Saturday, May 10, 2008

moneyball - time to question?

mr.k happened to come across michael lewis's "moneyball" - a book on a small payroll baseball team - oakland athletics, who consistently surprised everyone with their performance often overcoming higher payroll teams..much like say our rajasthan royals in did they do it was a question everybody wanted to understand..the answer - "Billy Beane", a failed baseball player and posibily, the edward de-bono of sports, who challenged the conventions, wrote his own theory and ultimately exploited "market deficieny" and kept is quite interesting to read..the fascinating part of the whole part was how beane went about questioning the accepted wisdom endlessly, obsessively and exploited the loop-holes to such a way that every other team started following it..
check out for more.
after reading the book, mr.k started pondering if moneyball is something that could work in software services?...the premise being "are we measuring the right things"..and more importantly "are we asking the right questions?..
starting with the chronic irritation of attrition and retention and the almost paranoia filled reaction..the general thought is a higher attrition percentage impacts business, but does it stand true all times?...should we move from measuring the impact of attrition on case by case basis rather than a mere number?..should we not start asking the question "does it really matter if this person leaves"? and "how do i replace the end-result this person brings to the table, that i need to replace" ..will our approach to solving the problem change if we ask this question?..
thinking loud on the problem above, if we need to find a solution with least error, then the next question is "are we measuring the correct performance parameters of a person"..for instance, in today's world - most problems we encounter in software services are often repetitions and ideally needs "improvisation to existing solutions" rather than coming up with a brand-new one..and if we do see this statement as a valid happening x% of times, then 'paying premium money to the most tech savvy/intelligent/innovative guy' might not be needed..rather "finding a person who has the traits to trust available information store and ability to understand situations" would be the next question is "how do we find out traits of an individual"..and if we have to do this during hiring, then "is it more important to check the analytical skills/social skills and behavioral traits than his expertise"?..and if a company has to successfully do that, would it make sense then for companies to start tying up with academic institutions and finding potential candidates even during their education than just interviews?..sort of scouting ?..
and if we do establish a system which can consistently tell value of a person and the value should be judged solely by what he/she bring to the business, then are we in a stage to alter their pay structure to pay/value than by designation/experience etc..would it make sense for instance to pay a person who would bring value now and for the next 2-3 years than to pay highly to a person who is bringing equal value now but will not in the coming years?..would it then be a possible strategy to do a forced attrition?..creating situations of discomfort to highly paid people whose individual ROI is decreasing?...
the other area in software services that possibly is not adapted to changing times in using the right statistics is the so called product quality measures?..for instance a lot of productivity measures are still looking at lines of code, defect rate etc,..but in a global model "what ensures good productivity?".. - Constant communication? and are companies measuring it?...increasingly car manufacturers are building different models using the same base targeting different clientele, and software services still hasn't learnt the "art of re usability". would it have been different if firms put emphasis on synergy/communication rather than conventional measures linked to workunits..

is it time to re-look at some of these and quite possibily a possible market deficiency can be exploited to gain advantage. a simple market deficiency one can observe is "people talking too much / too early in meetings"..the chances of looking like an idiot is high..would it not be an advantage to listen to multiple perspectives and use that as a cake over which your perspective can be added as cream.."where is effective listening gone"

Disclaimer: the author does not use any moneyball techniques, but the approach to moneyball is an interesting one.

Moneyball gave Billy Beane a lot of limelight, but the book's success killed the market efficiency. Beane built his teams by hiring a lot of younger players with low cost and kept winning. Once moneyball became a conventional theory by itself, the richer teams were paying more to these younger guys than Oakland could. So now Billy Beane is tweak moneyball to identify other market deficiencies..he has been quoted as saying "even if something gives a 5% improvement to existing structure, it needs to be seriously looked at".

at the end of it, adaptability is the name of the game..

1 comment:

nitesh said...

Good one :)