Game Changing Risk & Globalization

November 1, 1913, New York, NY – College Football

In 1913 the Ivy League owned college football, and Army dominated the Ivy League. That November, a small, financially strapped Catholic men’s school went east to take a crack at the big guys.  With over 5,000 spectators and sports writers from major New York news papers in the stands there was plenty of coverage for what promised to be a somewhat boring game between Army and a virtual unknown (at least outside of the mid-west).

Army was undefeated and had a shot at the National championship.  That was until Gus Dorais threw something called a “forward pass” to a receiver named Rockne….Knute Rockne. During the game, Dorais completed 14 of 17 passes for 243 yards.

Defense?  Army had no defense!  According to Rockne, “Everybody seemed astonished. There had been no hurdling, no tackling, no plunging, and no crushing….just a long distance touchdown by rapid transit.”  There were no play books for defense against the forward pass…this had been a game of pure muscle and beef on the line. With the operative words being “had been.” Nobody had done this before.  Rockne was catching on a dead run at 30, 40 and 50 yards.  As the “Fighting Irish” marched off the field the score was 35 – 13, and the rest, as the say, is history.

There are lessons to be learned here.  First, pay attention when the rules of the game change.  Yes, the forward pass was legal, but heavily restricted prior to the 1913 rules change. The old regulations limited the pass to 20 yards forward of the line of scrimmage, and to a stationary receiver, i.e. he could not be in motion.  Second, pay attention when the technology changes.  Another 1913 rule change altered the shape of the football from oval to spherical, allowing it to be thrown harder, further and more accurately. And third, adapt your playbook or suffer the consequences.

Global Supply Chain – 20XX

For the past 20 years our focus in supply chain has been locked into a “running game” of taming “demand uncertainty.”  The state-of-the art being “just in time” manufacturing where little inventory is carried before put into immediate use.   In addition, outsourcing has further reduced cost and transferred many non-core, and at times even core, business processes to globally dispersed, third party facilities to take advantage of low labor costs and cheap global logistics.

There is no free lunch.  You want global reach?  Well, you also get global risk.  Today more things can also go wrong, in more places, and with more effect than ever before.  Upstream trading partners are much less “visible” while simultaneously assuming more and more control over key manufacturing and process operations. Supply side risk is the “forward pass” of globalization.  Is it a threat?  Ask Mattel.  Ask P&G.  Ask Colgate.  Ask Wall-Mart.

Asymmetrical football

Had Bob Costa been around in 1913 for Notre Dame/Army he might have called it “asymmetrical football.”  That’s when the weaker opponent uses a “game changing strategy” to negate the strength of its opponent.  Simple: if you can’t win against the muscle of the defensive line, put the ball in the air. That was a smart strategy for Notre Dame, but there is an even more important lesson.

A second definition of “asymmetric” involves the multiplier effect.  That’s when one unit of input into a system yields more than one unit of output. Continuing with our football example, prior to the ND/Army game, football was exclusively a running game.  One new unit of input into the game – the pass – yielded numerous outputs, i.e. different combinations of moving the ball forward of the line of scrimmage.  You could still run the ball; you could do a short pass. You could do a “Hail Mary.” You could do a screen; you could do a lateral and then pass, etc. For the more mathematically inclined, outcomes were no longer linearly bounded[1].  For coaches, it was a supreme headache!  Passing exponentially increased the complexity of the game and made any sort of accurate play prediction virtually impossible.

And another thing, Dorais wasn’t just throwing footballs; he was throwing bricks!  And the New York media made sure the other coaches got the message…like a brick in the head, the forward pass couldn’t be ignored.  Unfortunately supply chain mangers and their trusted advisors might have harder heads than college football coaches. Remember, people have the amazing ability to deny, displace, or otherwise ignore a threat, either failing to “notice” or failing to correctly interpret and/or act on game changing events.

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