Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries
By Safi Bahcall
St. Martin’s Press, 2019

In a famous TV spot, Apple toasted cultural, social, and technical innovators:

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

True, true. But the crazy ones wouldn’t go far if not for others (the sane ones?) who integrate and scale innovations into broader systems. And conversely, the sane ones wouldn’t have much to go on if not for people in their midst who introduce disruptive ideas.

These disruptive ideas — the loonshots in this book’s title — are precious and fragile. To progress, organizations need to find a balance between innovating and “franchising.” (I.e., exploiting the possibilities.)

Bahcall suggests organizations must undergo a phase transition between the two, analogous to the transition between water and ice, which happens when conditions are right.

All phase transitions are the result of two competing forces, like the tug-of-war between binding and entropy in water. 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.

These refer to 1) stakes in the outcome (i.e., being driven to innovate for its own sake) and 2) rank as in struggling for power and prestige within an organizational/social system. The book is replete with examples of organizations that failed because they tipped too far in either direction.

The ideal is a balance between them, and the book offers a framework for achieving that balance in the form of the Bush-Vail rules, named after Vannevar Bush (computing pioneer and head of the Office of Scientific Research and Development) and Theodore Vail (head of Bell Labs.) The rules are:

  1. Separate the phases
  2. Create dynamic equilibrium
  3. Spread a system mindset
  4. Raise the magic number

Organizations face several traps when balancing innovating and franchising. The most memorable is the Moses Trap, “when ideas advance only at the pleasure of a holy leader, who acts for love of loonshots rather than strength of strategy.” The book offers Polaroid as an example of an organization undone by its founder’s obsession with innovation.

While the focus is on balancing the two, the book focuses on the innovation phase. As such, it delves into two types of loonshots:

  • P-types: product breakthroughs
  • S-types: strategy breakthroughs

Again, there are memorable, compelling, and relatable examples of each. Bahcall is an engaging storyteller.

The upshot: an organization’s ability to thrive depends on the degree to which it can foster innovations and franchising them. Just as the transition between water and ice (or flowing vs. jammed traffic, another memorable image) depends on several structural and environmental factors, so does the organizations ability to enable innovating and franchising. This book offers a good framework to tackle this balancing act.

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