Moneyball... in the Corporate Office?
My colleague Tom has a new assignment.
The director of executive development for a Fortune-500 engineering and construction company, Tom summed up his new assignment this way the last time I saw him: "I moneyball potential executives."
He was referring to the 2003 Michael Lewis bestseller, Moneyball: The Art of Winning an Unfair Game. The book is about Billy Beane, the general manager of the Oakland Athletics baseball team. Beane bet on a controversial methodology called Sabermetrics, a name based on the acronym for the Society of American Baseball Research. It was developed by Bill James whose mission was to "search for objective knowledge about baseball."
Using Sabermetrics, Beane put together a competitive baseball team with a substantially smaller budget than major market clubs. Beane acquired under-valued players by focusing, for example, on characteristics correlated with increased odds of getting on base.
It's instructive, I believe, to pause here for a moment and take stock of your first reaction to the idea that a seasoned, astute, organizational development professional working for a sophisticated and successful company would be responsible for building models and analyzing factors that would predict executive success. Are you intrigued? Horrified? I found myself deeply troubled by the whole idea, but I couldn't really put my finger on what was bothering me.
In an earlier post, I mused about the very real possibility that the traditional corporate executive sitting atop a hierarchical organizational structure may be a dying breed. Let’s set that prediction aside for the moment. If our large corporate organizations continue to be meritocracies, it seems reasonable to ask what merits promotion into the top jobs? For many of us, our professional lives are built around the assumption that leaders, like baseball players, apply a set of skills that can be developed. What’s wrong with the search for objective knowledge about leadership?
In a recent New York Times' opinion piece, Steve Lohr described current trends in our era of data abundance. Lohr described a prediction made by Erik Brynjolfsson, a professor at MIT’s Sloan School of Management: "In business, economics, and other fields, decisions will increasingly be based on data and analysis rather than on experience and intuition." The more our thoughts and actions become archived as retrievable digital artifacts, the greater the potential for patterns to emerge. Are these patterns meaningful? Are they predictive?
Suppose we had a timeline of a high-potential manager’s thoughts, feelings, choices, and behaviors... umm... hang on, I have to tweak the privacy settings on my Facebook account... O.K., I’m back. Might we be able to identify a few critical incidents or capabilities that predict executive success? What if it turns out that a company’s stock price is 20 percent more likely to beat analyst expectations if the CEO had been bullied during elementary school?
When Tom described his new assignment to me, I was intrigued and I was horrified. The analyst in me wants to play around with the data. Patterns are interesting. The existentialist in me balks at the idea that we could have objective knowledge about anything. The humanist in me frets about how organizations will ultimately use whatever information is deemed relevant and will resort to lines like, "Sorry, no key to the executive washroom for you. You’re childhood was a bit too happy."
Perhaps high-potential managers should come with the same warning found at the bottom of any investment: Past performance is not a reliable predictor of future performance.