“Where there is no Standard there can be no Kaizen (improvement)” – Taiichi Ohno
One of my defining traits as a person is that when exposed to something long enough I can’t help but break it down, analyze it and look for ways to improve it. I am a apostle of Lean manufacturing which wikipedia defines as follows:
Lean manufacturing or lean production, often simply, “Lean,” is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, “value” is defined as any action or process that a customer would be willing to pay for. Basically, lean is centered on preserving value with less work. Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System (TPS) ….
So while I definitely cop to being an an opinionated person, my opinions are generally formed by data and backed by years of practical experience improving complex systems to maximize value following the toyota priciples of management.
In basketball, value to the customer, the fan, is measured simply in wins. I started this blog not just because I have something to say about basketball but because I firmly the application of lean management principles to the enterprise of basketball through trial and error (and with the assistance of the great readers of the WOW network) can produce something truly exciting in terms of coding a philosophy to maximize wins.
The Build me a Winner algorithm is my attempt at defining a standard for the effective running of a basketball team . By defining a standard of excellence, we can then measure and evaluate team performance and proceed to the keystone of the lean process, kaizen (improvement).
As previously stated this will be a work in progress and I will be making additions as needed over time.Please feel free to suggest additions and ask questions. Without any further ado, here’s the Build me winner algorithm Rev 2.
This article uses Wins Produced and WP48 [Wins Produced per 48 minutes] to evaluate player’s performance.* This measure uses three key components to evaluate a player:
- The player’s per minute box score statistics
- The player’s team’s per minute box score statistics
- The average performance at the player’s position (PG, SG, SF, PF or C)
A full explanation can be found here. To give a general scale, an average player has a WP48 score of 0.100. The very best players in the league usually have a WP48 over 0.300. To put this in perspective; an average player who plays a full season at 40 minutes a game would generate around 6.83 wins for their team. In contrast, a player posting a 0.300 WP48 would generate about 20.5 wins at 40 minutes a game over an 82 game season.
“Data is of course important in manufacturing, but I place the greatest emphasis on facts.” – Taiichi Ohno
Let’s review first: what do we think? What do we know? What can we prove?
- Player value in the NBA is skewed towards points and not possessions stats. Over time this leads to a weak correlation between wins and money spent.Teams are in fact using the wrong stats to evaluate players. There are thus market inefficiencies to exploit. Stealing from my article on the Short Supply of tall People.
- Basketball more than any other sport is a sport about marginal value.
- Wins are a direct result of the marginal absolute productivity of the players on the court as measured in point differential (margin of victory).
- Wins produced uses regression to build a causal model for wins based on the statistics available in the standard boxscore.
- There are multiple factors and contributions (let’s call this player productivity) that go into scoring a point and the boxscore reflects a significant portion of these factors.
- Wins are a function of Point differential
- Point differential is a function of Player Productivity as measure in the boxscore stats and actually it’s a function of marginal player productivity (i.e. how much better your player’s on the court are than your opponent’s )
- Wins can thus be modeled as a function marginal player productivity
- Wins Produced uses regression to build that model and can be shown through correlation to be successful.
- The Short Supply of Tall people. Big Men (F/C) are on average more productive than everyone else . They in fact account for 50% of all productivity. This makes it harder for a center to be better than the average and thus accumulate wins in our model but this is not out of step with the reality of the situation. Teams also have a lot more at risk with their big men. It’s also much easier for a team to accumulate negative value at center and power forward because there is much more at risk.
- The Short Supply of Ball Handlers. Average Center and Point Guards have over time been much more valuable to teams than any of the other positions. Over the last 5 years the difference between an average center and a replacement level one is 4 more wins than the same at shooting guard (and 2 at Point Guard). The short supply of tall people is really not a surprise however the short supply of ball handlers is.
- Peaks for the players are skewing older over time (in fact the data is deceptive because it includes active players who may have not hit their peaks yet). In fact if I look at players born since 1970.You see the most players (32 out of 178) hitting their peaks at 28. What does this mean? It means that if you’re a GM signing a guy coming off his rookie contract (say 24 or 25), You can reasonably expect equal or improved performance over the course of a 5 year contract (thereby justifying a % increase from the base Year). However if your big Free Agent signee is 29 or over? You’re probably out of luck .
