Innovation Hurts

Innovation hurts and it is also subject to constant imitation.  Author Michael Lewis (Moneyball) talks about this and more in an interview he and Billy Beane (Oakland A's general manager) had with the Financial Times this weekend (Let's play moneyball).  Lewis makes the following point in the interview:

"Innovation hurts.  After Beane began using numbers to find players, the A's scouts lost their lifelong purpose.  In the movie, one of them protests to Pitt: "You are discarding what scouts have done for 150 years."  That was exactly right.  Similar fates have been befalling all sorts of lesser-educated American men for years, though the process is more noticeable now than it was in 2003 when Moneyball first appeared.  The book, Lewis agrees, is partly "about the intellecturalisation of a previously not very intellectual job.  This has happened in other spheres of American life.  I think the reason I saw the story so quickly is, this is exactly what happened on Wall Street while I was there."

Wall Street in the early 1980s saw the collision of the old school network with the PhD rocket scientist - - with the advantage overtime going to the rocket scientists because of the enormous complexity of financial products.

Innovation and imitation also intersect in the Moneyball story.  Why no recent World Series for the A's?  The main reason is people and organizations catch-on and catch-up.  The New York Yankees recently hired 21 statisticians.  Innovation as a success variable with a discrete point in time is always short-lived - - the edge will never last.