Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries

by Safi Bahcall

SUMMARY: RAISE THE MAGIC NUMBER • Reduce the return on politics: Make lobbying for compensation and promotion decisions difficult. Find ways to make those decisions less dependent on an employee’s manager and more independently assessed. • Use soft equity: Identify and apply the nonfinancial rewards that make a big difference. For example: peer recognition, intrinsic motivators. • Increase project–skill fit: Invest in the people and processes that will scan for a mismatch between employees’ skills and their assigned projects. Adjust roles or transfer employees between groups when mismatches are found. The goal is employees stretched neither too much nor too little by their roles. • Fix the middle: Identify and fix perverse incentives, the unintended consequences of well-intentioned rewards. Pay special attention to the dangerous middle-manager levels, the weakest point in the battle between loonshots and politics. Shift away from incentives that encourage battles for promotion and toward incentives centered on outcomes. Celebrate results, not rank. • Bring a gun to a knife fight: Competitors in the battle for talent and loonshots may be using outmoded incentive systems. Bring in a specialist in the subtleties of the art—a chief incentives officer. • Fine-tune the spans: Widen management spans in loonshot groups (but not in franchise groups) to encourage looser controls, more experiments, and peer-to-peer problem solving.