This year’s Major League Baseball trade-deadline fire sale mostly went to script, headlined by the Jon Lester/Yoenis Cespedes mega deal where the Oakland A’s and Boston Red Sox helped each other out in the usual fashion: One got to clear millions in salaries off the books while gaining a few parts, and the other obtained a high-impact starter for its championship run. The wrinkle in this case is that the team doing the dumping is big-market, big-payroll Boston, and the one gearing up for the post-season is small market, small-payroll Oakland.For a good breakdown of this trade, see Jonah Keri’s piece in Grantland. Here’s a quote that had me laughing at my desk:It’s hard to blame GM Ben Cherington for embracing the fire-sale approach. … Even if Lester leads the A’s to World Series glory, it still looks like the Sox made out like bandits in this deal.So one team may substantially increase its chances of winning the World Series, while the other makes out like bandits! Keri is absolutely right though: The reason these fire-sale deals are so common is because they benefit both sides. When a team’s competing for the playoffs, winning now is much more valuable, and when a team’s out of contention, money is more valuable.You know who understands this? Oakland General Manager Billy Beane. In competitive years under Beane’s tenure (when the A’s finished first or second in their division), the A’s have made July deals gaining them a net total of 9.61 wins above replacement (relative to the players they had to give away), while taking on an extra $16 million worth of salary for those years (of which, the A’s would pay a remainder, depending on the terms of the trade). Note: Yes, that is an pretty good money-to-WAR ratio, but it’s what would you expect. Conversely, in years when the A’s have not been in contention, Oakland has sold a net of 12.25 WAR, while shedding the remainder of $46 million worth of salary.For the small-payroll team to be the fire-sale buyer is rare, especially with as large a pay gap as exists between the Red Sox and Athletics (more than $79 million). Since 1996, just $21 million worth of salary obligations (or remainder thereof) have gone to the small side of a payroll gap that big (about 1.2 percent of contract value for all trades conducted in the period), and those were offset by those teams shedding $109 million. In other words, poor teams typically trade big contracts for little ones.Overall, since 1996, bigger payroll teams have sent $736 million in present-year salary to smaller payroll teams. The bigger payroll teams have taken on $1.02 billion, meaning the poorer teams netted close to $300 million.That said, the Oakland/Red Sox deal isn’t unusual if we ignore payroll and just look at the standings. Oakland currently holds the top spot in the AL, the Red Sox are in 13th. For trades between teams with at least a 12-spot gap between them in the standings, $161 million in salary shifted to the better teams in exchange for just $7 million going the other way. Overall, the team with the better position in the standings has taken on about $1.35 billion dollars in salary while shedding just $413 million. Meaning, the lower ranked teams have netted nearly $900 million in fire-sale trades (almost triple what poorer teams have done).Let’s look at this in chart form. I’ve plotted all the contracts traded in July from 1996 through 2013 (plus Lester’s) below, with the size of the players salary for the given season represented by area of the bubble:There are four quadrants representing the four basic types of trades. Quadrants kitty-corner from each other are essentially trade partners — e.g. when poor teams find themselves in the better competitive spot, they seem to be pretty willing to spend money to go after wins (435 million) and are even less willing to give away assets (112 million).For fun, I ran a regression from pay gap and standings gap to the size of contract changing hands and found that pay gap is actually borderline insignificant after you account for standings (for fellow nerds: t-Stat of 6.5 for standings gap, just 1.6 for payroll gap).In other words, while the A’s-Red Sox trade appears to be extremely unusual (a fairly large outlier on the chart above), it’s not because small payroll teams just don’t usually make trades like this. It’s because small payroll teams aren’t usually in position to make trades like this.
