I have a guilty pleasure. I’ll admit it. I’m fond of sports talk shows!
There’s something strangely fascinating about hearing discussions on sports team decisions, projections on potential wins, trade rumors, salary caps, etc. A number of these sports talk shows also have panels where they debate certain topics to death.
I agree that not all sports talk shows are created equally. I prefer specific ones where the discussions or topics favor ‘analytics’ to support arguments and where hosts make few offbeat, sometimes wild predictions.
I believe there are interesting lessons relevant to corporate strategy that we can learn from these sports talk shows. Hang with me on this. I think there’s a lot to gleam from observing the way the people in these shows build their arguments.
Two of the shows I follow on Fox Sports (via YouTube) are Skip and Shannon: Undisputed and The Herd with Colin Cowherd. I noticed early on that the hosts or debaters have dedicated analysts parsing through every stat to help these folks paint a narrative and make a strong case.
The capacity to build an enlightening narrative is crucial in corporate strategy. Wall Street appreciates this a lot too and they respond in kind through their impact on your company’s stock price.
Going back to the original premise, what can we truly learn about storytelling with numbers from sports talk shows?
#1 – Identify first, second, and third-level metrics that capture the performance of your business
Let’s look at the coverage of a typical NBA game. There’s a ton of data captured over the course of the game. It’s easy to assume that the only numbers which matter are the final scores for each team. And that’s true to a certain extent.
What happens if you’re the losing team and want to improve your future performance?
You must dig deeper! And that’s exactly what a lot of these sports talk shows do when they review a specific game. At a cursory level, you might look at the points per quarter to see the general flow of the game. They don’t stop there. They also look at team vs. individual player metrics. Everything from shooting efficiency to minutes on the court to turnovers.
This affection for metrics tells a complete story of any given game. It may not be a bad idea to extend this to a business setting too.
Too often we’re stuck on a few high-level metrics and ignore the deeper study that reveals fundamental flaws in the way the business raises funds, allocates its investments, reinvests vs. returns funds to its owners.
#2 – Make base assumptions on what you see in the marketplace
Abductive reasoning is a form of logical inference that uses incomplete observations to make the best prediction (which may be true). This form of reasoning served as the basis for diagnostic expert systems which were the “predecessors for current day artificial intelligence, deep learning, and machine learning systems”.
You might ask yourself – what does AI have to do with sports talk shows?
Since abductive reasoning involves use of incomplete observations; you must rely on few assumptions to close the gaps exposed by the incomplete nature of these observations. They’re called ‘theories’ in the world of sport talk. You will often hear sports talk show hosts preface a statement by saying “here’s my theory…”. Here’s my theory – for ex: (1) why a team will win its division, (2) why a team won’t be a Super Bowl contender, (3) why a certain coach will get fired, etc.
The corporate world also has its theories. We call them business assumptions. A lot of business leaders rely on certain assumptions when they make decisions in light of incomplete data. It’s not a bad thing in the decision-making process.
In other words, make certain assumptions on what you see in the marketplace that you can’t explain completely by numbers. But don’t stop there. Add a feedback loop to see how good you are in making these assumptions. And that’s how you get better at making fast decisions over time.
#3 – Predict in ‘mutually exclusive and collectively exhaustive’ terms
I do sometimes get frustrated by the recycling of certain topics in sports talk shows. Often this has to do with conversations around free agents and predictions on where they might end up. Once I get past the initial annoyance, it’s easy to observe a classic analysis framework in action made popular by McKinsey back in the 1960s.
This analysis framework doesn’t just stop with conversations around free agents but also extends to drafting scenarios, trade options, to add a few. Each sports talk show effectively maps out all possible scenarios to progress the conversations on any of these topics. No matter how crazy a given scenario sounds.
Mapping out or breaking down predictions forms the basis of many scenario planning exercises in the corporate world. Adding the element of probability quickly changes this analysis process into a decision tree. Since we no longer deal with clear-cut business situations; thinking exhaustively about potential scenarios and analyzing probabilities can add clarity to overall decision making.
#4 – There is a human element behind every story despite the glamorous analytics
Like it or not, we think we make rational decisions but we’re good at fooling ourselves and often play to our own biases. We have inherent motivations in different situations whether or not we choose to acknowledge it.
Sports teams exhibit these biases through their owners and players. It’s interesting to count the many stories exposed by the sports talk shows about bad personnel decisions made by team owners given their biases towards player development, drafting, team operations. No amount of analytics can account about for bad decisions made by biased owners. This is where the human aspect of stories makes a big difference.
Let’s look at the human element in the stories from the business world.
How many times have you come across initiatives that are financially unsound get off the ground due to the personal agenda of sponsors backing it? Sometimes, it’s also common to see these ‘sponsors’ cherry-picking data to push ahead with their pre-determined agenda.
You can also extend this human story to investors. Why do we see ESG (environmental, social, and governance) investing become so popular these days?
The human story is that people want to support endeavors that speak to their values. They also want to invest in profitable endeavors. The companies that can capitalize on this trend do well on both fronts. They’re able to communicate a smart ESG story that the investors can get behind and support it with profitable financial metrics to make their stocks a slam dunk investment.
#5 – Don’t forget the audience!
The topics in a typical sports talk show play to the demographics very well. The producers pay close attention to the viewership numbers and incorporate general feedback from the viewers. Each show experiments with their format depending on the time of the day and the viewers that tune in. A sports show in the morning will look different from the one in the early evening or late at night.
The lesson to learn here is simple. Any narrative you create is pointless if it doesn’t make sense to the audience it’s intended for. Let’s look at two examples to see how this works out in a corporate setting.
Example A – providing recommendations to senior leaders within your company
Understand who you’re speaking to anytime you’re pulled into a project to make a strategic recommendation. What should we do about the under-utilization at a factory? Should we keep a plant open? Do we need to expand into this region? Is this innovation worth pursuing? There are tons of moving pieces for every executive.
Your recommendation, whatever it may be, therefore doesn’t reside in its own world. It resides in a world where the executive is tackling a multiple of related headaches and challenges, trying to overcome different hurdles to keep projects rolling.
Be mindful of the interrelated nature of work efforts and phrase your recommendation accordingly.
Example B – pitching your company to Wall Street
Bankers think strictly in terms of investment cost (including risk), timeline, and payoff. If these factors reign supreme for them, then the pitch for why your company is a worthy investment needs to take a whole different angle.
Every slide on your slide deck (for example) should be aimed at communicating how you plan to reduce their risk of investment, how you’re tapping into multiple growth opportunities. And finally, how you plan to generate returns consistently over time. You want them to make your company stock very valuable and the only way to do that is to sell them on your journey.
We’re inundated with numbers in every aspect of corporate life. Numbers form the backbone of every strategic recommendation or decision. We also have interconnected systems that can spit out every calculation or metric we want to track in different dashboards. Now more than ever, we need to really tell the story behind the metrics and not be blindly pulled in different directions. Metrics matter but so does the story. Smart decisions occur when the numbers support the story that needs to be told.
Stories inspire people to act. Numbers add reason to every story. Blend the two perfectly and you can shape new worlds.
