Last weeks’ World Series win by the Chicago Cubs wasn’t just a triumph for a long-suffering franchise and fan base. It was also a victory for Cubs general manager, Theo Epstein, and his innovative approach to baseball, one grounded in the use of analytics.
Analytics isn’t new to baseball, as anyone who read Moneyball when it was released in 2003 can tell you. But back then, the idea of using mathematical formulas to help build a baseball team was greeted with outright hostility by baseball’s old guard. They believed the only way to evaluate players was with the “eye test” – i.e. judgements made by viewing the player in action. The thought was that “baseball men,” who had watched countless games, would be far better at determining a players’ value than an analyst armed with numbers and equations.
In the meantime, though, the Boston Red Sox had already hopped on the analytics train in 2002, when they hired Epstein. It raised the eyebrows of the baseball establishment, as Epstein was a 28-year-old Yale graduate whose baseball playing career had ended back in high school. He was the polar opposite of a “baseball man” and a firm believer in the critical role data could play in building a winning team.
It was an unconventional approach at the time, but one that resonated with Epstein’s new boss, Red Sox billionaire owner John Henry. Henry made his fortune in the financial markets, where he encountered similar errors to the ones he believed baseball traditionalists were making.
“People in both fields operate with beliefs and biases,” Henry wrote in a letter to ESPN writer Rob Neyer. “To the extent you can eliminate both and replace them with data, you gain a clear advantage … Actual data from the market means more than individual perception/belief. The same is true in baseball.”
Two years later, the Red Sox broke an 86-year World Series drought. In 2011, the Cubs sought to rise above their similarly dismal past and hired Epstein, giving him a five-year $18.5 million contract. And now in 2016, every team in Major League Baseball has at least one full-time analytics staff member.
But not every team joined the analytics movement at the same time. Some were very late to the party and are struggling to catch up. Three of the franchises most resistant to the rise of analytics – the Twins, Phillies and Diamondbacks – have all fired their general managers in the past two seasons. This year that trio of teams combined for an average record of 66-96.
What Does This Mean for Banking?
Banks have a choice. They can opt to be like the Twins, Phillies and Diamondbacks, continuing with traditional process and approaches and taking a cautious, skeptical view toward change. Or they can follow the path of Theo Epstein and aggressively pursue a differentiator that will give them a leg up on the competition.
The latter path is the obvious choice, but not an easy one. It requires a commitment to innovation.
That means assessing where you stand, evaluating where you need to go next, and identifying how you’re going to get there.
So where do you start on this trek towards innovation and how do you get there? We share how in our latest white paper, called Innovate or Die.
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