Preview • 2019 Lamborghini Aventador SVJ: Verdant velocity Lamborghini Aventador SVJ 63 Roadster, Huracan EVO GT Celebration dazzle 2020 Audi R8 first drive: Improving an already fantastic supercar Comment Monterey Car Week 2019 Lamborghini 5:37 More about 2019 Lamborghini Aventador SVJ 1 More From Roadshow Tags 2019 Lamborghini Urus review: Part SUV, part supercar Exotic Cars Performance Cars 2020 Lamborghini Huracán Evo Spyder first drive: Worth every sunburn Lamborghini’s Aventador SVJ is more than a ‘Ring monster Now playing: Watch this: 62 Photos Enlarge ImageJust 63 of these supercars will be made. Antuan Goodwin/Roadshow It certainly wouldn’t be Monterey Car Week without a flood of new concept cars and supercars. Lamborghini didn’t disappoint and revealed not one but two models on Friday. First up is the Lamborghini Aventador SVJ 63 Roadster. Naturally, it follows the SVJ 63 Coupe revealed previously and it’s also limited to, as the name implies, 63 units globally. The production figure corresponds with the Italian firm’s founding year of 1963. Any 1 percenters looking to add a new supercar to the garage will have the chance to select one of eight design motifs for the SVJ 63 Roadster, though the photos depict the matte gray Grigio Acheso with orange details. The car also sports a set of matte titanium wheels and a special carbon-fiber part that covers roof, engine cover, engine air vents, windshield surround and mirrors. There will be no mistaking this special edition for any other Aventador as it wears a “63” livery inside and out, too. The cockpit of this Aventador SVJ 63 Roadster features gray and orange to match the exterior, though it shares other elements with the seven additional design motifs. Each of the 63 cars will come with tri-tone Alcantara upholstery, carbon-fiber trim and a steering-wheel badge to mark the SVJ 63 Roadster’s significance. Like all other SVJs, a 6.5-liter V12 makes 760 horsepower. Enlarge ImageLamborghini is proud of its racing success so far, so it made a tribute model. Antuan Goodwin/Roadshow If the Aventador SVJ 63 isn’t flashy enough for you, the Huracan EVO GT Celebration should do the trick. It honors the Huracan EVO GT3 race car that’s come off of two banner racing seasons, including two consecutive wins at the 24 Hours of Daytona and 12 Hours of Sebring. The company said it will build 36 of these cars — the sum of 24 and 12 to represent the EVO GT3’s dominance on the track. The wild green and orange livery is meant to evoke the GRT Grasser Racing Team livery, which is one of the teams that’s contributed to Lamborghini’s winning streak. I admit, it’s rather polarizing, but the company said there are eight other combinations to choose from with three other colors. No matter which color, the livery style stays the same, as does the racing number 11. Badging and vinyl also mark the race car’s championship wins on the sides and near the engine bay. Finally, the Lamborghini Squadra Shield is an option for the roof with the Italian and US flags framing it. Meanwhile, the interior features the shield, flags and laurel as standard equipment and color-contrast stitching depending on which color scheme an owner chooses. Like other Huracáns, a V10 provides the power. A shame if you’re not local to North America because other global buyers won’t have the chance to own an Huracan EVO GT Celebration. Both special-edition cars will arrive in early 2020. Share your voice Lamborghini
The appetising fragrance of India’s basmati rice will soon have a major role to play in keeping fuel prices down.This is because India is seeking alternative options to dollar payment for keeping the Iranian oil flowing despite US President Donald Trump’s clampdown on global trade with Iran.Iran is the biggest importer of Indian basmati and the commodity is a serious contender to become India’s rupee payment conduit for keeping the Iranian oil taps open.India is taking steps to relax basmati export norms to facilitate continued oil imports through the rupee route without inviting US sanctions.New Delhi wants to make the most of the exemption that Washington has granted it along with seven other oil importing nations in transactions with Iran. India has also received US waiver for its role in the development of Iran’s Chabahar port.India’s basmati exports last year topped $4.7 billion with Iran continuing to maintain its top position with imports worth $905 million. Indian basmati exports during the 2018-19 fiscal year has already crossed $2 billion with Iran keeping the top spot and Saudi Arabia a close second.Last year’s strong export performance of the commodity had increased sowing in India but the sudden re-introduction of the US sanctions was a dampener. Now that the US has granted India an exemption in the trade with Iran, the prospects of a thumping performance in basmati export have brightened. The rupee payment route will ease the trade even further, export sector sources say.The rupee payment facility and the enabling of even barter deals with agricultural commodities have come as a boon to the market that had suffered some amount of uncertainty over the situation in the Middle East and tension between Washington to Teheran. Iran usually decides the import quotas after the harvest season by mid-November. So, the traders think the decision of the Indian authorities to ease the norms has come at an opportune time and will help boost the market sentiment. Indian farmers of rice varieties other than basmati have already found cheer in the Chinese market outlook. A recent buyer-seller meeting in China, which is the world’s biggest producer and importer of rice, has had an excellent outcome for Indian exporters. About 80 percent of India’s $4.7 billion worth of basmati exports last year went to the Middle Eastern countries led by Iran. Indian producers want to do better this year after having sown more areas after last year’s bullish brighter global outlook. Punjab and Haryana produce nearly 50 percent of the basmati varieties that go at a premium in the export market. Uttar Pradesh produces about 12 percent.
