I've had this book on my reading list for a couple months now, checking it out of the library and returning it unread. Finally read it, and am glad I did. If I were in a position of power and influence at a company that has research and product development departments / organizations, I would insist that everyone in those groups also read it.
Okay, so, according to Bahcall (who, let's admit, has more experience than I, and likely you, do), product (anything you do, whether sell a physical object or provide a service, but mostly sell an object) development falls into two categories: incremental improvements on an existing product or an implementation of a revolutionary new idea. How a product makes it to the end user varies. While a revolutionary product can kickstart an organization, you need the improvements people to sustain it. Artists to create and soldiers to sustain.
I loved how various physics models came into play in the telling of different companies' histories. Hello, phase transitions. Hello, emergence.
The book provides a number of growing company pitfalls, and, delightfully, ways to avoid them. How awesome is that?
The appendices of the book are excellent summaries of the book, which, quite honestly, I'm going to be reviewing frequently. If nothing else, reminding myself of the five laws of loonshots from Bahcall's own site. I strongly recommend this book for anyone working to create something new, and state the book is worth reading for everyone.
So many things have broken down inside a cancer cell by the time it starts proliferating that there’s no easy fix.
My resistance to after-the-fact analyses of culture comes from being trained as a physicist.
To liberate those buried drugs and other valuable products and technologies, we need to begin by understanding why good teams, with the best intentions and excellent people, kill great ideas.
There’s no way to analyze just one molecule of water, or one electron in a metal, and explain any of these collective behaviors. The behaviors are something new: phases of matter.
When people organize into a team, a company, or any kind of group with a mission they also create two competing forces—two forms of incentives. We can think of the two competing incentives, loosely, as stake and rank.
When groups are small, for example, everyone’s stake in the outcome of the group project is high.
The perks of rank—job titles or the increase in salary from being promoted—are small compared to those high stakes.
As teams and companies grow larger, the stakes in outcome decrease while the perks of rank increase. When the two cross, the system snaps.
In the high-stakes competition between weapons and counterweapons, the weak link was not the supply of new ideas. It was the transfer of those ideas to the field. Transfer requires trust and respect on both sides. But officers “made it utterly clear that scientists or engineers employed in these laboratories were of a lower caste of society,”
Bush and a handful of other scientific leaders—including James Conant, a chemist and the president of Harvard University—believed war was coming and the US was dangerously unprepared. Both had witnessed the tendency of generals to fight a war with the weapons and tactics of the preceding war.
One molecule can’t transform solid ice into liquid water by yelling at its neighbors to loosen up a little.
The ship’s carpenter, 58 years old, decided he had no chance. “He called out to one of the ship’s officers, ‘Goodbye, Sir. It was a good life while it lasted,’ waved and then calmly ‘walked right into the path of a wave pounding across the afterdeck. It was like a minnow being swallowed by a whale.’”
Rather than champion any individual loonshot, they create an outstanding structure for nurturing many loonshots.
1. SEPARATE THE PHASES:
Separate your artists and soldiers .
People responsible for developing high-risk, early-stage ideas (call them “artists”) need to be sheltered from the “soldiers” responsible for the already-successful, steady-growth part of an organization.
Tailor the tools to the phase.
Efficiency systems such as Six Sigma or Total Quality Management might help franchise projects, but they will suffocate artists.
2. DYNAMIC EQUILIBRIUM
Love your artists and soldiers equally Maintaining balance so that neither phase overwhelms the other requires something that sounds soft and fuzzy but is very real and often overlooked.
A flawed transfer from inventors to the field is not the only danger. Transfer in the other direction is equally important. No product works perfectly the first time. If feedback from the field is ignored by inventors, initial enthusiasm can rapidly fade, and a promising program will be dropped.
Key to that dynamic equilibrium—and Bush’s ability to speak freely to generals—was support from the top.
In the real world, ideas are ridiculed, experiments fail, budgets are cut, and good people are fired for stupid reasons.
Companies fall apart and their best projects remain buried, sometimes forever.
Victors don’t just write history; they rewrite history.
Later, Folkman would say, “You can tell a leader by counting the number of arrows in his ass.”
The negative result in the rat experiment was a False Fail—a result mistakenly attributed to the loonshot but actually a flaw in the test.
People may think of Endo and Folkman as great inventors, but arguably their greatest skill was investigating failure. They learned to separate False Fails from true fails.
Skill in investigating failure not only separates good scientists from great scientists but also good businessmen from great businessmen.
He prodded and poked until the sleeping bear woke.
Listening to the Suck with Curiosity (LSC)—overcoming the urge to defend and dismiss when attacked and instead investigating failure with an open mind.*
It’s hard to hear that no one likes your baby. It’s even harder to keep asking why.
I find it’s when I question the least that I need to worry the most.
Let’s call a surprising breakthrough in product—a technology that was widely dismissed before ultimately triumphing—a P-type loonshot.
Let’s call a surprising breakthrough in strategy—a new way of doing business, or a new application of an existing product, which involves no new technologies—an S-type loonshot.
Years later, Land became known for a saying: “Do not undertake a program unless the goal is manifestly important and its achievement nearly impossible.”
The graveyard of unexplained experiments, as Land would soon show, is a great place to find a False Fail.
The Austro-Germanic school of fatalism (Spengler, Schumpeter) says that decline is inevitable. Empires will always ossify, a David will always rise to slay Goliath, and so it goes.
As eccentric millionaires with one success are inclined to do, Schure concluded he was an expert, a proven filmmaker.
After a bad move costs him a game, however, Kasparov analyzes not just why the move was bad, but how he should change the decision process behind the move.
Analyzing the decision process behind a move I’ll call level 2 strategy, or system mindset.
The weakest teams don’t analyze failures at all. They just keep going. That’s zero strategy.
Teams with an outcome mindset, level 1, analyze why a project or strategy failed.
Teams with a system mindset, level 2, probe the decision-making process behind a failure. How did we arrive at that decision? Should a different mix of people be involved, or involved in a different way? Should we change how we analyze opportunities before making similar decisions in the future? How do the incentives we have in place affect our decision-making? Should those be changed?
System mindset means carefully examining the quality of decisions, not just the quality of outcomes. A failed outcome, for example, does not necessarily mean the decision or decision process behind it was bad. There are good decisions with bad outcomes. Those are intelligent risks, well taken, that didn’t play out.
The stories in part one illustrate the first three Bush-Vail rules:
1. Separate the phases • Separate your artists and soldiers • Tailor the tools to the phase • Watch your blind side: nurture both types of loonshots (product and strategy)
2. Create dynamic equilibrium • Love your artists and soldiers equally • Manage the transfer, not the technology: be a gardener, not a Moses • Appoint, and train, project champions to bridge the divide
3. Spread a system mindset • Keep asking why the organization made the choices that it did • Keep asking how the decision-making process can be improved • Identify teams with outcome mindsets, and help them adopt system mindsets
The practice helped Kraft Foods develop melt-resistant chocolate. Parents can thank open innovation for summers free of sticky chocolate goo.
Leaders well coached on group dynamics are likely to spend more time with their teams. It’s fun working with high-performing teams who appreciate you. It’s less fun to spend time with dysfunctional teams who hate your guts.
Luck and timing always play a role in creativity and invention—the essence of a first-appearance story.