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For the past month, soccer fans from around the world were glued to their television sets feasting on the global showcase that is the FIFA World Cup, which just concluded in South Africa.  Vuvuzelas buzzed, incredible goals were scored, yet the global event also reactivated a vigorous debate on the introduction of a goal-line technology in soccer.  Before he made a dramatic U-turn, Sepp Blatter, the FIFA president, posited that any technology would disrupt the world's most popular sport.  Was he right?

He was, of course, talking of disruption in the literal sense. Without a doubt, the introduction of goal line technology will halt the natural rhythm of the game as referees pause to consult with one another and await that confirmatory text message. For Blatter and the soccer romantics, the introduction of technology would forever alter the face of the game.

But the more interesting question is whether this technology will disrupt the game in the business sense. Here a definition is in order. A business disruption, at its most basic, is a trade-off: it occurs in an existing market when an offering is introduced that performs better in some important way for stakeholders than current alternatives do but doesn’t perform as well in some other ways they don’t value as much.

For many technology opponents, the negative side of the trade-off is all too obvious: They argue that adoption will damage a critical aspect of soccer’s value proposition – the universality of the game. According to this line of thinking, a fundamental strength of the game is that it is played according to the same rules and methods of refereeing everywhere at every level, whether in a social game in the dusty streets of Ouagadougou, a pub game in England, or a World Cup game in South Africa. Uniformly applying goal-line technology would surely raise the cost of the game for too many a player or, if applied only in certain circumstances, undermine its global cohesiveness.

For technology supporters, though, the positive side of the trade-off is for all to see. Indeed, goal-line technology would satisfy the referee’s functional job of making sure the correct decisions are made, the emotional job of feeling in control of the game, and the social job of being perceived by both players and fans as a capable and dependable decision-maker. So the value proposition it represents would be compelling to the Jorge Larriondas of this world.

More subtle emotional benefits may be at play here as well: In my many attempts to woo my American friends to what I consider to be the world’s most beautiful game, for instance, they almost consistently site how outdated the sport is, pointing as evidence to such glaring errors as when referee Larrionda failed to award Frank Lampard's superb lofted strike that landed feet over the line behind the keeper during the England-Germany match. This was, without a doubt, an error that would be quickly remedied by consulting the instant-replay technology already the norm in any more technologically modern sport, like, say American football.

Which, then, is more valuable? The flow and the universality of the game or the accuracy of its result? There’s no easy answer here. And neither is there a single, non-contentious answer for all the stakeholders—the fans, the players, the owners, the referees. But as FIFA continues to ponder the adoption of goal-line technology, it will get a more complete picture of all the trade-offs involved by answering the following questions:

• Jobs: What spectator jobs will the goal-line technology satisfy? What about the players’ jobs? The owners’? And the referees’?
• Value proposition: How will technology change the value proposition for the soccer-loving fan? Will the experience for fans, players, and referees in both the amateur and professional soccer leagues be drastically different?
• Trade-offs: What will fans, players, and referees gain or lose from the adoption of this technology? What can be learned from cricket, tennis, rugby, and many other sports that have successfully embraced the use of such technologies?

If goal-line technology fully satisfies the jobs of all key stakeholders in the game, offers the right trade-offs for a compelling value proposition, then, some disruption may be a necessary evil.

On Wednesday I launched the Major League Baseball At Bat app on my iPhone during my commute to work and started watching the Boston Red Sox battle the New York Yankees. Later that morning I watched the end of the game on Major League Baseball's website.

My first thought was, "Wow, what a wonderful world we live in! Crystal clear video on multiple platforms anywhere in the world." My second thought was, "I can't remember the last time I saw the end of a weeknight Sox v. Yankees game. Twelve hour time zone differences have their advantages." (I'm in Singapore.)

My third, most important thought was, "What a wonderful job Major League Baseball has done building a new growth business."

