Football is a very different game than it was a couple of decades ago when teams made decisions based on using their gut or intuition. They chose players to buy based on the impressions of scouts. Scouts who often had a bad case of confirmation bias.
Things changed in the latter days of the twentieth century and haven’t been the same since. As famously told in the book Moneyball about the Oakland A’s baseball team, about which I wrote a couple of years ago, data analysis took over and showed that many of the decisions teams typically made when they relied on intuition were wrong.
When Fenway Sports Group, owners of the Boston Red Sox, acquired Liverpool FC in 2020 it applied the principles of Moneyball and the powerful underlying idea that data can be used to correct confirmation bias. The club, which hadn’t won the league championship for over 30 years became one of the most successful and admired.
Since 2000, many businesses have been built largely on Moneyball principles. As former Google CEO Eric Schmidt put it “In God we trust. All others have to bring data.”
Adoption of these principles – basically using validated data to make better business decisions – has been slower amongst smaller businesses. Even with the advent of cloud accounting technology and automation the adoption of rigorous data analysis – what I call business maths or knowing your business numbers – has been, at best, patchy.
t’s true that many of these businesses have migrated to Xero Accounting and QuickBooks Online for their bookkeeping but fewer are analysing and interpreting their data to create business scorecards and build longitudinal information databases to analyse trends over time.
I liken it to buying a very expensive Sky TV package and only ever listening to the radio!
But just as setting up Sky, Netflix and Amazon Prime takes a little bit of effort initially, in no time it’s second nature; so it is with building your business dashboard. The difference is that as you start to capture, analyse and interpret the data from your business you can start to make better business decisions.
And better decisions mean more profit, cash in the bank and free time. Not bad for a modest investment in time to set up some simple data capture systems.