HR Lessons from Domino's

Here is David Brandon explaining how he ended up with Brady Hoke:

Hoke, who turned around San Diego State and Ball State after being a Michigan assistant for eight seasons, might not have been the fans' first choice because many of them wanted Jim Harbaugh or Les Miles to restore the program as a national power.

Athletic director Dave Brandon said he had discussions with both of them, but insisted Harbaugh and Miles weren't offered the job in an interview with The Associated Press on Tuesday night.

The next day, he seemed to try to knock the luster off the coach who left Stanford to lead the San Francisco 49ers and the one who stayed at LSU.

"All that glitters is not gold when it comes to some coaches,'' Brandon said. "A two- or three-hour meeting with a coach uncovers much more than you could learn scanning the Internet or sifting through statistics.

"Sometimes the hype or the PR doesn't match the real person.''

And here are Richard Thaler and Cass Sunstein explaining in their review of Moneyball why Brandon's concept of being able to judge coaches on the basis of interviews is a terrible idea:

Lewis poses this question: "If professional baseball players could be over- or undervalued, who couldn't? Bad as they may have been, the statistics used to evaluate baseball players were probably more accurate than anything used to measure the value of people who didn't play baseball for a living." Right! On the basis of first principles, the market for baseball players should be one of the most efficient labor markets on earth. It is hard to think of any high-paid profession in which performance is measured so precisely--and is publicly available to every other potential employer. Compare the market for baseball players with the market for corporate executives. A company looking for a new director of human resource management would be hard-pressed to get any objective data on the past performance of job candidates. Instead, such a company would be forced to make choices based on interviews with the candidates--a process that is even less accurate than the one the old scouts use to size up a high school player. Interviews are notoriously bad predictors of future job performance. In most contexts their predictive value is essentially zero.

A decision to hire a college football coach is more like evaluating baseball players than HR managers. There is plenty of objective evidence that should help glean whether a coach is good or bad. The information is imperfect because the sample size of games is small (at least in comparison to at-bats) and a coach can win or lose for reasons that have little to do with his own merit (talent left over by a predecessor, key decisions made by subordinates, strength or weakness of key conference rivals, etc.), but there is plenty of publicly-available information about coaching candidates. If Brandon thinks that hiring Brady Hoke is just like hiring a VP at Domino's, then he has illustrated why Michigan has erred (yet again) by hiring an athletic director who comes from the business world without experience in athletic departments.

There are several possibilities here to explain Brandon's comments:

1. Brandon is making a post hoc rationalization to the fan base as to why he hired Brady Hoke instead of the two former Michigan players who had better resumes. "I didn't want to make out with Jessica Biel at the bar. She'd be more trouble than she's worth." This rationalization can be used to cover for: (a) Brandon trying to land Harbaugh and Miles and failing; (b) Brandon deciding that he didn't want to spend the money on Harbaugh or Miles; and/or (c) Brandon wanting Hoke all along because he wants a motivated coach for whom coaching at Michigan is the end-all, be-all of his existence.

2. Brandon actually believes that as a captain of industry, he can sit across a table from a guy and divine lessons about the guy's soul. In other words, Brandon is deluding himself in the same way that Dubya did with Vladamir Putin.

I've been using blackjack analogies a lot over the past few days to describe Michigan's coaching hires. Hiring Rodriguez was the equivalent of splitting two face cards when the dealer is showing a six and then being dealt a pair of fives. It was the right decision at the time, but it didn't work out. Hiring Hoke is the equivalent of hitting on 15 when the dealer is showing a six. It's not the right move, but there is still a chance that it could work because we're dealing with probability instead of certainty. If Dave Brandon believes his own rhetoric, then he's doing the latter and thinking that it's the right move because of his close study of the dealer's facial expressions.