"Loonshots" is an insightful look into how to nurture crazy ideas that win in your company
A book came out earlier this year that I have now read and given to several friends. Loonshots is an insightful book about how what it takes for companies to mine their innovative ideas and nourish them properly so they can be operationalized. It was written by Safi Bahcall, a physicist turned startup founder turned CEO.
Bahcall is a legitimate lifelong learner. After getting his Ph.D. in physics he became a management consultant at McKinsey, then founded a biotech company. After all that business experience he realized that he had something to add to the management literature. Bahcall, however, didn’t think he could write that well. So he decided to learn the craft the old-fashioned way: he went to bars and cafes and read the greats over and over again until he got the hang of writing.
The result is that Loonshots is both insightful and also a great read.
Here are some of the key ideas I took away from Loonshots.
Structure over culture
As a coach, I tend to be “pro” culture. However culture is nothing without the structure to provide.
“There’s a common saying in business that culture eats strategy for breakfast,” Bahcall said. “My point is that structure eats culture for lunch.”
Bahcall is not dismissing the need to promote a strong culture of transparency, for example, or celebrating victories. He is, however, noting that culture by itself only leads to “best place to work lists” and doesn’t lead to the enduring value that a company needs to build to be a thriving enterprise that can both generate innovation and manufacture commercial projects out of those innovations. For that a leader needs to ensure she builds the right structure: processes, systems and incentives.
Loonshots vs. franchise
This structure needs to be different in the various parts of the organization, depending on which phase it is enacting. A part of the company working on radical innovation is by nature going to need a structure very different from that of the area which is trying to build operational excellence.
Bahcall ingeniously hit upon this by calling up his expertise in Physics. He considers these two organization phase – radical innovations vs. operational excellence – to be two separate phases of the organization, just like being liquid vs. solid are two phases of water molecules. Systems can’t be in two phases at the same time; water can’t be both liquid and solid.
There is one exception to that principle, Bahcall points out, and that is right on the edge of a phase transition – just as water is on the brink of freezing.
“When you bring a tub of water right to the brink of freezing,” he says, “pieces of ice coexist with liquid. It’s right on the cusp. The coexistence of two phases, on the edge of a phase transition, is called phase separation.”
Leaders need to recognize these two phases – Bahcall refers to them as “franchises” which have to run predictably like a machine and “loonshots” which allows people to wander around in search of innovation. Both are necessary for a company to stay ahead. “In other words,” Bahcall said, “we need to balance radical innovation with operational excellence.”
The balance point comes in managing these two phases differently while having the interconnection points between them. A great example of this is Theodore Vail, who created what eventually became Bell Labs. He saw his job as “managing the touch and the balance between loonshots and franchises.” He helped bridge the gaps scientists exploring the bizarre and making sure the phones worked.
Managers need to love their loonshot and franchise groups equally.
As Bahcall points out, this requires the discipline to overcome your natural preferences. Methodical people tend to favor other methodical people. Creatives tend to resonate more with creative. Steve Jobs, in his first iteration at Apple, publicly referred to his team working on the Macintosh as artists. He referred to the rest of the company as bozos. This is a good lesson on what not to do.
Luckily Jobs learned and when he returned to Apple he was able to celebrate the success of both the designers and the operators.
Loonshots need to be protected
Bahcall describes an encounter had had with Sir James Black, a Nobel prize winning physician. When Bahcall was having trouble with a project that kept failing, he complained to Sir James. Bahcall remembers, “Sir James leaned over, patted my knee, and said “Ah my boy – it’s not a good drug unless it’s been killed at least three times.”
Loonshots are, to say the least, fragile. “Loonshots are easily dismissed because they arrive covered in warts—the flaws and seemingly obvious reasons they could never work,” Bahcall said. That means these ideas are easy to shoot down directly or, even more insidiously, simply starve for resources. It’s hard to stick up for an innovative idea that looks crazy and improbably, especially when it proves how impractical it is by failing. Repeatedly. When this idea finds its way into the part of the company that is trying to run a predictable franchise it is simply doomed.
This book is a must read for people and organizations who are trying to increase their ability to catalyze more innovation.
