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How about the Oakland Athletics, the Boston Red Sox, the Chicago Cubs, or the Golden State Warriors? All of these teams bucked a very strong counter-current by
by Dowwie 8y ago
How about the Oakland Athletics, the Boston Red Sox, the Chicago Cubs, or the Golden State Warriors? All of these teams bucked a very strong counter-current by applying data-driven management practices. Go back even further to General Electric under neutron Jack Welsh, who advocated six sigma practices with great success. More controversially, look at the practices of the financial industry. Decisions grounded by sound quantitative risk management practices helped to contribute to survival while others who didn't exercise such practice collapsed.
How about the organizations that failed to manage using data driven decisions and took huge risks: Merrill Lynch, Washington Mutual, AIG,....?
Trusting the algorithm gets flak but it sure has plenty of anecdotal evidence to support why it is superior to gut instinct and wisdom in many circumstances.
- pmart123 8y agoWell, I would argue that while being data driven often has a first mover advantage, eventually this is arbitraged away. The first few movers reap a lot of the benefits, and by the time everyone starts to replicate a similar methodology, it is either too hard to catchup, or there are too many dogs chasing the same car. A good example of this would be banks in 2008. The quants were looking at only the underlying statistics, and not conceptualizing that the historic data didn’t account for housing bubble, low rates, zero down, etc.