From my understanding it is based a lot on what Brentford, Brighton, etc have done.
The concept is that you make a higher number of low risk high reward signings with a view that only one or two need to come off to pay for the whole outlay/next step of investment.
For example, the last few years we bought McGree, Hoppe, Rogers, VDB, Silvera, Forss, Bangura, Engel, Lath, Dieng, Gilbert. All as youngish players for relatively low fees. You would hope the value gained by McGree and VDB alone already would pay for the Hoppe/Gilbert flops (and then some) and most of the others have at least maintained value i suspect.
It doesn't stop us adding more experienced players, but we are generally only doing it for good value. Scott also brought in Lenihan, Smith, Clark and Barlaser - all for good value. You don't gamble on paying a lot for the "form" player - like Rhodes back in the day.
And then complimented with a few loans (Greenwood/O'Brien) - I suspect this years loans were both with an eye to possible longer term deals.
It probably overall reduces chance of short term success, but should keep you consistently competitive. Like Brentford - they were in and around the playoffs for several years before it eventually worked out.