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Developing winning teams the Theo Epstein way

Posted by Ian Brookes on 07/11/16 08:12

Theo Epstein is the President of Baseball Operations for the Chicago Cubs, crowned Major League Baseball’s World Series Champions last week, ending a drought of 108 yeas since their last victory. He is acknowledged as the driver behind their reinvention, with a unique strategic approach to identifying, recruiting and developing talent, which has resonance beyond baseball.

The Cubs beat the Cleveland Indians 8-7 in the tenth innings. The Cubs, who had been 1-3 down in the best-of-seven series, blew a three-run lead in the final game but came back after a rain delay to clinch the title.

At 00:48 in Cleveland, Ohio, Michael Martinez of the hometown Indians chopped a groundball to third base. There, Kris Bryant scooped it up and fired across the diamond to Anthony Rizzo. When the ball landed in his glove, the World Series was over.

A powerhouse of baseball's formative years, the Cubs played in three of the first five World Series, triumphing in 1907 and 1908. But then came a huge reversal of fortune, as fans endured over a century of failure. Between 1910 and 1945, the Cubs won seven National League pennants, but lost each time in the World Series.

The drought was imbued with fresh intrigue in 1945, when a local tavern owner supposedly put a curse on the club. William Sianis, proprietor of the Billy Goat Tavern, took a goat to games at Wrigley Field, but he and his pet were refused admission to a World Series contest against the Detroit Tigers that year. According to legend, Sianis was so outraged he proclaimed the Cubs would never win another World Series.

Epstein was tasked with reversing this sorry narrative, and bringing a world title to the North Side. Previously, Epstein masterminded two World Series triumphs at Boston Red Sox in 2004 and 2007. The Red Sox had a championship drought of their own – 2004 was their first championship since Babe Ruth helped the team to a title in 1918. The 2004 victory left a mark on Epstein:

The morning after we won, on the way in from the airport, we passed a cemetery and there were dozens of Red Sox pennants and hats on top of the gravestones. Grandsons, sons and daughters went and made sure they knew. It was incredibly emotional.

Under Epstein, the Cubs finished last in each of their first four seasons, losing 94 out of 162 games per year on average. Yet much of that was by design, as Epstein looked to take advantage of rules regarding baseball's amateur draft.

Each year, teams pick new players from high school or university, with the order of that selection process determined by win-loss record. The worse a team performs, the greater its chances of drafting a future superstar. Young players are also paid much less than existing players, affording teams far more flexibility on their payroll. This may seem like a perverse incentive to lose, but Epstein used this strategy to replenish the Cubs with elite young talent.

This season, after adding professional talent, Chicago finished with a 103-58 regular season record, good enough to secure their first division title since 2008. The Cubs then beat San Francisco and Los Angeles in successive post-season rounds to clinch a trip back to the World Series.

In the World Series, Cleveland won game one 6-0. The Cubs rebounded to even the series with a 5-1 win, before a tight third game for Cleveland ended 1-0. The Indians also took game four, a 7-2 win edging them within one victory. Just as people began to question the Cubs, they embarked on a winning streak. A Bryant home run sparked a big rally to win game five 3-2 and the Cubs won game six, 9-3 to tie the seven game series 3-3.

The deciding contest had innumerable twists, and displayed extremes of raw emotion that will never be forgotten. The final game went into an extra ninth, and then a tenth innings. A 17-minute delay followed the ninth innings due to rain, then Ben Zobrist smacked a tiebreaking RBI double in a two-run tenth that lifted the Cubs to an 8-7 victory over the Indians.

So what is the secret to Theo Epstein’s team building? If there is a formula for his success, it is complex and multi-dimensional, but also remarkably unsophisticated in one essential way - when deciding whether to add a player, Epstein focuses most of his attention on an athlete’s personal characteristics rather than just his physical abilities. He values the person as much as the player. He calls it Scouting the person more than the player.

He comments, In the draft room, we will always spend more than half the time talking about the person rather than the player. What are their backgrounds, their psyches, their habits, and what makes them tick?

He wants the right kind of people on the field. ‘Character’ is a vexed subject. Intelligence and physical skills derive significantly from character. Character is now being understood not as the destination, but the foundation, even the process.

The thing Epstein wants to know most about any potential player is how he has handled adversity. We ask our scouts to provide three detailed examples of how these young players faced adversity on the field and responded to it, and three examples of how they faced adversity off the field. Because baseball is built on failure. The old expression is that even the best hitter fails seven out of 10 times.

The Cubs opened the season with 22 players obtained by Epstein, and had the best regular season record in Major League Baseball. A team deep in talent, the roster was a mix of youthful prodigies and wily, proven veterans. Epstein patiently and strategically built the mosaic that is the Cubs’ line up with one prescient acquisition after another.

