Tuesday, April 23, 2024

The NFL Draft: Are Teams Getting Better at Selecting Talent?

On Thursday, we will have the NFL Draft in which each team selects college players.   The draft has become a major television event, and an entire industry of analysts, scouts, and analytics gurus has emerged to flood the airwaves with "expert" commentary.  Teams have invested heavily in their scouting departments, and the assessment tools and analytics they use to select players are allegedly far more advanced than they were decades ago.  With that in mind, I decided to analyze the selection of quarterbacks in the first round over the decades.  I chose to analyze quarterbacks since that is the most important position on the field today.   You can see some interesting trends, although the 1990s appear to be a bit of an aberration (fewer stars and more busts than other decades).  Thus, I decided to compare the 1970s and 1980s to the two most recent complete decades (2000s and 2010s).  Here are a few observations:

  • Teams are selecting more quarterbacks in the first round now than they did years ago.  We shouldn't be surprised at this fact, given that the passing game is much more important today.   Teams are clearly investing in a position which has much more value and contributes more to winning today than 50 years ago.  In the period from 1970-1989, teams selected 1.9 quarterbacks per year in the first round.  That number rose to 2.8 quarterbacks per year in the period from 2000-2019.  
  • Despite the advanced scouting and analytics, and the tremendous investment in talent evaluation today, teams are not any better at identifying stars than they were in the past.  50% of the quarterbacks selected in the first round from 1970-1989 made at least one Pro Bowl.   Did the NFL general managers improve their hit rate in more recent years?  Not one iota.  50% of the quarterbacks picked in the first round from 2000-2019 made the Pro Bowl at least once.  No improvement despite all that work to allegedly improve talent evaluation!  
  • How many champions did the teams identify in these years?  From 1970-1989, 8 of the 38 quarterbacks selected in the first round were the starting quarterbacks on Super Bowl championship teams.  That equates to 21% of the players selected.  From 2000-2019, only 5 of the 56 quarterbacks chosen in the first round have won a Super Bowl (just 9%).  Now, that number is lower, in part, because some of these players have many years left in their career.  Others will surely win Super Bowls.  It is also lower because a certain quarterback drafted in the 6th round, who played here in New England, won so many championships since 2000.  Having said that, the fact is that many of the most elite quarterbacks in NFL history win multiple championships. Thus, a small set of quarterbacks end up champions.  Consider that 5 players have won 36% of the Super Bowls ever played (Brady, Bradshaw, Montana, Aikman, and Mahomes).   12 players have won 60% of the Super Bowls ever played! Thus, the chances of selecting a future champion remain very low, despite all the investment in talent evaluation.  
What are the lessons from this analysis?  Can business leaders learn anything from the NFL draft?  First, if a certain type of talent becomes more valuable, don't count on simply improving your ability to identify future stars when recruiting and hiring.   You may need to simply recruit more people, knowing that your hit rate might not improve much despite new analytics tools.  Second, in some businesses, a few truly elite talents can have an unusually large impact on organizational success.  Yes, we like to emphasize that business is a team sport, much like football.  Yet, there is no way we can simply ignore that 60% of the championships in this sport have been won by 12 quarterbacks over nearly 6 decades.   Of course, they had tremendous talent around them, and great coaching, but still the impact of these individuals at this most important position is quite extraordinary.  Third, beware of the hype around various talent evaluation tools.  Yes, analytics can be helpful, as can other new tools for evaluating talent.  However, we should be skeptical of those who claim that these new tools and methods can dramatically improve our ability to identify top talent.  Beware the hype! 

Wednesday, April 17, 2024

When We Hire, Should We Consider How Well-Connected Candidates Are?

Does an organization benefit when its employees are highly connected to workers in other firms and industries? Or does the benefit simply flow to the employees themselves, as they perhaps are building better future job prospects through these connections. Shelley Li, Frank Nagle, and Aner Zhou set out to examine this question. They built an enormous dataset comprised of approximately 9 million employees with 2 billion individual employee relationships at more than 7,000 publicly held companies in the United States. The scholars discovered that companies whose workforces are more connected tend to produce more valuable innovations. The authors summarized their conclusions as follows:

Although employees do not necessarily make connections for the company’s benefit, we find that companies’ centrality in the employee network positively predicts company value. This effect is largely driven by mid-level employees. Furthermore, company centrality in the employee network predicts company innovation inputs (R&D spending), and controlling for these inputs, predicts the quantity, scientific impact, and economic value of companies’ patented innovation outcomes.

Nagle commented to HBS Working Knowledge about their findings: "What we’re trying to say is there are many more jobs than you might imagine where having the right connections can be helpful to your company.”  He also notes the implications for managers as they search for job candidates. 

“Managers, when they hire somebody, know to look for many different qualities. How well-educated are you? How much job experience do you have?  Today, in some jobs, such as sales or higher-level management, managers may think about how well-connected you are, but our work shows that might be a consideration for a broader set of jobs.”

I'm quite interested to know more about the particular jobs where these connections matter most.  Beyond science, engineering, and sales roles, are there other positions where these networks are important?  Moreover, rather than simply thinking about hiring people who are quite connected, I'm curious to know how organizations can help their employees build more relationships with workers in other organizations.  What can business leaders do to help foster these connections for their middle managers?  

Thursday, April 04, 2024

Be a Loud Listener

I'm looking forward to hearing David Brooks speak at my daughter's graduation from Vanderbilt University next month.   Brooks, a writer for the New York Times, has written a new book titled, " How to Know a Person: The Art of Seeing Others Deeply and Being Deeply Seen.  I'm reading the book now, and it has some terrific insights on how we can connect, empathize, and communicate with others more effectively.  Brooks appeared recently on Matt Abraham's podcast from Stanford.  Brooks introduces a very interesting concept.  He describes the value of being a "loud listener" when communicating with others:  

First, regarding attention, treat attention as an on off switch, not a dimmer. So, when you’re talking to somebody, it should be a hundred percent or zero percent. Don’t try to 60 percent it and have 40 percent of your attention on your phone. Be a loud listener, I have a buddy when you’re talking to him, it’s like talking to a Pentecostal charismatic church, he’s like, uh huh, yes, yeah, uh huh, amen, I preach, preach. I love talking to that guy. And some people are loud with their voices, some people are loud with their faces, they’re emotionally reacting. And so, I love talking to those people.

Brooks is emphasizing an important part of active listening.  It involves really showing the other person that you are paying attention.  You are truly leaning into the conversation when you are a loud listener.  Brooks also reminds us that we aren't very good at multitasking.  We have to give others 100% of our attention in a conversation, rather than trying to do two other things at the same time (which we all do, of course).