A decade ago, MLB brilliantly decided to centralize its Internet operations. Each of the major league teams signed over control of their digital assets to a newly created organization called Major League Baseball Advanced Media (MLBAM). Each team agreed to invest about $1 million a year for several years to kick-start MLBAM's growth.

When MLBAM started, it wasn't yet feasible to offer streaming video online, so MLBAM's first commercial product was online audio feeds. Its primary target was passionate baseball fans that had moved but still wanted to be able to follow their hometown team. To minimize conflicts with the clubs, it only let people listen to out-of-town games.

Over the last decade, MLBAM has steadily improved its product, adding streaming video, upgrading the quality of that video, and bringing video to mobile devices like the iPhone. While MLBAM doesn't share its financial figures publicly, analysts suspect that it pulls in more than $500 million a year.

Profits from the venture are split equally between the 30 major league teams. Over time, perhaps online offerings will generate sufficient revenues to balance out disparities in local television revenue between clubs in large media markets and clubs in smaller media markets.

Established companies looking to create their own growth businesses can draw four lessons from MLBAM's success:

Read the rest at Scott's Havard Management blog, Innovation Insights.

"College and high school have long been the Petri dishes of football innovation," wrote Charles Seibert last week in the Wall Street Journal. I made note of this last December in this post about the innovative nature of the spread offense in college football.  Innovation in football is a classic case of constraint-driven innovation. Colleges have smaller budgets than pros and make less money, so there's less to lose and more to gain from doing something radical. High schools have even fewer financial resources and even less to lose.

Besides financial resources, there are two main constraints driving innovation in football.  One is talent. High school coaches have the least amount of choice over their players. They don't draft players as the pros do, and they don't generally recruit as colleges do. The play with who they have. And many of the wackiest and most creative offensive schemes in football are designed to level the playing field, so to speak, to make a team that has fewer talented players competitive with teams that do.

The second major constraint driving football innovation is the set of rules that governs the game. If you can come up with something that exploits a loophole, it has the added advantage of initial surprise, until other teams begin to adjust for it. Over the off-season I came across a mention of the A-11 offense being practiced since 2007 in some California high schools. A-11 exploits a couple of loopholes: in scrimmage-kick formation, every player on the offense is eligible to catch the ball. And if you have no offensive players wearing numbers 50 to 79, there can be no ineligible receivers on the offense. After last season, in an effort to take some of the sting out of the A-11, the National Federation of State High School Associations added a rule mandating at least four players on the line of scrimmage wearing numbers 50 to 79.

But the A-11's creators simply tweaked the offense, noted the Oakland Tribune last week: "True innovators don't concede to roadblocks. Not surprisingly, they're still going around, through and over them at Piedmont, executing wacky double-reverse flea-flickers with two quarterbacks in the backfield, three men up front and six players split wide." The A-11's creators suit up those "ineligible" receivers, but just push right out to the edge of what they are elegible to do: they can still carry the ball, throw it, catch screens, and block. They just can't go downfield to catch passes.

In other words, these players can still mess with the minds of the defense, which was a big part of the original point of the A-11 and part of the point of all innovations that push at rules. Noted the Washington Post, "Throughout football's history, offensive innovation has been based on misdirection and deception, from Knute Rockne's box shift at Notre Dame in the 1920s to the spread option of today. But [the A-11] spurred a debate about the sport's tradition and rules of play."

The other main point of A-11 is to add randomness to the offense that results in many more scoring opportunities, as Scientific American pointed out: "In a standard formation with five fixed linemen, a play can unfold with 36 different scenarios for who receives the snap and who ends up with the ball — including a quarterback sneak. In the A-11 offense, because the receivers and linemen (and even quarterbacks) are interchangeable, the number of different possibilities for what can happen on a given play skyrockets to 16,632."