Having made an assessment of character, Epstein then looks to science. His use of data analytics and algorithmic tests to measure players’ co-ordination is essentially using neuroscience to measure talent. He spends long days modelling data, following in the steps of Billy Beane.

Beane was the general manager of the Oakland A’s who famously fashioned his low-budget team into a surprising contender by using data analytics to find hidden gems among the players whom other teams had rejected. This was the dawning of the Moneyball era.

Back in Boston, Epstein won two World Series, in part by digging deeper into data, drawing on the burgeoning field of sabermetrics (named after the Society for American Baseball Research). Sabermetricians examine the various statistics a baseball game produces, with an eye toward figuring out which skills and outcomes really determine who wins and loses.

Epstein cut a deal with a pair of data scientists interested in studying the neural pathways that govern the act of hitting a baseball. They got access to his team, and he wound up with a ground breaking new evaluation tool - a nuanced algorithmic test to assess a player’s dynamic hand-eye co-ordination, reaction time, and inhibitory control, which is the ability for the brain to start an act and then stop it when it gets new information—like, say, laying off a breaking pitch.

When a batter puts the ball in play and it results in an out, what really made that happen, and how can we quantify it? Now most MLB teams ask those sorts of questions; yesterday’s winning insights have become today’s common practices. The Cubs focused on drafting and developing hitters over pitchers because the data makes clear that young hitters are a much safer bet to develop.

Epstein mines statistics to evaluate talent, forecast player performance, and model game strategies. It’s what led him to sign several players whom other teams had released. Gathering stats on college players going back thirty years, Epstein ran regression analyses to isolate the qualities that predicted success in the pros. Armed with those findings, he drafted a succession of future stars.

During the initial rebuilding years, when the MLB team offered little to cheer, news of these prospects provided succour. Fans were encouraged to bypass the first team and focus on how the kids were tearing it up. Five years after Epstein promised Chicago a winner, the Cubs were ready to make their move. The kids started coming up, and they could play.

It meant taking a step back at the major-league level for a few years, trading some established players for some younger, lesser-known prospects, but Epstein’s hiring science was an unmistakable signal of seriousness and commitment.

Having assembled the squad, next on his radar was to apply the same analytical approach to training and development techniques. Epstein compiled The Cubs Way, a detailed catalogue laying out his approach.

Hitters would be trained to be selectively aggressive, watching for particular pitches to drive. Pitchers would prepare according to a precise protocol designed to promote durability and prevent injury, prescribing when and how they should throw between games.

Also within his development plan is a focus on mental skills, including a series of strategies to help players cope with mental stress and improve their mental performance – in elite sport, after physical fitness and motivation, players are really in the business of decision-making. The winning team makes more good decisions.

Epstein believes that he can advance his team’s performance when they train to make better decisions. There are now highly evolved analytical techniques for understanding how those decisions influence results. However, the athletes themselves are still people, imperfect and not machines. Analysing the data is one thing, and actually using that data to inform and influence organizational decisions is another.

If you could choose to be a fan of any team for any season in the recent history of baseball, you would choose either the 2004 Red Sox or the 2016 Cubs. Both turned enduring legacy of failure into glorious victory. Maybe you’d prefer the catharsis of your own team beating your long time nemesis, but for me as a neutral, it’s really one team or the other. And somehow, the same man built both teams using an analytical approach.

To be perfectly clear, ‘analytics’ doesn’t mean ‘numbers’. It means cutting through the noise, nonsense and subjectivity of people recruitment and development where we all have unfounded bias. It means having a reason for every decision you make, and that reason being something other than ‘because that’s the way it’s always been done’.

It doesn’t mean eliminating conventional wisdom, it means questioning it. It means getting as much data as you can, but data is just a fancy word for information. The Cubs don’t focus on stats at the exclusion of other forms of information  - there is always more information to be had, and more information is always useful. The battle was never between the quants and the gut-instinct types, it was between the curious and the incurious. The curious have won.

The Cubs’ championship melds analytics and scouting information, that sees no contradiction or controversy in using data of all types to inform its decisions. It is the inevitable harmonic perfection that every organisation in baseball and business is heading in that direction.

If you’re a Cubs fan, it’s time to party like you’ve never partied before. But if you’re a fan of smart people doing smart things and pushing the boundaries and trying new strategies in a never-ending quest to secure a competitive advantage, you should be rejoicing, too. Epstein’s holistic approach – focus on character, apply data science to selection, adopt precise physical training techniques and develop mental skills, especially decision making - can be applied to building the smartest team in your business.

Talent is critical to business performance, and companies need to understand talent-related insights to make informed business decisions. Yet most enterprises still base talent decisions on the intuition and experience of hiring managers and HR professionals. Few can offer systematic evidence to support their hunches.

Epstein has shown that a use of blended work force data analytics can produce better talent decisions, and better talent decisions improve results. The ‘datafication’ of talent is a leading business trend today and has the potential to change the game forever.

 

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