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As September wanes and summer fades the Oakland Athletics are once again in position to finish first in the American League West. Despite sporting a perennially low payroll ? this year?s $62 million ranks in the bottom third of the league, less than 1/3 of what George Steinbrenner doles out to his Yankees ? this will most likely be the fifth time in seven seasons that the A?s make the playoffs. This unusual success has been driven by the unconventional and counterintuitive management principles developed by A?s General Manager Billy Beane and chronicled by Michael Lewis in his bestseller, Moneyball. Essentially, Beane has been able to consistently acquire undervalued players that subsequently outperform expectations, leading to winning seasons at a fraction of the price paid by other contending ball clubs. In an article this morning on the resurgence of A?s designated hitter and Most Valuable Player candidate Frank Thomas ? a former superstar widely considered to be washed up last winter when Beane signed him for a measly $500,000 ? the New York Times calls Oakland?s recurrent success ?baseball?s ultimate mystery.? So how do they do it? By executing a management strategy that aligns neatly with certain aspects of Disruptive Innovation theory. As cash-rich big market titans like the Yankees and the Red Sox fight to sign the most expensive players every winter, the A?s find success at radically lower price points by using counterintuitive metrics to evaluate market worth. Adhering to their principles, Oakland disrupts the Major Leagues from the low end year after year. Lewis goes into great detail in his book, but, in brief, the A?s value players according to nontraditional measures of performance that tie closely with the ultimate Job to be Done: plating more runs than your opponent. Traditional baseball talent scouts look for players who excel along accepted dimensions ? great athletes who run, jump, hit and throw with the best ? believing that they will then develop into great baseball players. Unfortunately, baseball is complex and notoriously difficult to predict, and many blue chip, expensive, and ?can?t miss? prospects fail to live up to their potential. Beane, therefore, looks for players who do the specific things that lead to winning ball games: batters who get on base and therefore don?t make outs and pitchers who throw strikes and therefore get batters out. Eschewing conventional wisdom and zeroing in on the Job to be Done has enabled the A?s to uncover a wellspring of hidden talent in players who do not fit the traditional mould of success (and are therefore available at bargain rates). They have signed and developed players who other teams considered too fat or too slow, batters who didn?t hit for enough power to draw attention, and pitchers who do not throw particularly hard. Many have grown into competent ? and even excellent ? ball players (three early stage experiments featured in 2003?s Moneyball, Nick Swisher, Mark Teahan, and Kevin Youkilis, have blossomed into legitimate stars this season), and year after year the A?s field winning teams. In Disruptive Innovation terms, athletic skill is overshot when it comes to talent evaluation. Things like mental makeup and plate discipline are often misunderstood and consequently undervalued. Aggressively pursuing market opportunities ? in this case, signing and developing undervalued players ? produces sustained success. The ultimate lesson here is that the forces underlying Disruptive Innovation are based on common sense and can be readily applied to pursuits beyond the business world (well?fine, baseball is ultimately a business too). Always think carefully about how closely prevailing notions of value track with Jobs to be Done, and be bold about seizing opportunities that are not commonly seen or understood.

Warner Music has taken a step away from the pack of other music companies to ink a deal with the video sharing web site YouTube. This comes just one week after the CEO of Universal Music Group called out YouTube claiming that they violate copyright regulations by hosting content on their site that is uploaded without the proper approval of its owners.

Here's an overview of the how the partnership will work...

"YouTube will allow users to legitimately incorporate Warner content into their own video creations, while ensuring that Warner continues to receive a proportion of the advertising revenue generated."

...and here a few things that we like about Warner Music's approach

• Innovating the business model - Warner will receive non-traditional revenue from ads placed next to Warner's content or user-generated content that features Warner music or videos. This differs substantially from how music companies traditionally make money by producing and selling albums
  
  
• Understanding Jobs - YouTube has proven that there is an important Job to be done of "give me a place to create and/or post cool video content". It has also shown that there is an audience for this user-generated content. YouTube was reported to have more than 100 million videos viewed on a daily basis
  
  
• Experimentation - Warner Music does not appear to view this deal as the "silver bullet" solution but as an experiment where they can invest a little, earn a little and learn a lot
  

Few industries have felt the disruptive impact of the last decades biggest innovation, the Internet, more than the media. Newspaper circulation has dropped; billions of advertising dollars have swung from broadcast and print outlets to the web; and music and movie companies have seen their intellectual property high-jacked via peer-to-peer technology.

