HVAC Moneyball: Could It Work?

This tech tip was submitted by Tim De Stasio. He originally published it on his website, which you can visit HERE. Thanks, Tim!

Winning takes strategy and the right information. The HVAC business is no different.  But what information should we collect, even pay for, to get better and win?

What if these widely accepted methods that we’ve used for years don’t tell the whole story? What if some of these traditions, while having a connection to the results we want, are not the actual path to these results?

This was explored in the book Moneyball by Michael Lewis, which later became a movie starring Brad Pitt. It recounts the 2002 season of the Oakland A’s, a woefully poor baseball team led by their general manager, Billy Beane. Beane must figure out a way to play winning baseball with a budget that’s a fraction of those of teams like the New York Yankees, who year after year would scalp good players away from poor teams because they could afford to pay them more.

There had always been a widely accepted set of metrics to evaluate a baseball hitter’s worth, namely home runs and runs batted in. There were other highly subjective attributes that scouts would throw around when speculating a young player’s potential, like his jawline or even how pretty his girlfriend is. But Beane is committed to a mathematical approach based on less appreciated statistics, like on-base percentage. This approach is formally named “Sabermetrics” but affectionately called “Moneyball.”

He realizes that the end goal is to win games. He uses statistics to determine how many runs his team needs to score to win those games. Then, he figures out how to get those runs with an aggregate of cheaper players that had been discarded by other teams because they didn’t meet the conventional standards of baseball. He found a cheaper way to “pay” for those wins.

And surprisingly, it worked. The Oakland Athletics got better and better using the Moneyball model. They broke records and won more games than many other teams that had 2 to 3 times their payroll. The lesson to be learned can be summed up in a quote from Chapter 5:

 If you challenge the conventional wisdom, you will find ways to do things much better than they are currently done.

Michael Lewis, Moneyball

If it worked in the business of winning baseball games, can it work in our business? I’m no mathematician, but I can say that our industry is plagued by an outdated set of traditions that science has long left in the dust, just like traditional baseball. I’d like to explore a few areas where I think it is possible to turn the old ways on their head.

Non-Invasive Testing

The conventional ways of checking cooling involved gauging up and checking superheat and subcooling.  Most techs assume that if the superheat is 10-20°F and the subcooling is 10-15°F, the system is performing at its peak.

With diagnosing cooling systems, there is a parallel to Billy Beane’s thought process. What is our end goal? It’s to correctly arrive at a diagnosis or performance level. Is there a way to “pay less” for that information? Time is extremely valuable, so we need to arrive at our conclusions as efficiently as possible without causing other unintended consequences. 

Non-invasive testing, like on-base percentage, is one of those hidden gems that even residential and light commercial technicians can use to check system performance. It involves using temperature and humidity air probes and pipe temperature clamps to test a system. Static pressure probes are placed at the ducts. You’re not “paying a premium” for performance information by gauging up and possibly losing a few ounces of critical charge or cross-contaminating a system.

One metric is “evaporator split,” also known as temperature differential or design temperature difference (DTD). By subtracting the suction line temperature from the return temperature and comparing it to a “Design Temperature Difference” benchmark, we can tell how accurately the unit is charged and even if it has an airflow problem. We can even make a close prediction of what the pressures actually are.

Evaporator Split = Return Dry Bulb – Suction Line Temp

Normal evap splits in comfort cooling should fall around 35°F no matter what the current heat load is. If the split is higher, you may be undercharged or have too much airflow. If it’s lower, you may be overcharged or have an airflow problem.  

On the condenser side, a similar test can be done to measure approach temperature. On air-cooled condensers, it can be very useful in determining how efficient the condenser is at rejecting heat and even if a system is properly charged. 

Approach Temperature = Liquid Line Temp – Outdoor Air Temp Entering Condenser

Typically, approach temperatures are between 3 and 17°F. Comparing approach temperature with other temperatures can help pinpoint the problem without having to connect gauges.

Coupling non-invasive system testing with airflow testing gives a fuller picture of the system’s delivered capacity. Total airflow is one of the most important measurements a tech should be able to take and has traditionally been one of the hardest to take accurately and efficiently. But new tools like the TrueFlow Grid from The Energy Conservatory now make that test a lot easier.

The movie Moneyball leads you to believe that 2002 was the first year any team had put into practice this new method of playing baseball. In reality, Billy Beane had started this strategy 10 years prior and did not even invent “Moneyball.” Other statisticians had written books about it, and Beane simply was forward-thinking enough to try it out since he had nothing to lose. Similarly, non-invasive testing is not new, but it’s surprising how many technicians and entire companies still do not use it.

Power Factor

Conventional service procedures would call for every motor in a system to get an amperage check and for all capacitors to be unwired and bench-tested during a maintenance visit. Some companies even perform resistance checks or use a megger on small motors. I’m not saying those tasks have no value, but what is our goal? It’s to predict a future failure. Is there a more effective way so we don’t pay a steep price in time or risk?

Most of the time, when a motor is over-amping, it is overheating. But amps don’t tell the whole story. Just because a motor is not over-amping does not mean it is operating efficiently.

Checking winding resistance can be time-consuming. The system has to be shut down, the motors unwired one by one, then checked, then rewired. There is a lot of potential for miswiring it back.  What is an appropriate winding resistance? 2 Ohms? 10 Ohms? It leaves a lot of room for error. 

