Tuesday, September 3, 2013

Groupthink and the Transfer Window

In sports only one thing matters, winning. Sometimes there are secondary objectives, like meeting a budget and keeping a salary under the average. Sports teams are a business and the fundamental idea of winning brings in more money for the team or club by increasing attraction. One might wonder why the Yankees are always a winning team, or why the Dallas Cowboys are always hyped to be a super bowl contender. The status quo in sport is followed to a minute point. Every team tries to copy the other, and that would explain why the Yankees are always winning, because they have more money than all of the teams trying to copy them. It is fascinating that not many teams try to break out of the bubble and use different strategies to draft players or sign free agents that will make the team successful.

In the popular new movie Moneyball, something like this occurs. Billy Beane, the Oakland Athletics GM in the late 90’s and early 2000’s used statistics that were rarely used by other owners to evaluate players. He believed that  Statistics such as stolen bases, runs batted in, and batting average, typically used to gauge players, were relics of a 19th century view of the game. The Oakland A's' front office took advantage of more empirical gauges of player performance to field a team that could compete successfully against richer competitors in Major League Baseball. Rigorous statistical analysis had demonstrated that on-base percentage and slugging percentage are better indicators of offensive success, (Lewis, 2003) and the A's became convinced that these qualities were cheaper to obtain on the open market than more historically valued qualities such as speed and contact. These observations often flew in the face of conventional baseball wisdom and the beliefs of many baseball scouts and executives. By re-evaluating the strategies that produce wins on the field, the 2002 Athletics, with approximately $41 million in salary, were competitive with larger market teams such as the New York Yankees, who spent over $125 million in payroll that same season. Because of the team's smaller revenues, Oakland is forced to find players undervalued by the market, and their system for finding value in undervalued players has proven itself thus far.

In the book Soccernomics by Simon Kuper, a similar phenomenon happens with a small team in the hills of France. Owners of the team Olypique Lyon are rebels that exploit the happy-go-lucky conformers of the transfer market.

“Until about 2000 Lyon was known as the birthplace of cinema and nouvelle cuisine, but not as a soccer town. It was just too bourgeois. If for some reason you wanted soccer, you drove thirty-five miles down the highway to gritty proletarian Saint-Etienne. In 1987, Olypique Lyon, or “OL,” or “Les Gones” (the Kids), was playing in France’s second division on an annual budget of about $3 million. It was any old backwater provincial club in Europe. Today it rules French soccer, and proclaims that it is only a matter of time before it wins the Champions League. Its ascent is in large part a story of the international transfer market. Better than any other club in Europe today, Lyon has worked out how to play the market.”

By using different strategies like buying younger players and using diverse groups to come to major decisions, Lyon has become one of the world’s best teams in a short twenty years. It is only possible by being outside of the box and doing things that more old-fashion clubs would never think of as rational.

Groupthink has held back teams that try to take advantage of conventional wisdom. Conventional wisdom that has been popularized for years only shoots down new ideas that can raise an organization to new heights. It is only fair and assumed that a team with a budget of $10 million dollars that tries to copy a team with a budget of $100 million dollars fails to compete at the same level. It is often questionable how much groupthink is involved in sports and the building of a team. Only so many can succeed, and many do so by having unique strategies. Bottom dwellers are there for a reason, and sometimes it is ignorant to think that they do not deserve that position. Like the great French soccer player Thiery Henry once observed “You are where you are at the end of the season because that is what you deserve.”

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