- The best individual seasons generally come from players playing with the team that drafted them (or the #$$%@%@ Lakers)
- The draft is not a place for quick fixes. Impact rookies are a rare breed. There have been 330 rookies selected in the top 10 since 1977and less than 15% of these rookies – who were generally considered “hot prospects” – have made substantial impact (>8 wins) his rookie season (and only 13 of the 33 players chosen with the first pick). If we look at the top 25 draft picks ever, the average pick of the top 25 is 12.24. Only 3 were the top pick (Magic, Robinson & Shaq) and only seven were in the top 3 picks (and none at number 2). This, and the fact that 8 of the top 25 were picked at 20 or later, strongly suggests the league in general is not very skilled at pinpointing incoming talent. The probability of getting no value or negative value from a draft pick fluctuates around 30% , however Impact players (Superstars & All time greats) are coming into the league at an increasing rate. This would help explain the fact that the quality of basketball seems to be at it’s highest levels in recent years (see here).
- The number 1 pick can and has been flubbed massively. 10 of the 30 #1 Picks fall in the second half of the rankings. The list includes some old WoW friends:
- Mark Aguirre
- Allen Iverson
- Kenyon Martin
- Glenn Robinson
- Kwame Brown
- Joe Barry Carroll
- Joe Smith
- Kent Benson
- Michael Olowokandi
- Andrea Bargnani
- Drafting Players under 20 is an extremely dangerous game. Only 13 of the top 200 players were aged 19 or younger at the end of their first NBA season
- Dwight Howard
- Tracy McGrady
- Kevin Garnett
- LeBron James
- Andris Biedrins
- Luol Deng
- Tyson Chandler
- Josh Smith
- Rashard Lewis
- Chris Bosh
- Kobe Bryant
- Cliff Robinson
- Andrew Bynum
- The Half baked notion that what wins in the regular season is not necessarily what gets you the trophy. The difference? Minute allocation & how wins produced are affected by that allocation. We continuously hear terms like playoff rotation & playoff minutes thrown around come playoff time. The half baked notion tells us that a good deep team filled with average and above average players will get you in the playoffs but to get far in the playoffs you need your wins to be concentrated in your Top 6.
- In the Regular Season:
- Your starting five account for 82% percent of your wins.
- Your second unit is important over the course of an 82 game regular season accounting for 18% of your wins
- After that everybody else is statistically meaningless.
- In the Playoffs :
- Your starting five account for 94% percent of your wins in the playoffs.
- Only the first guy of your bench matters accounting for 5% of your wins
- After that everybody else is statistically meaningless.
- In the Regular Season:
Build me a Winner
So Based on this knowledge, let’s try to summarize what my management philosophy would be as an NBA GM.
- Operating the Franchise:
- Great companies/organization have clear operating principles and have the best people operating in concert to execute them. This document lays down those guiding principles. Everyone in the organization needs to know and understand these (from the owner to the folks at the concession stand)
- As a GM make sure you hire and train the best people to help you. You can’t be everywhere and the best organizations are great independent of the person who builds them.
- Follow the Japanese principle of 5-s, spend money on the organization. Do everything possible to build a pleasant and world class organization. There’s no salary cap on facilities and amenities.
- Players are significant capital assets and I would provide as much maintenance as you can for them. Your training and travel should be the best. I would provide nutrition and fitness counseling to all my players and I would offer to pay for all their meals (on a designed diet plan). I would spend money on as many shot, workout and video or other coaches as a player needs to improve his game. Yoga or other flexibility building activities (as practiced by physical freak Kareem) would be provided gratis for all players and staff. Your training staff should be the best in the world.
- Personal and financial counseling would be available to all players and coaches.
- There’s a lot of research that show that the coach is not really a factor (unless his name are Phil or Pop). The two key roles for the coach are minute allocation and teaching the right skill set and the culture. The biggest thing I would look for in a coach is that he’d have to have an open mind to what the statistical analysis is telling him. If the analysis says play Kevin Love, you have to play Kevin Love. After that we need a guy who lives/teaches the culture of the team. He’s the guy who has to get the team to buy the system that were building. The best coaches (Phil and Pop) do this. But really what we need is open mindedness and charisma. I would initially look for a relatively unknown (and hence cheap and tractable) head coach (as long as they don’t turn out to be one of the very few coaches who actually have a negative effect on their teams). In the future, I would look for ex-players from my team, who already drink the Kool-Aid and qualify (open minded to analysis, charismatic, leaders)
- If Phil or Pop are available hire them :-)
- A wins produced model (such as Prof. Berri’s Wins Produced or my own Wins over replacement Player (WORP)) gives a team a statistical edge over other teams in building a roster by properly identifying a player win contribution with a high level of correlation. My team would be built around just such a model (probably with enhancements for individual defense which as a gm I could design and pay somebody to data enter) and identifying underrated/underpriced players that are available.
