Real-options thinking in knowledge-work has a catchy three-part mantra (made all the more memorable if you’ve ever met Chris Matts, Olav Maassen or Olaf Lewitz):
Options have value.Options expire.Never commit early, unless you know why.
If only someone had told the Los Angeles Dodgers, who this past weekend neglected that final bit of wisdom.
You don’t need to be a baseball fan to learn from their mistake, given a little background. In Major League Baseball, teams are allowed to shuttle players between their major-league club and their minor-league club (a kind of reserve team). The major-league club has a roster maximum, so in order to add a player (either returning from injury, coming from another club or up from the reserves), the club needs to subtract someone, usually by sending him to the reserves. When a player goes to the reserves, he must stay there for at least 10 days before the club can recall him to the first team.
Well, the Dodgers needed an extra pitcher last weekend, so they called up their top prospect Walker Buehler for one game, assuming that one of their regular players would return from injury soon afterward. Buehler played well and showed that he was worthy of another appearance. However, the club optioned (literally the term that they use in MLB) him back to the minors, but before they learned that the injured player they were counting on returning had suffered a setback. As a result, Buehler might have been in line for another start later this week, but he’ll now have to wait 10 days before he can return. Had they waited only hours later, the new information about their returning player would’ve been available to them.
The Dodgers committed early, but they didn’t know why. Or rather, they likely didn’t think they were committing early because they assumed their plan would not change. You would think that professional-sports teams would have a better sense of the complex domain they’re working in, what with player injuries being a particular part of the game. Especially Rich Hill injuries (sorry, Dodger fans). One problem in committing without thinking is that the costs of premature commitment aren’t always visible until too late, which the Dodgers now painfully realize.
It’s easy to see the folly in the Dodgers’ oversight. Yet we do the same thing in our knowledge-work organizations, committing too early to projects, tying up people and resources that could be more valuably deployed elsewhere, or simply starting a bit of work before doing a bit of analysis to foresee upcoming dependencies. Deferring commitment is an organizational discipline, so it starts with practice. Most people that I’ve worked with over the years don’t naturally think this way, so starting simply can help. Asking the basic questions “Do we need to commit to this now, or can we wait?” and “What’s the cost or tradeoff if we wait on this?” can help build options-thinking. You might also use a practice like risk profiling to gain a better sense of your options — and when you might need to responsibly commit. Using metrics like delivery times and their percentile confidence intervals can inform commitment decisions. For instance, if a standard work item is completed 85% of the time in 10 days, and it’s a low-risk item, you might reasonably decide to defer commitment if you’re 25 days out. But without tracking delivery-time data, you’re going to be making guesses and relying on assumptions. Just like the Dodgers.