Saturday, November 12, 2016

Do you go for it?

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