Dear Mr Katz - let's fix those Oilers, shall we?

Editor's Note:  While we don't agree with all of the points in this FanPost, it's well-written FanPosts and Comments like this that create discussions. 

Dear Mr. Katz,

I am a lifelong Oilers fan.  However, the last few years I have been viewing the Oilers as much like a client as a fan.  I believe the Oiler organization is flawed.  It lacks planning capabilities, and desperately needs to address this weakness.

It has become increasingly obvious that planning is an area of weakness for the Oilers over the past 5-6 years.  The organization’s planning track record under Kevin Lowe’s GM reign was poor, and it is only marginally better under Steve Tambellini.  This should be a major concern for Oilers’ ownership. 

In a salary cap world, the ability to maximize every dollar spent is critical to short and long term success.  When you are a smaller market team, based in a relatively small city that happens to also be the League's northern-most franchise, you will have to work harder to success.  Don’t deny it.  Don’t ignore it.  Embrace it and use it as a motivator.  Make sure your management team is thinking one step ahead of everybody else, and that thinking outside the box is valued.

I have been especially motivate to post this series given the levels of excitement around the team's modest success recently.  I especially fear the team moving into "buyer" mode around the deadline.  You're not a buyer yet.  You should know this.  You should know this because your plan and metrics tell you this more clearly than a smack to the head with a baseball bat.  And you should know that the majority of your fans want to win the Cup.  Not a playoff game, or even a playoff round.  We want Lord Stanley's mug.  We will be patient if the plan makes sense.  Trust us and our overall hockey IQ. 

Over the next few days I would like to share with you a series of observations on the way the Oilers are being managed, evidence of a lack of planning, and explore elements of build a plan for a re-building team.

• The most basic best practice – making sure your players "fit" together in a complementary way
• Using outcome metrics and drivers to guide decision making
• Budgeting by line to maximize cap dollars
• The role of later round draft picks – should be used to "swing for the fences" (like Detroit does) not to populate your farm team (like the Oilers often do)
• Developing draft picks once you have them
• Leveraging existing assets to fill holes
• Effective use of the free agent market.

That’s not to say this is the be all and end all of being a GM, but the components of the role I will cover should be foundational.  They should be core to the role.  And any GM worth his salt should be able to articulate to you clearly and concisely how they are managing each element covered not just for this year and next, but for up to the next five years.

Yes, stuff happens and plans need to evolve, but the most successful organizations, regardless of industry, have a plan and set of guiding principles.  Combined, this forward view allows them to out-perform their competition.  In sport, there probably is no better example of this than the New England Patriots.  They live in a cap world, in a sport where the average player’s career is very short, meaning they need to move players into and out of the team frequently, and they keep on winning.  I have no doubt that they employ each and every one of the GM best practices I will explore.

The goal, by the end, is to provide you a framework to assess your existing management team.  Are they doing the right things?  Where are the holes?  The hope, as a fan, is that you will use this information to make changes as necessary, whether they be wholesale changes or adding to the existing mix.

Post 1:  Making the case – do the Oilers really suck at Planning?

Of course it is easy to say the Oilers don’t know how to plan, but what evidence is there?  Here are some telling examples:

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  • Let’s go back to April 6th, 2007.  The Oilers are in 25th place overall.  In the lottery.  Heading into a draft that was about the top 5.  The Oilers have one game left against the Flames and a win knocks the Oilers out of the lottery.  A sane GM would have had his AHL back up goalie fly in on the red-eye, have an AHL assistant coach fly back with him and keep him up talking all night and then fed him bad sushi before the game.  He also would have stapled his first line to the bench, dulled the team’s skates, and watched what happened when you played the 4th line for 20 minutes.  Instead, your GM let your coach go for it and you missed the lottery and the Blackhawks got Patrick Kane instead of your team.  Hmmm. 
    • Either the Oilers had no plan, or it was so secret that people who need to know at a critical time didn’t know it.  Looking at subsequent actions, my better is on the former.
  • But wait, there is still some hope. The team has three first round draft picks in the upcoming draft.  Number 6, number 15 and number 30. Except in that draft you give up the 30th pick and your second round pick for Riley Nash, a player who was never going to be drafted in the 1st round, and who projected to be a THIRD LINE centre. 
    • Third line centres are a dime a dozen in the NHL.  You should NEVER use the draft to draft 3rd line players, especially in the first round.  Eric Belanger went for $750,000 this summer and he is a perfect 3rd line centre. 

