Fighting for the future

Volume 12 Letter 5

Baseball is a very competitive sport. Each team uses the same approved equipment, has a maximum number of players and has minor league teams to supply them with backup participants when their main players get hurt. The only competitive weapon is to purchase the best players and managers making the game a financial “arms race”. Yet in this very competitive market a team with a $34 million dollar payroll was able to compete with and beat teams with payrolls >$134 million – it took some innovative thinking and a lot of guts!

The movie, Money Ball, tells the story of how Billy Beane, the General Manager of the Oakland A’s, changed the game of baseball by introducing statistical analysis to what is essentially a game of percentages. The Oakland A’s were a small market team trying to compete with the big boys and their one hundred million dollar plus payrolls (New York Yankees, Boston Red Sox’s, Los Angeles Dodgers etc.). Players on small market teams who showed any promise of stardom were scooped up by the “big teams” who could offer them big money contracts.

The Oakland A’s had just lost two of their star players and were scrambling to re-build their team. Billy Beane broke with tradition and brought in a statistics whiz kid whose computer program could calculate the odds of a baseball player getting on base in various situations. But his new way of picking ball players butted heads with the old guard status quo methodology. This is played out in one scene where all the scouts are sitting around a table evaluating players, each throwing out an opinion. One of the scouts declares he likes a player named Perez. Immediately, a second scout jumps in declaring that he doesn’t like Perez “because Perez has got an ugly girlfriend” reasoning that “an ugly girlfriend means no confidence”, which of course means he can’t hit a baseball…which of course is ridiculous!

How often is this type of gut feel process used in business today when there are innovative tools that can help us make better decisions but they aren’t used because they challenge the status quo? Introducing innovation means upsetting the status quo. Disturbing the status quo means you’ll be fighting against entrenched people in your own organization more than you will with any competitor. If you’re going to innovate (and it’s imperative that you do) you’ll need to upset the status quo!

The reason most businesses have such a tough time innovating is because everyone is paid to maintain the status quo. Most managers are paid to bring efficiency to what is already there. Reduce inventory, respond faster to customers’ orders, increase margins – the list goes on but it’s essentially about running what you’ve already got better. It doesn’t address innovation; solving a problem in a fundamentally different way, to bring high value to your customers and to your company!

In any organization there are those who are content with the status quo and who will actively block innovation. The consequences of this mind set can be devastating! Aaron Shapiro, author of “Stop Blabbing About Innovation And Start Actually Doing It” [1], offers a few suggestions when companies need to innovate to tackle tough problems.

  • Select a diverse group of people: select a few good leaders and a few good “minds”. (Titles mean nothing to innovative groups).
  • Set the right goals: task the team with developing a specific new product or service.
  • Remove the bureaucracy: freedom to create means freedom from bureaucracy.
  • Set up off campus: locate the team away from the distractions of the everyday business and every day business problems.
  • Appoint a senior manager who has the authority to move initiatives forward quickly.
  • Freedom to fail: innovative groups always fail before arriving at success – if they don’t they aren’t being innovative!
  • Develop the right environment: physical environment affects creativity – create a good one.
  • Play at work and encourage it outside of work: play is fundamental in innovative thinking as it allows the creative problem solving juices to ferment. The “ah ha” moment that often comes with solving a complex problem, rarely happens when directly involved in the task.
  • Plan on overcoming internal resistance: part of the innovation needs to address overcoming internal resistance before the product is launched.

Remember there is always risk in innovation and bucking the status quo. The Oakland A’s started off their season very poorly. The radio talk shows were demanding Billy Beane be fired and the old scouts were saying “I told you so”…..that is, until the Oakland A’s went on to the longest winning streak ever in baseball history!

Yes, there is risk in developing innovative new products, services or processes but the real risk is in not pursuing these new ideas and slowly drifting to bankruptcy.

1. Stop Blabbing About Innovation And Start Actually Doing It Aaron Shapiro | 04-16-2012

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