.)

Part of what led to my attitude adjustment was reading Moneyball, Michael Lewis’s terrific book about a partisan revolution within the hidebound world of professional baseball. The book is a chronicle of how old, tobacco-chawed habits die hard. It is also the best thing I’ve ever read about metrics, and how a set of cherished-but-wrong-headed statistics can mislead devotees. It is important to choose your metrics wisely.

Lewis’s baseball Sandinistas are the “Sabermetricians” (after the Society for American Baseball Research, or SABR)a group of baseball stat geeks who’ve championed a wholesale rethinking of what is measured in baseball and how it gets applied. The core belief of the Sabermetricians, first advanced by the apostle Bill James, is that baseball’s traditionalists have ignored metricson-base percentage, in particularthat are much more useful and revealing than batting average or slugging percentage.

Among the central heresies of Sabermetrics is the idea that a walk is as good as a hit. Baseball traditionalists have always undervalued walks, ignoring the opportunity of teaching hitters to be more disciplined at the plate. Likewise, managers have tended to place too high a value on bunts and steals, both of which are reliable ways to make outs. Sabermetrics counsels that outs are to be avoided at all cost.

Into the mosh pit of Sabermetric theory leaps Billy Beane, GM of the Oakland A’s, a failed ballplayer who fit the physical baseball ideal but lacked both the temperament and discipline to succeed on the field. The hero of Moneyball, Beane internalizes Bill James’s metrics and turns the somewhat reluctant and baffled A’s into a modern proof of concept for Sabermetrics. High-priced baseball talent valued by traditional measurements may be less efficient and score fewer runs than lower-priced talent when measured against Jamesian yardsticks.

Baseball is now gradually being reinvented along Sabermetric lines. The Boston Red Sox, whose GM is another Bill James acolyte, won the World Series after architecting a team around Sabermetric principles. I would encourage anyone still a skeptic on metrics to pick up a copy of Moneyball and learn how the right numbers can produce the right stuff.