NHL Draft Has Lessons for Assessing Risk and Opportunity

Posted: June 28, 2010 in On Target
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The NHL amateur draft has just ended and it offers interesting lessons about assessing risk and opportunity. First, you can’t win if you don’t play the game, but only a small proportion of these young hockey players will ever make it into the NHL. An even smaller number will have decent careers, and an even smaller number will be remembered as great players. The problem is that the early choices are probably no more likely to have long-term careers than the later choices.

I once asked a professional baseball scout what elements were used in choosing future players. I thought he would give me a rundown of all the most relevant numbers, especially since baseball is famous for tracking arcane statistics. Instead, he surprised me with a litany of character and social traits that have little to do with raw talent: age and maturity (we’re talking teenage boys mostly), will to win, leadership, family background, work ethic, school and study habits, social entourage, etc. Factors such as physical build are also important, as well as general athletic ability. As he put, they can learn technical skills, but character is more ethereal. In the end, it is really more of a gamble than most people recognize.

Business opportunities are often similar. You can have a brilliant technical idea for a product, but many other factors come into play. What is the enterprise’s culture? Is there sufficient resolve and leadership to see the project through to fruition despite the inevitable setbacks and friction? Will the market change between seed and harvest? Will competitors have a say? Will the technology or technique work in the long term? The only thing is to play the game and maximize the opportunity along the way by the equivalent to strong character: will to win, resolve, leadership, and clever attention to detail.

© 2010 Richard Martin. Reproduction and quotes are permitted with proper attribution.

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