This is the first of a series of Moneyball Lessons I will blog about that I believe are instructive to those of us working to foster software innovation practices that drive business success.
I was watching Moneyball this weekend for the first time and was riveted by the story of Billy Beanes and the Oakland A’s miracle of 2002. I’m not much of a baseball fan (I grew-up and live in the heart of ”tobacco road” where college basketball is king) so I was only superficially aware of Billy’s bold, perhaps reckless move in 2002 to pursue an unproven, unorthodox approach to building a championship baseball team.
I won’t recount the film’s entire storyline, but the basics go like this–Team wins big one year, loses talent the next, due to free agency, and “rich teams” like the Yankees pilfer their roster of proven superstars. Billy then must rebuild the A’s roster and reach the same championship level again the very next year. Nothing too unusual so far, except for one thing– he has no budget to do so. If you’re a CIO, this last part should sound familiar.
The rest of the film chronicles Billy’s almost blind faith in the unusual methods of a young man named Peter Brand, a Yale graduate in Economics who is anything but a “baseball insider”. This young man believes that most players are overpriced and that clubs buy players for all the wrong reasons… Instead of buying players based on traditional views of “talent”, Brand conceives a mathematical model to reveal those players who are undervalued and overlooked because of the baseball industry’s “belief systems” . Essentially they have an industry blind spot that this young man believes can be exploited in order to build a championship team “on a shoe string budget”.
So why do I suggest that every CIO (and their executive peers) be required to watch this film? Because I’ve spent countless hours watching and listening to IT executives for the last decade struggle to achieve any measure of greatness when faced with equally daunting budget and operational constraints. Case in point – Off-shoring of Software Development. Ask any CIO (or CFO) why they have off-shored so much of their work the last decade and the answer is nearly always the same – to save money and reduce operating costs. In other words, the problem they were attempting to solve was financial, which brings us to:
Moneyball Lesson #1:
“Delivering a service or solution at reduced cost is NEVER a goal worthy of your primary focus or actions.”
Let me say this differently. If you’ve defined your problem in terms of cost, you’re already doomed yourself to failure. Why? because you’re aiming your ideas and talent at the wrong problem. Billy’s brilliance in this real life story is his recognition of what the real prize was – fielding a championship team. Yes, he had a serious budget constraint, however by focusing his energy at the right problem he was able to use the constraint as a catalyst for innovation.
So what was Billy’s innovation? It started with his integration of “points of view” that came from OUTSIDE the “norms” of his industry. Essentially “re-framing” the problem and the lens by which the problem is viewed. By seeking a model that allowed him to identify undervalued / overlooked players with confidence and explore novel ways to configure these players “on the field”, Billy blindsided his competition with a solution that allowed him to field a championship team IN SPITE of his budget constraint. Think about it, it was BECAUSE of his budget constraint that Billy did the only thing that made logical sense – innovate.
I will write more in the coming weeks about the flawed, dysfunctional nature of current off-shoring models and how Agile and Lean innovators are already taking a page out of Billy’s book. These innovators are exploring POV’s from outside traditional software outsourcing. The results are exciting new models for identifying and fielding “championship teams” capable of driving new software products and services focused on business and customer success while still accommodating pragmatic limits on spending.