October 7, 2008 Growing a business sometimes requires thinking outside the box. Nilofer MerchantThese eight secrets will help any midlevel manager in this tough job move ahead and formulate the best possible strategy:1. Use A ProcessEvery strategy must follow a repeatable pattern — a process. These steps are the building blocks of strategy creation. They’re linked, but not rigidly sequential. When you use a process, it means you don’t have to reinvent the wheel. Take advantage of past learning and the experience your team has gained in the market — start your strategy off on the right foot by creating a process that you can use over and over again.2. Be Prepared To Get MessyStrategy isn’t neat and tidy — there is no bow wrapping it all up at the end and much that is unknown. Conversations will lead you into places you never thought you’d go. There are lots of ideas, and many of those will have to be killed off. And sometimes strategy creation is mind-boggling and disorienting. Take a compass with you — a North Star so you know where you are. But know it’s a journey that often involves the new. It’s a little like making sausage — the middle steps are often glossed over so no one knows the actual recipe.3. Follow The Leader(s)In any group, there’s a leader. In strategy formation, the operational leader makes sure the right conversation takes place. He or she determines which key conversations must occur, in what sequence, and with whom. This all moves the team toward development of the best ideas, the best single solution. The leader shepherds the process and insists that ideas are well vetted and considered. The leader also makes sure everyone in the group is participating. The operational leader makes the call. That’s the decision-maker. Without that sage wisdom, strategy development can stall. Keep in mind that members of a group may share leadership at various points in the strategy development.4. QuestionsStrategy without questions is like a car without gas. Questions that work for strategy development focus on the overall marketplace topography, capabilities, and weak points of the company, and the impact on current and new customers. If a team were strategizing ways to defend against a competitor, typical questions would include:What have we tried already?What happened when we did it?How did the market get to where it is today?What is our competitor good at?What are we good at?Where are our weaknesses?5. InterviewingIf you approach them right, interviews will glean important quantitative and qualitative information used in strategy formation. Great fact-gathering tools for data, interviews can also provide knowledge and insight. Perform interviews in person wherever possible. Read the look on the interviewee’s face. Notice which topics cause a flinch or a frown — dig deeper. You’ll find questions popping up in the middle of the session that you had no idea you’d be asking. Go with the impulse to ask “off the wall” questions — they can be the pathway that takes the interview to a new place or reveals something new and useful.6. Selecting IntervieweesOrganizations that hire my company typically will hand me a list of people they want us to speak with. Typically, the lists are limited in scope. We ask who else could be included because we want an extended range of data and issues. Hearing dissenting voices is important. We find people who may object, people who may be contrarian. Who you ask shapes what you learn. As information moves farther from its source, it is distilled, distorted, and the nuances are removed. Talk to people who are familiar with the basics of day-to-day operations. Go into the mailroom or the security back office for a viewpoint entirely different from that of the executive VP.7. Organize Facts In A FrameworkInterviews give you facts, but to get the meaning you’ve got to organize the facts in a framework. Use four categories: What you regard as confirmed, what you believe but don’t have enough facts to confirm, what you doubt, and what the relevant outliers are. Items that are confirmed may include hard numbers from validated sources. If you don’t have enough facts for a confirmation, you may be looking at something you know or sense from your experience — it could also be something you’ve heard several others say they believe. Things you doubt might include research that originates from an unreliable source. Outliers would be defined as information only a few people hold or a topic with a surface that’s barely been researched.8. Developing CriteriaNow generate and sort ideas. In this phase, it’s important to know what matters most to the organization — and this is a huge strength for most middle managers. Choose the best idea from among the many. Ask yourself the following questions:Where do we want to be?How will we know when we’re winning?What does success look like?Imagine what the change will look like when it’s successfully implemented. Use concrete language to describe it. “We will be aligned and operating to hit our stretch goal of $132M for fiscal 2010.” Create a detailed picture of exactly what type of success is most desired and what, specifically, it will look like.Middle managers are the hub of any business. They hold the power to make or break the success of the organization. Add these strategy development skills to their already-tremendous knowledge and you’ll reap the benefits.Nilofer Merchant, CEO of Rubicon Consulting, is a global high-tech industry thought leader and trusted strategic adviser for companies such as Adobe, Symantec, and VMware. She publishes and speaks frequently on strategy, innovation, and leadership. 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