The Value of WoW

Last fall I quoted from the cover story of the October issue of PROFIT magazine [“How Canada’s Top Achievers Attain Peak Performance”].

The author of the article, Kara Kurylllowicz, “asked some of Canada’s brightest lights in business, sports, media and the arts to share the techniques and resources they use to achieve peak performance.”

One person interviewed was Richard Peddie, who is the President and CEO of Maple Leaf Sports & Entertainment Ltd., which owns both the Toronto Maple Leafs and the Toronto Raptors. Peddie argues that a key to success is to “steal great ideas.”

He goes on to say…“I’m a great believer in continuous learning. I do it mostly through reading. I devote at least an hour a day to reading, although some days it’s more. I read Fortune, Forbes, Business Week and the dailies. But I go beyond the business section and read the whole paper. All of it is ripe with ideas. I also get a clipping service for basketball stories. I keep current on everything from sports marketing to player moves “I’m really trying to read different books to get more perspective. I joke that I’ve read all the leadership books. The last one was the The Wages of Wins: Taking Measure of the Many Myths in Modern Sport, which I’m getting my hockey and basketball general managers to read.”

This quote makes it clear that Bryan Colangelo, general manager of the Toronto Raptors, was at least asked to read The Wages of Wins.

This week we saw the benefit of this assignment. Colangelo was named Executive of the Year in the NBA. So now we have clear proof that The Wages of Wins makes you a better decision-maker. Every executive who was publicly assigned our book has won the Executive of the Year award. Our record with respect to this statistic is 100%. Amazing!!!

How the Raptors Improved

Of course one might wonder, why did Colangelo win the award? The key was the improvement in the Raptors fortunes on the court. In 2005-06 the Raptors won 27 games. This past season the team won 47 contests. The 20 game improvement was the biggest leap by any NBA franchise, hence it seemed likely that Colangelo – the architect of this team – would receive some credit.

Okay, now for the big question: How did this team improve?

If we look at Toronto’s Wins Produced we see that half of the observed change reflects how many wins the team earned from its offensive and defensive efficiency. In 2005-06 the team won 27 games, but the summation of Wins Produced – which is based on offensive and defensive efficiency – suggests that the team should have won 33 contests. In 2006-07 the team won 47 games, but Wins Produced suggests that the team should have only won 43 games. So if we look at Wins Produced (or offensive and defensive efficiency) we only see a ten game improvement.

Where did these ten games come from? To answer that question, let’s look at the individual players. As we do in The Wages of Wins, we look at how a team changes by examining two issues: the change in productivity of returning players and the impact of roster moves.

Table One: The Toronto Raptors in 2005-06 and 2006-07

Let’s start with the roster moves. As I noted yesterday, one roster move did not help. With the first pick in the 2006 NBA Draft the Raptors selected Andrea Bargnani. When the season ended, Bargnani was the least productive player on the Raptors. So he did not help. Now that doesn’t mean that Bargnani won’t become a great player. But if the Raptors moved Charlie Villanueva – the team’s lottery pick in 2005 – to give playing time to Bargnani, that move did not pay off in 2006-07.

Two other new players, though, did help. Anthony Parker and TJ Ford each offered above average levels of productivity. The addition of these two more than compensated the Raptors for the loss of Mike James and Villanueva. Overall, we see that on a per-minute basis the new players were about as productive as the departing players. The new players did play a few more minutes than those that were lost, so there was a net gain from the roster moves the Raptors made.

Although the roster moves did help some, the key for the Raptors was the improved performance of three players: Chris Bosh, Jose Calderon, and Joey Graham. These three players produced 14.1 wins in 2005-06. In 2006-07 these three players combined to produce 23.4 victories. In other words, one could argue that the entire improvement we see in the Raptors is tied to Bosh, Calderon, and Graham playing better.

And what did these three do better in 2006-07? Bosh improved on the boards. Graham also captured more rebounds, but additionally, cut down on his turnovers. And Calderon improved his shooting efficiency dramatically.

So basically the whole improvement can be tied to Bosh and Graham doing a better job with respect to securing possession of the ball and Calderon doing better at turning possessions into points.

Who Deserves Credit?

One could argue that roster moves are the responsibility of the general manager while changes in the productivity of existing players are due to coaching. If that is the case, then perhaps we should acknowledge the value of the NBA’s Coach of the Year, Toronto’s Sam Mitchell. Certainly some of the roster moves made by Colangelo helped. But it looks like at least half of the improvement is tied to Bosh, Graham, and Calderon playing better.

Of course one could also ask, why did these three players do better? Did Mitchell (or even Colangelo) tell Bosh to get more rebounds? Or tell Graham to get more rebounds and cut down on his turnovers? Or tell Calderon that the objective when taking shots is to get the orange ball to actually go through the hoop?

One could speculate but I am going to simply assume (like all good economists) that The Wages of Wins made its way through the organization. And given the persuasiveness of the argument we made, the games of Bosh, Graham, and Calderon were transformed. The results were Mitchell got to be Coach of the Year and Colangelo got to be Executive of the Year. But the true credit lies with The Wages of Wins. At least, that’s the story I’m telling.

– DJ

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