Making the numbers count – lessons from sport on financial analysis

Researchers and analysts can play an important role in real estate investment. They can impose discipline on investment processes, challenge conventional thinking, and transform raw data into actionable insights.

Too often, however, analysts fail to have an appropriate influence on investment decisions. Robust data is collected, and high-quality analysis is undertaken, but this is not fully reflected in investment decision-making.

This is a missed opportunity and a critical one for real estate analysts who aspire to go beyond producing accurate insights to influencing outcomes for clients.

Lessons can be learned by examining a field where data analysts have experienced a significant elevation in their importance over the past decade: professional sports.

Basketball Beyond Paper

“Basketball Beyond Paper” is a new book by Dean Oliver, a pioneer in basketball analytics. Over twenty years ago, he wrote the seminal “Basketball on Paper,” one of the most important sports analytics books ever. That book focused on ensuring teams used the right metrics to assess performance. It changed how teams and players are evaluated.

Oliver set out to write a follow-up focused on how data and analysis have evolved, but somewhere along the way, he realised the most important lessons to share were about how to make change happen – how to use metrics and analysis to improve performance and drive better outcomes.

Oliver reflects: “Despite the overall success of the basketball analytics movement, the ride from the beginning to now has not been an easy one”. In his book, he examines what could have been done differently to exert greater influence at an earlier stage.

Much of it comes down to recognising that basketball – like real estate – is a people business and adjusting behaviors and mindsets accordingly.

Don’t share the data, translate the analysis

Oliver makes important observations about how and what to communicate as an analyst. “Starting with too much detail doesn’t get you anywhere,” he notes. Explaining the robustness of your data and the nature of your analysis doesn’t help analysts influence outcomes. “You are the math person in a business filled with people who wanted to avoid math,” he reminds us.

This is one of my favourite lines from the book: “Going into the draft room with probabilities between 5% and 95% pushes the probability that anyone will listen to you down to 50%.”

So, don’t share the data; explain what it means. “It was my job to translate from numbers and charts into basketball language,” Oliver says.

Real estate analysts should get to the “so what” quickly and put their points in terms others can use. They should always ask: what can be communicated easily enough to make a difference?

Know that there is more than one goal

Incentives shape behaviors, and incentives are never perfectly aligned. Winning may be the final destination, but everyone has different stops along the way.

Oliver warns: “Don’t be blind – winning is not everything in basketball.”

For example, he writes that, “An owner can just hire a big-name coach or general manager because that will at least draw interest from the media and fans, regardless of whether they help the team win. A general manager will find it easy to do a favor for a player agent by signing his mediocre player, even if an analytical approach can find a clearly better player.”

Helping teammates achieve their objectives, even if it represents a minor detour on the team’s journey to success, may serve the greater good by building trust and cementing relationships. As Oliver says of teammates: “They have to learn to trust you. They probably need to like you. They definitely need to feel that you are on their side.”

So it is in real estate. Fund managers naturally want to manage more AUM; transaction teams want to do deals. Being active in the market maintains relationships even when value is scarce.

Analysts must recognise this reality and seek to convince people of their value by being useful to them personally. While retaining a focus on the overall goal of superior investment performance, they should actively support teammates in their priorities to build reciprocal relationships that will pay dividends when advancing analytical initiatives.

Change the culture, not just the metrics

Oliver’s most profound insight may be this: analytical influence requires organisational transformation, not just technical excellence. This takes time, collective will, and a fundamental shift in how teams think about uncertainty.

The culture of basketball organisations has changed over the last 20 years. Oliver states that good organisations today are those where “there is consistency and intellectual humility around the process that everyone respects.”

Central to this transformation is learning to love the language of uncertainty. Teams now talk about playing the odds, quantifying probabilities, considering the distribution of outcomes, discussing tail risks, and balancing upside and downside.

Key decisions must be made with imperfect information and limited time. Therefore, critical competency is making judgment calls despite uncertainty. Organisations that embrace probabilistic thinking acknowledge this reality; those that reward false certainty pretend it away, leading to worse outcomes as people optimize for appearing confident rather than being correct. Those on the right side of this divide are much better positioned to leverage the insights analysts provide.

For real estate analysts, the lesson is clear: focus not just on the quality of analysis, but on building an organisational culture that values rigor, embraces uncertainty, and maintains the collective will to make better decisions. Analysts should seek to break down silos. Integrating analysis within the wider business is what ultimately drives better outcomes.

From Basketball to Football to Real Estate

The challenges Oliver identifies extend well beyond basketball. There are similarities in how analysts have achieved influence in other sports.

For example, twenty years ago, Premier League football managers regularly dismissed analysts entirely. Fast forward twenty years, and managers are so reliant on analysts that they now routinely bring them with them when they move between clubs, making them an integral member of the coaching team.

Football analysts evolved from data presenters into analytical coaches. They now translate data insights into tactics and practices. Organisations created hybrid roles that embedded analytical thinking within coaching staff rather than isolating it in separate departments.

For real estate analysts, the uncomfortable truth is this: if your analysis isn’t influencing decisions, the problem may not be the quality of your work. Ask yourself – are you translating or just presenting? Are you building relationships or just building models? Are you integrated into the business, or are you isolated in the research department? Oliver’s journey from dismissed analyst to influential pioneer shows the path forward.

A version of this article originally appeared in The Property Chronicle. To read other articles I have written for The Property Chronicle, please click here.