The Decision:
You are the coach. Your team has the ball on your own 6 yard
line (to score you have to drive the ball 94 yards farther down the field). It’s the 4th down and you have to cross
the 11 yard line to get a first down.
Do you go for it, or do you punt?
If you punt, the other team will get good field position and
the data shows that 75% of the time they will score after such a punt.
However, they will score 90% of the time if you go for it
and fail to get the first down, which happens about half the time.
Do you go for it, or do you punt?
We know that virtually every coach in every level of
football will punt the ball in this situation.
One of the amazing things about being a human is our ability
to ignore the facts in making a decision.
In this case the data says you’d be wiser to make it a policy to never
punt the football.
At a private school in Little Rock Arkansas, the coach there
never punts on 4th down.
The reason every other coach punts is because as humans we
tend to over value downside risk, the risk of losing something, and under value
upside opportunity, the opportunity to gain something. Plus, like all humans, coaches have a hard time with statistical analysis, especially in the heat of the moment. Being more of a numbers guy, the coach in
Arkansas believes the numbers.
Out of a hundred such 4th down situations
described above, when other coaches punt the ball, then the other team scores
75 times. In Arkansas, the coach goes
for the first down in all of those one hundred 4th down
situations. Half the time the team makes
the first down. Of the remaining fifty 4th
down situations the other team takes over and scores 90% of the time. That’s 45 times.
In Arkansas, having the other team score 45 times is better
than having them score 75 times. Weirdly,
for the rest of football, it’s the other way around! The coach also realized that he would have a hard time calculating probabilities in the heat of the moment. Instead, he did the analysis before football season even started, and made a simple policy decision.
Going-for-it on 4th downs is not the only unusual
tactic and policy this coach employs. Every
kick-off is an on-sides kick, and they don’t return punts. The school is Pulaski Academy. It has won
five state championships since 2003 using these unusual tactics.
The additional benefits of this policy is that Pulaski
Academy’s offense is on the field for more downs and thus the defense is off the
field more. More playing time for the
offense causes them to execute better.
Less time for the defense means they don’t wear out as quickly. The opponent’s defense plays more downs and
is exhausted more quickly than they are playing any other team. In football, it is common knowledge that the
defense wears out far quicker than the offense.
Why doesn’t every coach employ statistical based tactics? It is because, as humans, we find it very
difficult to overcome our natural tendency to overweigh loss and thus the
coaches will follow tactics that feel less risky even when they’re not.
As a consultant I see this phenomenon in business leaders
often. They are naturally reluctant to
take the decision to change direction, even when they know they should. Fear of the unknown, over emphasis on the potential downside, and a natural avoidance
on anything that implies complexity cause business leaders to procrastinate. Often they procrastinate forever.
I am working on the Global Cities Export Initiative to
greatly increase the amount of exporting we do.
The perception most non-exporters have is that exporting is
extraordinarily complex. Yet, the statistics
are overwhelmingly in favor of exporting.
You grow faster, you become more competitive and innovative, your
margins increase, you are more profitable, your valuation multiple goes way up,
you’ll be 72% more productive on a per employee revenue basis, and you pay
better and can hire the cream-of-the-crop workers. In spite of all the data, CEOs of most
companies are encumbered by not being able to overcome their natural sense of
risk aversion, and in this case, fear of the unknown and the great weight of
complexity.
By finding the right export resources, we help Wisconsin companies
handle each obstacle one at a time which eliminates complexity and adds control
using a defined plan and process which makes exporting feel much less risky. If you're interested in how to use policy to your business advantage, call me. 414 287-4118
