Playing Moneyball in the Info Economy

There are three types of competitors in the information economy. There is one group who preferred to find the hidden value in their settings and beyond. The second group would rather create value. ... Members of the last group usually possessed the strategic position to wait for the finders and the creators of the value to visit their terrain.

Each group has its positives and its negatives. Today's, we will briefly focus on the topic of finding value.

Abstract
In life, most companies do not have the capability to buy the best talent. Some of them would quietly presumed that they will never be contending for the "Number One" position in their niche. They are usually focused on low risk, low rewards ventures. Basically, survival is the name of their game

Read the Big Tangible Picture (BTP) of Your Terrain and Beyond

Regardless of their business terrain, some principals utilized a risk-cost benefit type of analysis to find a low risk, low cost, medium to high reward talent. While there are others who believed in going to the ground level and "feeling" out the talent . ... There are a few who utilized both approaches "objectively". ... Interestingly, there are "number game" specialists who believed that they can replace their "non quantitative" counterparts with "new and improved" technology. ... Realistically, one can rarely replace the world class strategic experience of "talent hunting" with "new and improved" technology that constantly evolve..

Finding Talented Value at Unidentified Places

Not every brilliant thinker-doers attend the upper tier schools, they could go to the various small schools. Seeking these untapped talent means going to different places and talking to the relevant and experienced professionals. Asking them who is doing academically well and having the "out of the box" type of thinking to innovate. It is also significant to ask for that certain talent who is seeking the opportunity, whether he/she has the inkling to advance to the next level.

Ruminations from the Compass Desk
Ultra class sport strategists (like the late Bill Walsh, Bill Belichick, etc.) have always evaluated the new talent while being mindful of their cyclical value. They have always emphasized on the practice of replacing their run-downed talent one season sooner than one season later.

Regardless of the means for securing value, one must be aware that there is a timeline for everything.Compass Rule: Always be mindful of the seasonal cycle of anything relevant.

Some More Thoughts on Oakland A's Moneyball

If the prowess of the A's Moneyball process were concealed from the public for a few more years, could the A's have repeatedly reached their goal of playoffs? ... At this moment, no one knows. Our experience tells us that it would have given the A's a better possibility for getting better deals. Once the book was published, many teams refused to trade with the A's.

Those who possessed the competitive advantage, usually do not say anything to anyone.

The Compass View

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Click here for an interesting story on taking various macro risks in the information economy.

Regardless of the settings, one needs to be conservative, totally focused and not expand beyond their means. ... Good times and bad times can never last forever. Things always come in cycles.

- The Nameless Compass Strategist

Lessons from the Moneyball Movie

(wikipedia)

The movie Moneyball is being released on Friday, the 23rd of Sept. ... If you are interested in learning about another unique strategic assessment process, see this movie or read the book. ... Portions of this movie were based on Michael Lewis's best seller Moneyball.

Quick Synopsis

The Oakland A's and many professional baseball teams have been using a talent evaluation process called Sabermetrics for many years. The A's management discovered a few unique indicators that most of its implementers did not noticed. They became successful with their Moneyball process, that many teams began to copy their process.

It was good publicity for the A's. However, no good deed goes unpunished.

Since the inception of the Moneyball book, the Oakland A's has not won the World Series . However the Boston Red Sox team who possessed a larger foundation of intelligence gathering resources, economics and logistics, used the Moneyball process as a part of their strategic foundation to win two World Series.

Side note: Since the 2007, the A's have not reached the playoffs.

During the A's successful years, an associate and I had a discussion with a local sport media insider on the Moneyball phenomenon He told us that the A's management should have kept the technicalities behind the process a secret. It was a major blunder to allow Michael Lewis to get an inside look on the team's decision-making process. Even Michael Lewis agreed that his book caused the A's to lose a few opportunities.

In the information economy, successful innovation is regularly imitated. ... The larger and well-resourced competition would usually adapt any successful process or tool quite well. In most cases, they can afford to err. The smaller competitors regularly operated on the margin of minimal to zero error. The outcome is obvious if they blundered. In most cases, they regularly focused on low-risk, low reward ventures.

Ruminations from the Compass Desk

Lesson #1

Never provide your competition the opportunity to use your trade secrets against you.

Lesson #2

In an information economy, every relevant competitor has a similar tool set. Obtaining the exotic skill and the strategic experience to master the tool is always the challenge. Keeping it as a secret is the other challenge.

Lesson #3

It is nice to cheer for the underdog. However, the majority of the masses only remember the grand winner, not the losers.

Lesson #4

The knowledge of one's grand terrain and the resourcefulness of each contending competitor usually enabled the "persevering" strategist to succeed on the long run. (Read the last quote from Chapter 10 of the Art of War.)

Lesson #5a

No specific process is perfect. The process evolves due to terrain changes

Lesson #5b

It is the perfection of the process execution that counts.

Lesson #5c

Regardless of the process or strategy, the attribute of talent and the accessibility of resources usually prevail in extreme situations.

Lesson #5d

In a predictable (and even parity-based) situation, the strategic experience of the chief decision maker becomes relevant.

Lesson #6

The knowledge of identifying the underdog and the favored is quite important in all strategic situations.

Lesson #7

When the scarcity of resources becomes tangible, the competitive strategists usually spend more time assessing the specifics.

Lesson #8

Connecting the specifics to the grand overview usually means that one has a understanding of the Big Tangible Picture (BTP).