Innovation in the offense hasn't completely sidestepped the pros. Seibert's article discusses the rise of the Wildcat offense in pro football, noting that "Even the biggest and most heavily favored juggernauts can on any given day be suddenly undone by a group of scrappy upstarts with a wealth of passion and a well-wrought stratagem: some riotous, rhythm-ruining array of timely defensive blitzing packages, or a stunningly inventive attack formation such as the new Wildcat offense."

Image from Chicago Sun-Times Sports Pros(e) blog

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• ESPN to open "ESPN Innovation Lab" at Disney's Wide World of Sports to test new broadcast technologies, by Joseph Garcia - OrlandoSentinel.com
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• Q&A with search expert Danny Sullivan on Microsoft Bing, by Nick Eaton - Seattlepi.com
  Audio and an edited transcript of an interview in which Sullivan discusses to disruptive potential of Bing and the ways in which Microsoft might make money from it.

• Council on Competitiveness President to Senate Energy Committee: "America Leads in Innovation, but Is Bleeding Opportunities" - MSNBC Wire Services - msnbc.com

  Deborah L. Wince-Smith, president of the Council on Competitiveness, called for "focus" on turning energy research and development into real economic value.

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• TaylorMade's Innovation Test - BusinessWeek

  "The only way you are going to innovate," TaylorMade CEO Mark King says, "is if you build chaos into the system."

When Oklahoma and Florida line up against each other in the BCS Championship game on Jan. 8, it’ll be spread offense vs. spread offense. In fact, teams running the spread or a variation on it have ended up in every BCS Championship game since 2000.

A look at the spread offense’s rise in college football in the 40 or so years since Mouse Davis of Portland State first introduced it – and the subsequent reaction of the “incumbents” – illustrates some important concepts about disruptive innovation.

Disrupting the Playbook

The spread offense allows more players to be potential receivers – three-, four-, and sometimes five-receiver sets are spread horizontally across the field. The offense often lines up with wide splits between linemen, the better to open up multiple avenues of vertical space for both the running and passing games to exploit.

These gaps also force the defending team to spread itself thin horizontally and make it difficult for them to do their job effectively. Spread offenses are also no-huddle offenses that deny the defense time to substitute players and to communicate effectively.

Why does this work? Simply because running the spread gives offenses many more options to gain yardage per down – and therefore more first downs, and more scores.

Incumbents Initially Don’t Respond to a Good-Enough Innovation

Just as incumbents do when confronted with a disruption, the incumbents in this case – teams from historically strong college football programs and conferences – initially scoffed at the spread offense. As a University of Alabama alumna and SEC football fan, I heard many times the spread referred to as a set of trick plays more suited to run up the score than to win with consistently.

Plus, schools with more traditional programs often took the view that high-scoring pass offenses like the spread were potentially dangerous. After all, the more you pass the ball, the more likely you are to turn it over – or as an old adage goes, “When you pass the ball only three things can happen, and two of them are bad.”

In that sense, the spread offense was a “good enough” disruption. A team does not have to have top talent to win with a spread offense. Since you’re spreading the scoring opportunities around, you’re not relying on any one specific position player to be very good (although talent at the quarterback position helps immensely). The spread levels the playing field, so to speak. Offensive players don’t have to learn intricate skill positions. They simply have to be able to run, pass, receive, and block, diversifying their skills rather than necessarily being the best at any of those things.

The college football elite already had offensive systems in place to win that depended on their ability to recruit top talent from among high school players. These incumbents largely ignored the spread offense at first – until disruptors used it to:

• Turn around a poorly performing program – Texas Tech University, the University of Missouri, the University of Hawaii, the University of Kansas, the University of Utah, and others have ridden the spread up the BCS standings, knocking out more established programs and in many cases showing up in the Top 25 for the first time ever
• Start a program from scratch, as did the University of South Florida, which did not start a football program until 1997 and first became nationally ranked in Division I in 2007
• Rise up from obscurity, even from Division II (something akin to the minor leagues of baseball) and hand an embarrassing defeat to a ranked Division I team, as Appalachian State University did to Michigan in 2007
• Make stars out of players that no big program would ever have recruited, as Texas Tech coach Mike Leach has done repeatedly The last point is worth noting, because as disruptions often do, the rise of the spread has begun to change the business model of the game – specifically the recruiting game. First, more and more high schools are running spread offenses, so the player pool from which colleges recruit now includes many more players who are used to that offense and don’t always adjust well to the old-style run-based offense.