- Developing an equivalence model for Rookies , D-leaguers and Euro players stats is the most critical research priority my team can have and money will be spent accordingly
- In the absence of a model, my team will hold closed door game simulations between NBA caliber players and prospects for every prospective member of the roster in which meticulous stats will be kept.
- Building the Roster:
- If you inherit a clusterf&*^, do whatever possible to clear all the crap from your roster and cap prior to initiating a rebuild. While locked into the bad players from a previous administration hire the worst possible players to short term contracts and pair them with rookies to guarantee the most ping pong balls. We’ll call this one the Bullet Scenario.
- If you have the opportunity to sign or get a >.250 WP48 player in his prime with no health concerns do it (Let’s call this Riley’s law).
- Given that the top 6 is what matters for the playoffs. I’d trade three .100 WP48 guys for one >.250 WP48 guy in a hummingbird’s heartbeat. This is of course the Law of Garnett.
- Prior to signing them, I would vet the players (draftees and free agents) thoroughly (like the Republicans didn’t do for Palin). I would investigate him like I would an employee I was hiring for a Fortune 500 company at his salary. I’d like to know his injury history and his personal habits (does he drink, smoke,party with Barkley and Tiger etc.) before giving him the money. Medical examinations would be done by the best possible personnel using the latest and greatest technology. We’ll call this Oden & Beasley’s First Law.
- All my analysis seems to point to the following skills being critical: Size and the ability to rebound and play defense like a center, Ball handling and passing and efficient shooting. All personnel decisions should be made based on these three skills. In particular, Big Men and Ball handlers (Centers and Point Guards) are more scarce resources than shooters. I’d pay for skilled labor at those positions and always focus on depth there. This is the central idea behind my own Wins over replacement Player (WORP). This is Magic’s Theory.
- You can’t form emotional attachments to players. Pay players fairly for performance and projected performance but never, ever overpay based on past performance or relaionships. This is the Cuban/Dirk Conumdrum.
- Never,ever,ever,ever have a loss producing player <.000 WP48 on your roster who has spent more than two years in the NBA. If you must evaluate potential, use the d-league (unless the bullet principle is being implemented). Lot’s of candidates here but we’ll call this Morrison’s Theorem of diminishing returns.
- I’d use picks rather than free agents to keep my team successful both on the court and in the bottom line (See San Antonio and Oklahoma City). The draft is, the best source of cheap labor there is. When dealing with draft picks it is important to remember that you are getting a low cost player for four and not one year and any evaluation of draft picks should go beyond the rookie year. Of the top 100 picks half (and 122 of the top 200 picks) were taken after pick 9 suggesting there is always value in the later part of the draft. The draft is a high stakes lottery but it’s a rigged game for the owners. Salaries are fixed at a discount and the risk of utter failure is relatively low (30%). So we build thru the draft and not thru free-agency. This is the Pop/Presti principle #1.
- Here are some more thoughts on drafting. I’d look for productive/athletic/high skill players who are available even if they are being passed up for some reason (character,size, being a tall white dude). For the 2010 draft I love Cousins, Turner,Heyward and Aldrich. I Hate John Wall (too expensive and not polished enough to contribute in the short term the only situation I like this pick in is the Bullet Scenario). I love what the Celts did in drafting Avery Bradley and Luke Haragondy. They’re both chancy picks with a lot of upside. If they don’t work, you at worst lose a min salary. The draft should be treated like a penny poker game, go big or stay home. This is Danny’s Rule.
- Scorers are common and overpaid. I’d flip scorers (goodbye AI and Melo) for picks, picks and more picks and undervalued ball handlers and bigs (hello Billups, Camby and Gasol) see the previous point on draft picks. To clarify, as Man of Steele points out in the comments for rev 1: ” ….trade the overrated scorer for an above average (but underrated) player at the same position and a draft pick or two. For example, the Spurs would trade Parker for Steve Blake and a draft pick. This kind of move would create salary cap room, stockpile picks, and your starting lineup would be no different. Or say you were charge of the Nuggests for instance. You might trade Carmelo for Luol Deng and two or three draft picks. There’s not a GM in the league that wouldn’t take that deal, and your lineup would be no different.” Let call this one the Nugget Corollary.