From 2000 to 2002 alone, sales for the worldwide recording industry shrank close to 20 percent, from $39 billion to $32 billion, according to the Recording Industry Association of America.

Whats more, lately online competitors have even begun to muscle their way into the print world. Last fall, for example, Google announced it had begun reselling ad space in ink-and-paper journals. In January, it purchased dMarc Broadcasting, a radio advertising firm; company executives also publicly discussed a possible move into TV ads.

The news is not as odd as it may seem. Google realizes that the more ways it can reuse and resell content"whether in cyberspace, in print magazines, or over the airwaves"the more money it can make. And thats a lesson that could benefit all traditional media companies.

To succeed in this new environment, traditional media players need to imitate the strategies of their biggest new threat: free-content providers employing a variety of reuse and re-run tactics. Today, free blogs give content more reincarnations than Houdini. They compress initial release and re-run cycles"sometimes to an instant"and they link their content to others, creating powerful, self-reinforcing networks.

Cornerstone blogging technology Really Simple Syndication (RSS) allows bloggers to transmit content around the Internet to be repackaged into email or personalized Internet homepages. Rather than being tied to a conventional re-release schedule, RSS allows near instantaneous repurposing. By offering as-good-as-new content, bloggers grab wider audiences without making additional investments. In this Strategy & Innovation article, which you can read by subscribing here, three partners of the consulting firm Bain & Company, offer valuable lessons for incumbents and describe how some big media companies have started to co-opt the logic of bloggers.

Each issue of S&I, we take a look back at a past Innovators Insight to see how our analysis has held up. Recently, we took look at Insight #3, Boeings High-Flying Bet. The Insight suggested that Boeings Dreamliner project was a risky bet for the high end of the market and that the company ought to develop a disruptive plane to fuel the creation of an air taxi industry. You can read the entire article by subscribing here, but an excerpt is available below.

At the end of 2003, Chicago-based Boeing was reeling. A high-profile scandal had claimed its CEO. Its fiercest rival, Airbus, had surged past Boeing to become the worlds largest airplane manufacturer. Analysts expected the upcoming launch of Airbuss massive A380 super jumbo jet to further consign Boeing to also-ran status. What has happened since?

Boeing has bounced back by fighting Airbus in a creative way. It didnt try to one-up Airbus with an even bigger plane than the A380, which will seat 550. It announced its plans to create a 250- to 350-seat, super-fuel-efficient plane. Boeing expects its 787 Dreamliner to be on the market in 2008.

In November, Boeing announced another attack against Airbus: Plans to expand its jumbo 747 to compete against the A380. The 747-8 will cost about $4 billion to develop (versus close to $15 billion for the A380), will have 450 seats, will be more fuel economical than the A380, and will not require airports to redesign gates to accommodate the planes.

In December, Boeing scored several large sales wins as Asian carriers pinched by record high fuel prices chose the Dreamliner over the A380. Boeings momentum has led investors to believe that its bet on planes that let airlines efficiently and economically transport passengers over moderate to long distances will trump Airbuss bet on pure size. Boeings stock price, which stood at $41.04 when our Insight came out, this year reached $68.17 on January 20, a gain of nearly 70 percent.

So Boeings bet in its core business has thus far turned out better than we expected. Is it smooth sailing ahead? Not exactly. The battle for the high end is certainly not over: Airbus still booked more orders than Boeing in 2005. And Boeing still has to fight against Airbus for every deal, which means providing deep discounts to carriers. In this Innovators Update, we examine Boeings future prospects and suggest a disruptive strategy that can help them confront not only Airbus, but companies competing in the emerging light jet market, such as Eclipse Aviation, Adam Air, Embraer, and Cessna.