And second, even a school that had recruited top-rated high school talent could be beaten by a team with a spread offense and mid-level talent -- even junior-college transfers and walk-ons. Clearly this undercuts the competitive edge that the top schools have with their scholarships.

The Spread Marches Up-Market

So it was perhaps also inevitable that some incumbents that had held on to more traditional offenses would look to the spread as an innovation they needed to help them win. The spread offense has now made its inevitable up-market march, turning up in modified form in the playbooks of established winners such as USC, Texas, Oklahoma, Florida, and LSU (which has won the BCS title twice).

When faced with a new technology that threatens them with disruption, that they can’t or don’t want to ignore, incumbents can co-opt the new technology into their existing models or try to cram new technology into their existing models. Florida, Oklahoma, Ohio State, Texas, and USC are among the teams that have successfully co-opted aspects of the spread into their offenses. Auburn, Tennessee, and Michigan are among the teams guilty of cramming, which never works.

Auburn and Tennessee – teams from the Southeastern Conference, a notably tough conference where time to turn a program around is rarely granted – lost head coaches this year in the throes of transitioning to the spread. Michigan has had a bumpy season trying to implement a new spread offense with former West Virginia coach Rich Rodriguez. Michigan’s inconsistent season has had fans and analysts grumbling that the spread offense’s days are numbered.

However, it would be a mistake to call a timeout on the spread offense, because it offers true innovation on a number of levels. It allows a coach many more ways to get first downs and score, while at the same time confounding the defense. It has leveled the playing field for recruiting, bringing parity to Division I football for the first time.

Now, who has figured out an innovative new defense that can take reliably apart a spread offense?

Photo by Bill Frakes, SI Vault

This post is coauthored by Innosight Managing Director Matt Eyring.

Seeing coverage of this week’s baseball draft made us realize how much companies can learn about innovation from watching how great baseball teams manage their early portfolio of talent.

Baseball teams have to assemble the best talent possible, just like companies have to bet on the best innovation opportunities. A baseball team chooses between acquiring talent on the free agent market or drafting and building talent. A company chooses between acquisitions or organic growth.

Acquisitions are expensive, but perceived to be lower risk, because the talent (or idea) has proven itself demonstrably in the marketplace (for baseball, that means success on a major-league diamond). Organic growth is typically cheaper, but perceived to be risky because many times highly touted initiatives or prospects don’t pan out.

Baseball teams know that talent follows a power-law pattern, where for every 1,000 players there are 100 players that are capable of playing at major league levels, 10 of whom are legitimately good players, and 1 of whom is a true superstar. The same is true for innovation.

The challenge is: Which project or which player? Just as a baseball team doesn’t have complete information about what a player’s true level of ability is on draft day, you don’t know the real potential of any one innovation project.

Both of you are forced to deal with incomplete data. A team has to rely on a mix of limited performance data at the high school and college level and an assessment of a player’s inherent skills. Good teams collect as much data as possible. They have sophisticated models to project how rough performance can project to the major league level. Good teams also let past patterns inform their decisions. High school pitchers? Very risky. College hitters? Much less risky.

With a well-organized scouting team, you should gather multiple data points in preparation to “draft” innovation opportunities. Get the very best market data you can, look at past successes and failures to see what lessons you can glean, and use qualitative metrics or patterns to guide decisions. ...

Read the rest at Scott's Harvard Management blog, Innovation Insights.

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.