- I’d prefer later picks in volume over high end lottery picks. Stars can and are had late in the draft (and if we build that rookie model? We have acompetitive advantage). Picks would be used exclusively on high risk/high reward guys. You don’t play the lottery to win third prize. Second rounders would be used mostly on Euro guys that I could stash and see if they’re any good. This is Pop/Presti principle #2.
- Hate overpriced free agents but love minimum salary level players. We know that the talent identification algorithm for NBA teams is broken. That means good talent must be available out there and I’d spend money to find it. So I’d buy one (or possibly two) D-league teams to stash, test and develop talent. I’d look into buying a Euroleague team as well. I’d also be the the king of 10 day contracts and call ups (and closed door game simulations). Roster spots 10 and up would be used at least 75% of the time for auditions and talent evaluation. This is Pop/Presti principle #3.
- By owning my d-league team, I could treat it like a baseball farm system and teach the players coming my teams system and philosophy. By the time they made the team they’ll be all about possession and efficient shooting. We’ll call this the Spurs law of cultural consistency.
- Every undrafted free agent gets an invite and a tryout on my team. Every one.
- Arturo’s Payment Strategy:
- The big question I left pending is how and when do I pay for free agents. I believe in paying for value but i’d set some guidelines to follow (see table Below). My simple assumptions (based on the age model here) are as follows:
1. I’d like to win 55 Games
2. I’d like to stay under the cap
3.23-27 Year old starters will play about 30 minutes a game and improve about 13% over the previous five years
4.28-32 Year old starters will play about 28.5 minutes a game and decline about 3% from the previous five years
5. 33 and up starters will play about 22.5 minutes a game and decline about 5% from the previous five years
- I would always, always, always, always, always, always, always, always, always, always, always, always, always, always, always, always, always, always try to frontload contracts. Always. The frontloading has to do with two things: there’s more uncertainty in the prediction the further I go into the future and frontloading increases my cap flexibility the further I go into the future. I would use frontloading where possible it didn’t affect the overall contract qty and the average per year for the player (I’d pay them the same amount but just offer them to pay them more of it up front). From a pure economics point of view I’m actually taking a hit here because money now is worth more to me than money in the future. But the cap and the penalties in the NBA neutralize this (ballooning payments make me more likely to get hit by cap penalties). Also, frontloading contracts facilitates trading players who are no longer productive. Most teams get stuck with a player that they’d really rather trade because they have a massive salary. With this model, a 30 year old player who drops off would be relatively easy to trade. His salary would be low toward the end of his contract, so a team looking for a cheap veteran or a cheap expiring contract would be quite interested. I’ll call this Arturo’s First Law.
- I would also incentivise the hell out of the contracts. Things like weight,BMI, body fat, supervised shooting practice hours and shooting percentages will all be standard fare in any contract (as much as the league and the union let me get away with). I’d pay straight cash money for clutch shots and game winners. In fact, I’d set up a full shot incentive program which quoting reader jbrett:
o Offer incentives for FG% (or % improvement, etc.) along with a detailed breakdown or their past results from different areas. For example, your conversation with Josh Smith might go like this: “As you can see, Josh, you shoot 73% from 5 feet and in, 42% from 5 to 15 feet, and 24% from 15 and beyond. With the incentives in your contract, you can double your pay simply by NOT SHOOTING THE GODDAMNED THREES!” If, as I suspect, Josh is not smart enough to use this information to improve his FG%, it may be time to cut bait. If he DOES, however, there is a strong likelihood your team will, overall, find itself taking higher-percentage shots in all situations, including critical possessions. ( And, when Josh inevitably takes a bad three, he’ll KNOW it’s bad–and if he makes it, luck.). As far as last-second shots, or desperation heaves: You’re spending big money everywhere it isn’t capped, right? Chart EVERYTHING. Factor out shots over 28 feet–unless they go in, of course! Maybe penalize for holding the ball until the shot clock expires, or passing when it’s too late to do anything but shoot. Guys who shoot high percentages but lack the desire to take critical shots will have an incentive to make plays with passes; can that be a bad thing? (We’ll call this the Josh Smith Incentive program)
As I said, this algorithm is a work in process and I will probably revisit this over and over in the future. Please provide feedback and comments . As always this is only my opinion and I am the first to admit it could be flawed.You never know, If I get to be an NBA GM, I might hire you :-) ( Andres you get to be assistant GM, Devin you have a job) . More ridiculous things have happened.