Loonshot: a high-risk, a high reward business endeavor The author's argument: > 1. The most important breakthroughs come from loonshots > 2. Large teams are needed to bring these breakthroughs to market > 3. The science of phase transitions provides a framework for nurturing loonshots ## The Bush-Vail Rules Inspired by Vannevar Bush and Theodore Vail ### 1. Separate the phases - Separate artists and soldiers - Creativity breeds creativity. Once the breakthrough is discovered, pass it along to those who can best bring it to market - Impossible to be both solid ice and liquid water at the same time - An ice cube melts faster in a big pool of water - Tailor the tools to the phase - Loonshot gorups - thrive under wide spans, loose controls, qualitative metrics - Franchise groups - thrive under narrow spans, tight controls, quantitative metrics - Watch your blind side - Don't focus on one type of loonshot - [[P-type Loonshot]] - [[S-type Loonshot]] ### 2. Create dynamic equilibrium - Love your artists and soldiers equally - Birds of a feather flock together, but appreciate your distant cousins; everyone wants to succeed - Manage the transfer, not the technology - Leaders should not assume authority over the loonshot; create a robust feedback loop between artists and soldiers to refine the loonshot - Appoint and train project champions to bridge the divide - Engineers can be really bad at communicating and/or promoting their technology. Train others to identify great ideas and promote them ### 3. Spread a system mindset - Keep asking why - Level 0: Don't analyze failures - Level 1: Analyze only failures - Outcome mindset - can miss out on future innovations - Level 2: Analyze successes and failures - System mindset - good outcomes don't always imply good decisions, vice versa - Keep asking how decision-making processes can be improved - Who was involved? - How was data collected? - What analysis was performed? - How did company/market conditions affect the result? - Identify teams with outcome mindset and help them adopt system mindset ### 4. Raise the magic number - Reduce return-on-politics - Company structure can incentivize politicking for compensation, promotion as opposed to innovating - Use soft equity - Identify and apply non-financial rewards that actually work - Peer-recognition, commute time, intrinsic motivators - Increase project-skill fit - Apply talent where it fits best - Invest in screening and evaluation to determine roles where employees are neither over- or under-stressed - Fix the middle - Identify and fix perverse incentives, negative consequences of well-intentioned rewards - Often found at the middle-manager level - Celebrate results, not rank - Bring a gun to a knife fight - Value of good talent is at an all-time high; invest in a chief incentives officer