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by
Safi Bahcall
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December 25, 2020 - January 1, 2021
But otherwise, extracting culture tips, after the fact, from its terrific stock price performance is like asking the guy who just won the lotto to describe the socks he was wearing when he bought the winning ticket.
Ed Catmull
All phase transitions are the result of two competing forces,
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.
Key to that dynamic equilibrium—and Bush’s ability to speak freely to generals—was support from the top.
They train people for the project champion job—the Deak Parsons skill-set—and elevate their authority. It goes against the grain. On the creative side, inventors (artists) often believe that their work should speak for itself. Most find any kind of promotion distasteful. On the business side, line managers (soldiers) don’t see the need for someone who doesn’t make or sell stuff—for someone whose job is simply to promote an idea internally. But great project champions are much more than promoters. They are bilingual specialists, fluent in both artist-speak and soldier-speak, who can bring the
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overcoming the urge to defend and dismiss when attacked and instead investigating failure with an open mind.*
a surprising breakthrough in product—a technology that was widely dismissed before ultimately triumphing—a P-type loonshot.
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.
Deaths from P-type loonshots tend to be quick and dramatic.
Deaths from S-type loonshots tend to be more gradual and less obvious.
Learning to watch your blind side is one lesson, an important one. But there is a much bigger one.
It’s the key to the fourth quadrant identified at the end of chapter 1—the Trap.
the Moses Trap: When ideas advance only at the pleasure of a holy leader—rather than the balanced exchange of ideas and feedback between soldiers in the field and creatives at the bench selecting loonshots on merit—that is exactly when teams and companies get trapped.
First: The dangerous, virtuous cycle builds momentum
Second: The franchise blinders harden
Only those P-type loonshots that continue to spin the wheel matter.
Polavision. Instant film continued to spin the instant-print wheel. Digital did not.
Land and his management team dismissed digital because for 30 years they had made money from selling film: their cameras generated much less income than their instant-print cartridges. With digital, there was no film.
said. Land dismissed the new technology because he didn’t look for the hidden S-type loonshots: all the ways digital could enable new streams of income. In other words, just like Juan Trippe, he leaned on his strong side—P-type loonshots—and didn’t watch his weak side: S-type loonshots.
Third: Moses grows all-powerful and anoints loonshots by decree
Bush and Vail managed the transfer rather than the technology.
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 the births of living creatures are at first ill-shapen, so are all Innovations, which are the births of time.”
Originality is fragile. And, in its first moments, it’s often far from pretty. This is why I call early mock-ups of our films “Ugly Babies.” They are not beautiful, miniature versions of the adults they will grow up to be. They are truly ugly: awkward and unformed, vulnerable and incomplete. They need nurturing—in the form of time and patience—in order to grow. What this means is that they have a hard time coexisting with the Beast.…
Franchise projects are easier to understand than loonshots, easier to quantify, and easier to sell up the chain of command in large companies.
system mindset and outcome mindset.
How Life Imitates Chess.
not just why the move was bad, but how he should change the decision process behind the move.
outcomes. A failed outcome, for example, does not necessarily mean the decision or decision process behind it was bad.
Evaluating decisions and outcomes separately is equally important in the opposite case: bad decisions may occasionally result in good outcomes.
Relinquishing control of a creative project and trusting in the inventor or artist or any other loonshot champion is not the same as relinquishing attention to detail.
“I discovered that the best innovation is sometimes the company, the way you organize.”
The Texas group “had to sandbag the Alto III, because with it they wouldn’t make their numbers and therefore wouldn’t get their bonuses. It would have been an absolutely impossible burden on them to be successful in making typewriters and also introduce
the world’s first personal computer. And they should never have been asked to do it that way. So it was shot down.”
the weak link is not the supply of ideas. It is the transfer to the field. And underlying that weak link is structure—the design of the syste...
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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
“Learn by trying to understand simple things in terms of other ideas—always honestly and directly.”
As team size crosses a “magic number,” the balance of incentives shifts from encouraging a focus on loonshots to a focus on careers.
a system with mostly local connections but occasional distant ties a “small-world network.”
The number of cliques decreased with the size of the clique by an unusual power: 2.5.
internet. Identifying and shutting down the online superspreaders is one strategy for fighting the spread of terror networks.
A third strategy is to increase the fragmentation rate—the rate at which clusters dissolve. The goal is to back a terror network away from the contagion transition, just as prescribed burns back a forest away from its contagion transition. (The authors writing on these topics are reluctant to discuss specifics.)
Maintaining relationships, argued Dunbar, requires brain power. More relationships require more neurons. Extrapolating his straight line from primate brains to human brains, he found that the optimal human group size, if this
hypothesis were true, would be an interesting number: 150.
We intuitively understand that something changes inside teams and companies as they cross a certain threshold in size. But the volume of our neocortex might have nothing to do with it.
We’ll call that salary step-up G (for growth rate).
