July 24

Advanced Analytics are a Home Run

Advanced Analytics are a Home Run

When the Houston Astros won the seventh and deciding game of last year’s World Series, it marked the end of a long and challenging road. The team not only became the champion of Major League Baseball for the first time in its 56-year history but also did so after losing a staggering 111 (out of 162) games just four short years before. And the Astros didn’t simply spend their way to victory. Their Opening Day payroll ranked 18th of 30 major-league teams—and almost 50 percent (approximately $118 million) less than the World Series runner-up, and highest-spending team, the Los Angeles Dodgers.

Winning was a process, years in the making, and resting to a large extent on advanced data analytics. Houston Astros general manager Jeff Luhnow, a McKinsey alumnus and former vice president of the St. Louis Cardinals, began undertaking a data-driven transformation of the baseball operations for the Astros from the moment he was hired in 2011. Analytic insight fueled both player selection and on-the-field decision making, such as where to position players in game situations. As with any big change effort, this was far more than a numbers game. Luhnow and his team had to build an organization and culture that embraced data, translate it into ideas that mattered for players and coaches and break down silos that were hampering the realization of data’s full potential.

In February 2018, Luhnow took a break from spring training to sit down with McKinsey’s Aaron De Smet and Allen Webb and discuss his views on both how the Astros used data to move from last to first and what it will take to continue winning as more and more baseball teams join an analytics arms race that has already gone far beyond statistics and data mining and is starting to integrate artificial intelligence.

Find out more at McKinsey.com

Understand more about advanced analytics in the NCA&T MBA program. The MBA program has a winning record in preparing graduates to use analytics in the real world.