Bench testing capacitors has been a time-tested maintenance task. But this, too, is time-consuming and requires the unit to be shut down, unwired, and then rewired back. And bench testing doesn’t tell the whole story of how that capacitor works under load.

On the other hand, power quality multimeters are now very affordable. These meters can read Power Factor, which is another term for electrical efficiency of a motor. A normal power factor on PSC motors is 0.94 or higher.  A technician can quickly detect a capacitor that is failing and even find an inefficient motor without ever shutting down or unwiring any equipment. 

Power quality tests, along with noninvasive testing and total airflow, give you the system’s running Energy Efficiency Ratio (EER) and coefficient of performance (COP). These can help a technician make ethical replacements and upgrade sales backed by science and math.

Technician Role Players

Similar to baseball, the HVAC industry, especially the residential sector, has an abundance of key performance indicators (KPIs) that paint a very clear picture of a technician’s actual contribution to the company’s financial bottom line. If you’re not using a field management software that gives you those insights, then you are literally flying with your eyes closed. Some of these KPIs are yearly revenue, revenue per call, revenue per hour worked, etc. These metrics will reveal your high-performing technicians—the Aaron Judge and Bryce Harper of your company.

It’s important for your company to have heavy hitters like that. The movie Moneyball would have the casual viewer think that the 2002 Oakland A’s were composed of nothing but undervalued players who didn’t hit a lot of home runs. But the book reveals that while Billy Beane did manage to assemble an “island of misfit toys,” they also had conventional talent like Miguel Tejada and Eric Chavez, who combined for 68 home runs in 2002. Their ace pitcher, Barry Zito, led the league with 23 wins and won the Cy Young Award.

But there were unconventional role players too. The A’s had a lead-off hitter in Jeremy Giambi. Traditionally, the leadoff hitter (who hits first in the batting order) is the fastest runner on the team so that he can beat out ground balls for infield hits. But Giambi was anything but that. He was thick around the waist and slow. But he got on base better than most players who were faster runners because he drew a lot of walks. Because of his plate discipline, the results were the same.  

Business owners would love to have an all-star team of technicians and installers. But the reality is that the HVAC industry is already facing a skilled labor shortage. We cannot continue to fill our rosters the old way—hiring from tech schools and community colleges that fail to prepare students to be job-ready and are taught by crusty old instructors who never kept up with technology. Small contractors that don’t have the resources for in-house training programs take a loss for years bringing up apprentices only to have them leave when they’re finally profitable. 

There are many skilled men and women in other sectors who already have the skills to use technology.  They are already being recruited from electronics repair, IT, auto repair, communications, etc., to switch to the HVAC industry. Developing a repeatable process using software like measureQuick allows someone to specialize in maintenance with just a few weeks of targeted training for that role. 

Within a short time, that same maintenance technician can advance their skills and be able to perform further diagnostics and even new system commissioning. There will always be a need for craftsman installers and master technicians. Forward-thinking employers are recognizing that asking an install crew to also perform a full system commissioning after a long day in a hot attic is simply not realistic.  Decoupling installation from commissioning allows your team to play the position that suits them. It also allows you to make a new employee profitable quicker and give them a path to further advancement.

Choose the Game You Want to Compete In

The 2002 Oakland A’s ended the regular season in first place, tied the Yankees with 103 wins, and set a Major League record of 20 consecutive wins, all with a third of the Yankees' payroll. But the A’s lost in the first round of the postseason. But so did the Yankees.

So was Billy Beane really successful? Can we really say that Moneyball worked if they didn’t win the World Series? It depends on what you say the goal was. Of course, every Major League team wants to win the World Series, but to win 103 games out of 162 in the regular season says a lot more about your team than the small sample size of the postseason, where anything can happen. Billy Bean studied the game, recognized what he could and could not do, and played it his way.

It’s tempting to want to build an empire. But there are other ways to succeed in our business as a small company too. Recognizing your pockets aren’t as deep as the bigger players will prevent you from trying to compete with them in aspects like advertising. Focus on quality, customer service, technical excellence, and profitability. Maybe your investment will pay off in a different way, like building small businesses that are sellable after a few years in different markets.

Other teams were taking note of the A’s success and became believers. The Boston Red Sox managed to hire Billy Beane for the 2003 season, but Beane quickly backed out. Instead, they hired 30-year-old Harvard graduate Theo Epstein as their GM. Epstein was a student of Sabermetrics, and in 2004, the Red Sox won the World Series using Moneyball. Instead of buying expensive talent who demanded exorbitant compensation, their talent was homegrown and trained in their system that rewarded plate discipline, on-base percentage, and defensive ability.

The Moneyball mentality is to choose what part of the game you’re going to compete in and set realistic expectations. Understand the game better than your opponent. It’s a strategy for the underdog, who has the cards stacked against him, but allows him or her to stay competitive. It requires you to do more with a little than others can do with more. Find unconventional methods to arrive at the same result. Embrace new technology and data.

“If you challenge the conventional wisdom, you will find ways to do things much better than they are currently done.”

And just like the 2004 Boston Red Sox, you might just peak at the right time and win it all. 

—Tim De Stasio



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