Lesson #9a

One's understanding of the Big Tangible Picture is usually proportional to the implementation of their strategic advantage (strategic power)

Lesson #9b

No strategic advantage (or strategic power) lasts forever.

Update: Here are some interesting reviews for this film: #1; #2; #3; #4; #5 # 6 and #7 .

The Essence of Strategic Success

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What usually enables the successful strategist to prevail over the day to day challenge of their endeavor?

"It is persistence which wins many challenges. And persistence is strictly a matter of force of will. ... Sometimes, the outcome of a competition is not decided by the first strategic move or even the third. ... Rather, fortitude is involved. Force of will is persistence. If one does not lose their sense of self, he or she will persist and their strategic power will not diminish. ... On the contrary, it will endure after their body has wasted away." - A Nameless Strategist

It begins by having a Big Tangible Picture (BTP)

The Practice of Scripting

It is football season again. In our case, we belong to to that unique group of serious fans who enjoyed the x's and o's of this great game. We also preferred to know what are the best practices that are being used to enhance a team's strategic performance.

One specific practice that we have adapted from the Bill Walsh's West Coast Offense system is the 25 Play (Starter) script.

Following are some of the objectives behind the 25 Play Starter script:

1. To test the tendencies and the possible weak points of the defense with various formations, shifts and motions;
2. To identify the defensive reaction to certain plays;
3. To recognize the decision process of the defensive play caller; and
4. To use the outcome of certain scripted plays to stage the opposition at a later part of the game.
5. To determine whether it is possible to impose one's will's onto the opposition's psyche.

The starter script is one of the most well-used tools in the game of football.

Some preferred to use a 15 or 20 play starter script to pursue the immediate weaknesses of their targeted opposition. This step requires the following: profound intelligence collecting process and implementation; deep strategic assessment skills, a good plan, a deep understanding of strategic fundamentals.

In summary, the script is more about choosing what plan to follow and less about developing a plan on the spot.

You can read more about it by clicking on this link, this link and this link .

From our experience, a script of tactical moves is a good tool to use in an unpredictable setting, . Why? Ask us.

Here is a list of questions that you should always think about:

1. Have you always assessed your competition before the situation begins?
2. How do you usually assess your competition?
3. Do you know how to integrate your intelligence gathering to your script?
4. Do you ever create a starter script of tactical plays against your competition?
5. Do you know the rules for building a starter script?
6. Do you know how to use the outcome of certain scripted plays to stage the opposition at a later stage of the situation?
7. Do you know when to change the order of the script?
8. Do you know when to exit from your script and when to reuse the script again?
9. Do you know how to use the script as a psychological tool?

Compass Rules:

• A specific process does not make a strategist. It is the strategist who makes the process effectively effective.
• Good strategic assessment is the 1st step to creating a predictable setting.

Q: Do you know the key to developing a very good script?

Final Notes

Based on our experience, our customized script process is a very good planning tool. The emphasis of this script is focused on being prepared for various contingency situations.

It can also be used for scenario modeling.

In most cases, we usually re-configured the format for various strategic projects. For the Chinese strategic fanatics, we have an experimental version that is based on Sunzi's (Sun Tzu) principles of efficient competition. If you are interested in learning about this tool, send us a message by clicking on this link.

Thanks!

Ruminations from the Compass Desk

The above picture is from Standupdesks.com

In the past 10 years, we have researched the topic of how people practiced the art and the science of strategy.

Some segments of our research were based on our many sessions of observing and studying how people planned their strategies and managed their decisions.

Following are some of those points that we have learned:

• They simplified their strategic assessment activity; 
• They usually do not understand their competition;
• They usually were not willing to spend a great deal of time to collect specific intelligence;
• They preferred to focus on their strengths without ever thinking about their own weaknesses;
• They preferred to plan without having any detailed contingency options;
• They liked their decision-making process to be quite simple;
• They had a tendency to confuse their common sense with their so-called intuition;
• Some of them have no sense of risk/consequences;
• Some of them took advice from sources who could be categorized as "moral hazard"; and
• Some of them were not always willing to follow a multi-step process.

We will explain the reasoning behind each of the above points in a future post (or in our future book).

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Compass Principle 

• The successful strategists are those who understand the what's, the hows, the wheres, the whys and the when's.

Compass Postulates

• For every principle or rule, there is an exception.
• When the configuration of a situation is understood, one could find the exception.

Q: Do you know the exceptions to the strategic rules that you have been operating under?

The Dao of Strategic Assessment #6: Assessing the Situation

Compass Rule:
Read the Big Tangible Picture (BTP) before deciding anything strategically.

Once the Big Tangible Picture (BTP) is understood, do you know what to do with the information? Can you connect your grand objective to the state of your grand settings? Do you have the determination to make the right decision?

The Next Step

There are certain situations where the underdog realistically viewed the Big Tangible Picture (BTP) and finally perceived that there are no automatic wins. He or she realized that each and every major strategic decision usually possess a dichotomy. There will be tradeoffs and compromises.

At some point of time, the underdog would also apprehend that the height of the climb for success is proportionally to the intensity of the competition.

Click here on an interesting story on Tiger Woods .

Q: If you were Tiger Woods, would you have made the decision of stressing the body intensively for the opportunity of competing and prevailing at the highest level of your sport?

Thriving in the Info Economy (1)

It is difficult to thrive in our information economy when we are constantly interrupted and overloaded with tons of unnecessary information. Some of our associates have already stopped viewing TV news and only surfed the web. ... Regardless of the cost of accessing data, how does one filters out the irrelevant data and gets to the facts?