There are a good number of strategy papers that use sports as a context. This isn't so much because strategy academics like sports or that sports are more interesting than other contexts, though both statements are true. It's mostly because sports (at least insofar as on-field activities are concerned) are more transparent than other businesses. Players are a resource, there are lots of performance metrics available, there's a relatively efficient market for players, and information about their cost is usually available. Sports can be a natural experiment for various theories in strategy.
They are also useful in explaining what it means to have a valuable, rare, inimitable and nonsubstitutable resource, and what it means to have a dynamic capability.
Throughout his career, Randy Moss has been a VRIN resource. Players like Moss (one of the top five wide receivers in NFL history) are not easy to find, nor can you just go to the Patriots and buy him out if you think he'd be more valuable to you than to them. But Moss's role doesn't really change over time. He runs faster and jumps higher than most defensive corners covering him, so he can gather in long passes in or near the end zone. Over the last three years, he's done so more often than anyone else in football. In 2007, he did that more than anyone ever has in a single season, and except for one bitter exception, the Pats outperformed everyone else in the league.
There can't be much doubt that, as a player, Randy Moss is valuable, rare, inimitable and nonsubstitutable, and that this led the Pats to outperform other NFL teams. But athletes are wasting resources; Moss only has so many years left until he no longer outperforms. Nor do athletes, as a rule, reinvent themselves in ways that add to their ability to outperform the competition.
Bill Belichick, on the other hand, is a capability rather than a resource. A capability uses resources, and Belichick, and any head coach, is in the business of deploying resources as best as possible. If Belichick is special as a head coach -- and how can anyone doubt it -- it is because he is dynamic in his capability. That is, he doesn't simply deploy his resources in the same way over time. Rather, he is good at changing how his resources act depending upon that year's team and that week's opponent.
But Belichick's dynamic capability has an odd effect -- it reduces the value of his resources. With one (exceptional) exception, Belichick doesn't seem to much care about the identity or skills of his athletes. Randy Moss is a valuable resource (he's VRIN) but is value to the Patriots seems to be less than his value to other NFL teams. This is consistent with the Patriots' general approach to highly skilled players (with, again, that one exception).
This implies something interesting about management. Value in organizations may not be cumulative or even additive. Adding one VRIN resource to another, or to a dynamic capability, does not necessarily result in performance equal to the sum of the performance boost that each would add alone. In fact, in sports it's easy to see that the result can be negative. Adding one superstar to another, or giving a great coach another great player might lower performance. This implies, in turn, that management is not simply mechanical.
Excellent post - I think that Pat Riley should read this! Phil Jackson would certainly understand.
ReplyDeleteWas this a form of therapy for you?
"Adding one superstar to another, or giving a great coach another great player might lower performance."
ReplyDeleteI can see why it might not be cumulative. I don't see why it would have any significant likelihood of reducing overall performance.
"Adding one superstar to another, or giving a great coach another great player might lower performance."
ReplyDeleteThat might be the case if the superstar recruited doesn't fit well with how the team plays the game or his addition leads the team to lose balance in other areas. Like if the trophy offensive VRIN being played means the team has to do without an unglamorous but necessary defensive player. Real Madrid used to do that all the time.
Or, as might have happened with Moss, the VRIN superstar is more valuable to the team in an unglamorous but necessary role. For example, if the star wide receiver's real role is to draw an extra defender with him, allowing other people to catch all the passes.
ReplyDeleteOr the clearest examples: mergers sold on the promise that 2+2 is greater than 4 (synergy), but where it turns out that 2+2 is less than 4.
ReplyDelete