    • At the time the Oilers take Nash, Jonathan Blum, Mikael Backlund and David Perron are still on the board.  Looking at the Oilers weakness at centre and on defence, how much better would you feel about your team with Blum or Backlund in the picture?  Or maybe if the team had Perron, Lowe wouldn’t have felt so desperate to sign Penner.  Anyway, its hard to see how burning a pick that high or the two picks given up to get the pick for Nash really advances the plan, unless you don’t really have one.  And if your management team wants to take a flyer on a kid, then save it for the later rounds, not the first round.

  • Ahh, Penner.  He gave you one good season but at the cost of Tyler Myers and 2 other prospects.  He had a reputation as a disinterested floater and you gave up a 1st, 2nd, and 3rd round pick for him.
    • There is no rationale explanation for this signing.  Other RFAs could have been targeted that were safer bets, including Henrik Lundquist..  And with the cost that high, a team with a plan would have understood how weak the team was, and had pretty strict criteria to assess Penner against.  I doubt "out of shape", "low compete levels" and "size but not willing to use it" would have been on the list of criteria.
  • Then on 12 Jul 2007, the Oilers sign Sheldon Souray to a 5 year deal.  The move smacks of desperation at the time, but it does provide the Oilers with a top pairing offensive LD who can run the left side of the powerplay, but can’t really play defence.  Fast forward to 30 June 2008, and the Oilers send Jarret Stoll and Matt Greene to the Kings for Ludomir Visnovsky.  Visnovsky is a top pairing defenseman.   Plays the left side and can quarterback the powerplay, but can’t play defence.  Wait, don’t the Oilers have one of those already?  Yes, they do. 
    • Whoops!  We are lacking a premium centre and big, talented shut down defensemen, and we get a softer Souray.  Hard to see how that fits into any well thought out plan
  • And that brings us to today.  You need to find out what you have with Dubnyk soon.  It is absolutely crazy that Dubnyk isn’t starting 2 out of every 5 or 6 games this season.  You aren’t going to make the playoffs this season and you NEED TO KNOW if this kid can play at the NHL level.  Sure, you want Khabby to play enough to become trade bait at the deadline, but both aims can be accomplished.  Of course, not if Khabby plays 11 out of 12 games like he has so far. 
    • The fact that your management team are not doing this is more evidence that your current management team either doesn’t have a plan, or they haven’t told the coach what it is.  Neither is acceptable

So, how do we build a plan for a hockey team?  I mean, we’re not manufacturing and selling hockey sticks here.  We’re trying to manufacture a winning team and a winning environment. 

First, we need to understand and agree on some key outcome metrics.  Outcome metrics tell us if we are being successful at achieving our strategic objectives.  Some potential outcome metrics for the Oilers might be:

• Operating income – measure of our financial success
• Winning percentage - – measure of our on ice success
• Playoff rounds/Championships won – measure of our on ice success
• Percentage of drafted players playing in Edmonton/in the NHL – measure of our ability to identify and develop talent
• Overall fan support – measure of how well we are connecting with our fan base

There may be other outcome metrics that you could add, but this list is a pretty good start.  Once you have identified your outcome metrics, you can then define the drivers that lead to them. 

For example, some of the key drivers of "Winning Percentage" might be:

• Powerplay ranking/percent
• Penalty kill ranking/percent
• Team face-off percentage
• Ratio of give aways to take aways
• Points per dollar spent on forwards
• Team chemistry
•  Complementary skill sets

This site is littered with analysis by folks with mathematical bents that could actually help figure out the statistical relationship between drivers and outcome metrics if given the frameworks.  Leading organizations strive to understand correlations and causations between drivers and outcomes.   

By understanding what the outcome metrics we will use to measure success are, and formalizing the importance of key drivers, we can focus management’s attention.

This driver model principle is a leading practice in planning.  The majority of organizations plan their financials (budgets) far to distinctly from their operational planning, with little or no formal understanding of the impact of one operational lever or another on their key financial outcomes, or even their non-financial ones. 

Before we jump into advanced planning concepts, lets look at the basics first. 

• Managing budgets in a cap world. 
• Managing and aligning talent. 
• Leveraging free agency
• Developing talent   

Keeping outcome metrics such as these in mind, we can start to build the parameters of what the team needs to look like in 2012/13 or 2013/14.  We need to have a vision for how our current players are going to evolve and a plan as to how we fill in the holes around them with complementary players.

In my next post, I will look at Planning and Budgeting for a Salary Cap world.