Innovation Is Like Baseball

I love sports analogies. My latest favorite one is that innovation is like baseball.

Where did I get this analogy? I have been reading Adam Grant’s book Originals for a second time. I had forgotten how many gems are in this book! Grant uses the baseball analogy to describe how innovation works.

According to Grant, in baseball if you are batting .300, you are in the Hall Of Fame. The player with the highest batting average in baseball history is Ty Cobb with .366. What is interesting is that batting .300 means that you are generally not hitting the ball over 60% of the time!

The same principle applies to how we manage our innovation portfolio. It is a great principle for setting expectations with leaders. In venture capital, if your fund is batting .300, you are going to be very rich. One of my favorite quotes is from Fred Wilson, a partner at Union Square Ventures who wrote:

I always like the 1/3 rule, which is that 1/3 of the investments will fail, 1/3 will under-perform expectations, and 1/3 will meet expectations.

What Fred Wilson means when he talks about meeting expectations is getting “…5x to 10x on our money”.

The expectation from a well managed innovation portfolio is that the returns from the successes cover the costs of the failures and produce a healthy return as well.

According to Adam Grant, when we judge greatness in sport, we should not focus on averages but on peaks. The same applies to how we judge the greatness of an innovation portfolio. We don’t need to focus on the averages, but on the peaks. Are innovations that succeed producing high enough peaks to cover the failures and give us healthy returns.

If the peaks are great, then we can feel more comfortable with the failures. The failures are a critical path in search of the high peaks. If we try to avoid the failures and make safe bets, then it will be rare for us to find high peaks.

This is something all leaders need to accept. Innovation is like baseball. Success is batting an average of .300, failing over 60% of the time, and covering the costs of those failures with healthy returns from the high peaks of our successes.

— — — — —

Learn more at www.tendayiviki.com