The Chip Kelly Fiasco: High Expectations and the Dangers of Chasing Short-Term Performance

I have a few things to say to the Eagles front office…

1) What made you think Chip Kelly would have the same exact success in the NFL as he did in college (in four years at Oregon, he went 46–7)?

2) You fired him for generating literally the exact same Win-Loss record as Andy Reid during his first three years (27–21).

3) You penalized Chip for having a winning record his first two years thinking it would continue year after year. (After year 1 and 2, you thought you made the right call expecting it to continue, but with more success in the playoffs. It didn’t so you whined and cried like babies, then fired him)

4) You guys actually provide a service to the rest of us by showing us the perils of performance-chasing; how not to make decisions regarding your coach; ultimately, how not to win Super Bowls.

OK so you fire him after one losing season (even though they finished second in the division)!? Sounds about right in today’s NFL and broader “what have you done for me lately” culture.

Talk about a tight leash. The Giants gave their head coach a three year losing record leash.

Side thought: Maybe giving your coaches, and your investments, a little more slack to gyrate up and down improves your odds of long-term success? Maybe do not judge their performance every year, but every three or five? The Eagles short-term thinking may be one reason why they’ve never won a Super Bowl, while the long-term thinking Giants have won four.

So, all of that Chip Kelly hype was for what? To sell tickets and merchandise? I need to say this again: Chip Kelly produced the exact same record as Andy Reid in his first three years. But, Chip made the mistake at having huge success at Oregon and then a solid first two years with the Eagles. He set the bar too high and the expectations got him fired.

Andy Reid, on the other hand, was a nobody before he became the Eagles coach in 1999. He was a career offensive line coach. Oh, and he was an assistant head coach with the Packers for two years. Yay. The guy had no head coaching experience before the Eagles job, so expectations couldn’t have been lower.

When he had success, the Eagles probably thought they were geniuses — thinking they stole an undervalued coaching talent from the rest of the league.

Another side thought: I wonder if the Eagles’ decision to hire Reid was more luck than skill. If the recent decision to fire Chip is any indication, I bet they got lucky.

Either that or their goals and values have changed a lot. With Reid, they wanted to build a winning team for the long-term. With Chip, they wanted to win every year no questions asked. Short-term. Short-term. Short-term.

Andy Reid’s Record

Chip Kelly’s Record

The Eagles front office provide a useful case to study how humans behave, especially when a new, flashy and exciting opportunity (coach) comes along. Pair that with a couple of recent sub-par seasons for your boring old 14 year head coach Andy Reid, and the decision to make a change becomes easy.

Beware what you wish for, my friends.

The Eagles let an emerging legend in Andy Reid slip away to KC, where all he has done is compile a 31–17 record with two playoff appearances in three years. In exchange, they picked up a hot college coach with an exciting new strategy who promised to score a lot of points. He didn’t deliver to the expectations of the front office so they fired him. Bye.

The Philadelpha Eagles owner, Jeff Lurie, and the front office chased the hot hand. They set expectations unrealistically high. Chip Kelly stood no chance. If it wasn’t this year, it may have been next year or the one after.

How this Story Relates to Investing

I believe the Eagles present a useful case in how to handle investments.

If you seek consistent short-term gains, by all means chase the hot hands and try to repeat that year after year. Like many before you, you’ll fail miserably despite all of the “fun” you think you’re having while trying.

On the other hand, if you want to build a long-term success then you have to give your investments some room to wiggle — room to generate both winning and losing streaks.

If you hold the leash too tight, you risk cutting the big winner before it even gets going.

Think what would happen if you bought Apple and sold it with no intention of ever buying it again when it had its first 20–30% loss. You would’ve sold it in 1981 when it IPO’d (it lost ~62% from Jan ’81 — Jun ’82). Today, you’d have nothing to show for it.

If you want big winners, you gotta give ’em some slack.

Prediction: Chip Kelly will compile a winning record and make the playoffs at least once in his first three years coaching the 49ers.