Moneyball for Executives

Imagine a world where CEOs have AWS-style stats like quarterbacks.

I recently met up with JJ Houldin, the co-founder and managing partner at Sift, an executive search firm, to talk about the brave new world of recruiting.

JJ and I agreed that executive recruiting is ripe for a Moneyball-style disruption due to the combination of a) generative AI analysis b) personal performance data c) the growth of social media platforms that can be used to promote and discover talent.

The recruiting industry remains dominated by the SHREKs. If you don’t know the acronym, it’s to executive search what FAANGS are to technology. SHREK stands for the top five firms: Spencer Stuart, Heidrick & Struggles, Russell Reynolds, Egon Zehnder, and Korn Ferry.

Those firms have built their businesses on decades of long-standing relationships with the executives they place and the companies for whom they do recruiting. They typically focus on C-Suite executives because the higher salaries justify the time committment.

That dynamic is what reminded us of Moneyball, the Michael Lewis book (and later movie), which portrayed the shift from the gut instincts of traditional scouts to a statistics-focused world in which — as one of the characters memorably argues — they “buy runs”, not players.

Moneyball was published more than two decades ago and since then the statistics in sports has become exponentially more complex. In part that is because more data is generated by attaching GPS and biometric monitors to the players and in part because of cloud-computing services like AWS.

That has popularized a slew of stats such as the NFL quaterback score, which didn’t exist before.

A few months ago I spoke with Jake Schuster, CEO of Gemini Sports, an analytics firm and was blown away by what they can do with data. In particular was the ability to analyze the value of players using a much wider array of data.

For example, adding a given player to the left wing on a soccer team will make a bigger or lesser impact depending on the specific other players on the field. The latest analytics take some of those scenarios into account.

In addition, the value of players depends on their abilities to perform off the field with sales of merchandise, which depends on their social media followers. It gets complex fast.

We’ve seen the corporate world capture performance statistics for service jobs, in particular call centers and other repetative tasks.

But the kind of analysis showing how will someone perform given the size and composition of the rest of the people at the company hasn’t arrived yet.

It seems like its only a matter of time that that similar but much more nuanced and sophisticated data is applied to executives.

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BRIEF OBSERVATIONS

CEO STORYTELLERS: McKinsey did a research report called The CEO as Chief Storyteller which included this nugget: people looking for information go first to a company website and then to the CEO’s LinkedIn page. The report underscored how important it has become for executives to tell their company story.

FUN IS THE ONLY METRIC: Signull’s Substack puts life in perspective by reminding us that fun is the only real metric in life.

THE FLINCH: Julien Smith makes the case in The Flinch that your personality is not set in stone. That as much as you love coffee in the morning, its a habit that can be changed. “Thirty days without it, and you would be fine.”

PODCASTS IN PERSON: The Acquired Podcast did a live show last week at Radio City Music Hall and 6,000 people paid between $100 and $200 to attend. I find that extraordinary and a sign of more to come.

I WANT A TEAMMATE: Anu Atluru reminds us in her Substack that AI often replaces things that we don’t want it to replace, such as companionship

Please reach out if you have any thoughts about today’s newsletter. I enjoy hearing from readers. Send me a message if you want to talk or meet up if you are in NYC.

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