How to identify companies desperate, hungry, and ready for change
November 18, 2016 7:39 AM Subscribe
So I just finished watching the movie Moneyball. It's a pretty entertaining flick if you haven't seen it yet. My question has to do with change management and how to identify companies ready for change. More to my question below the fold.
The biggest lesson I took away from the film has to do with WHY the innovative player evaluation idea was successfully adopted by the general manager of the A's when no one else would listen to the Yale graduate character's ideas. In the movie, the general manager was so desperate to find a way to level the playing field and overcome his team's steep payroll disadvantage that he was willing to throw out the collective wisdom of his scouting team and start looking at the problem of fielding players for his team in a completely new light.
Is there any way to identify people like the general manager character who are in a position of decision making authority and are willing to take a chance on something that hasn't been battle tested before? These people seem to be very rare.
The reason I ask is because I have my own innovative inventory replenishment method for retail stores and the movie gave me the idea that maybe the reason I haven't been able to sell the idea successfully yet is because I haven't found someone desperate enough and ready to try something different so far. The whole don't fix what isn't broken thing. How do I find businesses in need of a turnaround?
The biggest lesson I took away from the film has to do with WHY the innovative player evaluation idea was successfully adopted by the general manager of the A's when no one else would listen to the Yale graduate character's ideas. In the movie, the general manager was so desperate to find a way to level the playing field and overcome his team's steep payroll disadvantage that he was willing to throw out the collective wisdom of his scouting team and start looking at the problem of fielding players for his team in a completely new light.
Is there any way to identify people like the general manager character who are in a position of decision making authority and are willing to take a chance on something that hasn't been battle tested before? These people seem to be very rare.
The reason I ask is because I have my own innovative inventory replenishment method for retail stores and the movie gave me the idea that maybe the reason I haven't been able to sell the idea successfully yet is because I haven't found someone desperate enough and ready to try something different so far. The whole don't fix what isn't broken thing. How do I find businesses in need of a turnaround?
Movies leave a lot unsaid.
The Oakland A's didn't really own this system wholeheartedly. If you look at it closely, the organisation faced a budget crisis that precipitated Beane's formula, which was actually less dependent on numbers as it was on human resource development on the long chain of minor league teams the entire industry requires to train new professionals.
Also do not forget the A's have a guaranteed income from national TV rights. Who else has a farm system for HRD and guaranteed income?
Have you tested this inventory replenishment system? It's tempting to reach the low hanging fruit but struggling companies have long payment periods and also if they are publicly owned your innovation could be adversely affected by publicity if it can't be scaled.
Think about who would be a right-first-time customer, not a pilot or an earnings buster.
posted by parmanparman at 8:58 AM on November 18, 2016
The Oakland A's didn't really own this system wholeheartedly. If you look at it closely, the organisation faced a budget crisis that precipitated Beane's formula, which was actually less dependent on numbers as it was on human resource development on the long chain of minor league teams the entire industry requires to train new professionals.
Also do not forget the A's have a guaranteed income from national TV rights. Who else has a farm system for HRD and guaranteed income?
Have you tested this inventory replenishment system? It's tempting to reach the low hanging fruit but struggling companies have long payment periods and also if they are publicly owned your innovation could be adversely affected by publicity if it can't be scaled.
Think about who would be a right-first-time customer, not a pilot or an earnings buster.
posted by parmanparman at 8:58 AM on November 18, 2016
It's an imperfect analogy. Billy Beane wasn't just a guy who heard a good idea and decided to try it out. He was in danger of not only losing his job if he didn't, but possibly never getting another job in that industry again. Baseball is an extremely exclusive industry. There are only 30 jobs, and countless younger people coming up through the ranks. There aren't many businesses like that. If you open a retail store and it closes, you can still get a job as a manager at a big box store. Most business decision makers don't face that kind of pressure.
The other thing that's different is that sabermetric ideas were testable using publicly-available data. By the time Billy Beane starting using sabermetrics with the As, Bill James had been writing for over twenty years. He had several books' worth of predictions, and you could very easily see whether they'd been right or wrong, and why. Sabermetricians could say something like "pitcher X will probably have a better year this year because last year their defense-independent stats were horrible, and that should regress to the mean", and you could check at the end of the year to see if pitcher X had a lower ERA or more wins. After twenty years of this, there's not a lot of risk. Billy Beane didn't just say "oh, this on-base percentage idea sounds good, what the heck, why not?". And even if he did, baseball is different in that you can pretty much predict the outcome based on these stats. It's not often the case that a team has great hitters and great pitchers, and still fails to win.
Your inventory replenishment system doesn't have that same luxury. You can't predict that your system will reduce restocking times by x amount, because you have nothing to compare it to. Nobody knows what the range of restocking times is. And you can't say that reducing restocking times will improve sales or profits, because there are so many other factors in a business. Maybe it's in a market where there's no demand, or there's a recession and people aren't spending as much, or the product isn't priced correctly.
What I would suggest is to find a way to objectively demonstrate that your system works better (easier said than done), and then find people whose businesses are struggling specifically because they don't seem to be able to restock inventory quickly enough. Small businesses are better targets. (This, incidentally, is why it took 20+ years for sabermetric ideas to be adopted by MLB teams. There are no small MLB teams; while market size and profitability vary, they're all roughly the same size.) Try to find a small local business that seems to be out of stock of a lot of items, and then show them (objectively) how your system would improve their process. Good luck!
posted by kevinbelt at 10:03 AM on November 18, 2016
The other thing that's different is that sabermetric ideas were testable using publicly-available data. By the time Billy Beane starting using sabermetrics with the As, Bill James had been writing for over twenty years. He had several books' worth of predictions, and you could very easily see whether they'd been right or wrong, and why. Sabermetricians could say something like "pitcher X will probably have a better year this year because last year their defense-independent stats were horrible, and that should regress to the mean", and you could check at the end of the year to see if pitcher X had a lower ERA or more wins. After twenty years of this, there's not a lot of risk. Billy Beane didn't just say "oh, this on-base percentage idea sounds good, what the heck, why not?". And even if he did, baseball is different in that you can pretty much predict the outcome based on these stats. It's not often the case that a team has great hitters and great pitchers, and still fails to win.
Your inventory replenishment system doesn't have that same luxury. You can't predict that your system will reduce restocking times by x amount, because you have nothing to compare it to. Nobody knows what the range of restocking times is. And you can't say that reducing restocking times will improve sales or profits, because there are so many other factors in a business. Maybe it's in a market where there's no demand, or there's a recession and people aren't spending as much, or the product isn't priced correctly.
What I would suggest is to find a way to objectively demonstrate that your system works better (easier said than done), and then find people whose businesses are struggling specifically because they don't seem to be able to restock inventory quickly enough. Small businesses are better targets. (This, incidentally, is why it took 20+ years for sabermetric ideas to be adopted by MLB teams. There are no small MLB teams; while market size and profitability vary, they're all roughly the same size.) Try to find a small local business that seems to be out of stock of a lot of items, and then show them (objectively) how your system would improve their process. Good luck!
posted by kevinbelt at 10:03 AM on November 18, 2016
You might want to read Crossing the Chasm, which is all about how to sell technology to early adopters, which can be kind of easy when you find the right audence, then how to move that solution into the mainstream. You don't want desperate, they won't have money or time. You want innovative and early adopter.
posted by COD at 10:14 AM on November 18, 2016
posted by COD at 10:14 AM on November 18, 2016
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