When Your Moon Shots Don’t Take Off
Nathan Furr, Jeffrey H. Dyer, Kyle Nel, HBR, January–February 2019 Issue
Recently, the head of innovation at a major industrial conglomerate set up 10 cross-functional teams and gave them an audacious goal: to completely reimagine their businesses. What he got were suggestions along the lines of adding a connected data stream to an industrial tool. He was dumbfounded. Where were the radical new concepts?
The tendency toward incremental thinking plagues companies of all sorts--in spite of our increasingly sophisticated arsenal of innovation tools. And though incremental innovations do have a place in a growth portfolio, they won’t sustain a business over the long term. How can firms come up with something bigger and more meaningful? What’s constraining creativity? Why can’t every company achieve what Google calls “10x thinking”--ideas that lead to 10-fold improvements rather than the more typical 10% ones?
It’s tempting to point to technology, competition, or regulation as the culprit, but those barriers are much more permeable than we imagine. After all, people once thought that a moon landing was impossible, that instant photography was impractical, and that reusable space rockets were simply insane. Then John F. Kennedy inspired a nation, Edwin Land introduced the Polaroid camera, and Elon Musk launched SpaceX.
The real limits to 10x ideas are biases that distort our perceptions and prevent us from seeing possibilities. Cognitive science has started to unpack those biases and the ways that we are “predictably irrational,” and in many fields--such as economics, marketing, and strategy--a more behavioral approach has overturned the dominant paradigm. But the behavioral revolution hasn’t taken hold in the domain of innovation.
When considering new avenues to pursue, most of us see only the opportunities related to the status quo, rather than more-valuable opportunities just out of view. The purpose of this article is to share some approaches that are helping companies sidestep those traps.
The late novelist Ursula Le Guin once said she wrote science fiction to dislodge her mind--and her reader’s mind--”from the lazy, timorous habit of thinking that the way we live now is the only way people can live.” Science fiction helps us engage in mental time travel and allows us to dream about what may be possible. Consider some life-changing breakthroughs science fiction has envisioned or inspired: cell phones (which were based on the officers’ communicators in Star Trek), credit cards (a feature of a futuristic society in a 19th-century novel by Edward Bellamy), robots (conceived in one of Karel Capek’s early-20th-century plays), self-driving cars (foreseen by Isaac Asimov), earbuds (a fictional invention of Ray Bradbury), and atomic power (imagined by H.G. Wells in 1914). Phil Libin, the former CEO of Evernote--who says the concept for that note-taking software came directly from augmented intelligence in the novel Dune--puts it this way: “Science fiction can provide a kind of rigorous optimism….There’s no magic. Science fiction just provides the inspiration and then you make a rigorous plan and go for it.”
In our consulting work, we have seen science fiction help large, established companies visualize a new future for their businesses. Indeed, at Lowe’s, where Kyle was head of innovation, this approach got the executive team members to understand how they could revolutionize retail with augmented reality, robotics, and other technologies.
And that was back in 2012, before Oculus Rift or Pokémon Go even existed. The process simply involved giving customer and technology data to a panel of science fiction writers and asking them to imagine what Lowe’s might look like in five to 10 years. We then gathered their ideas, noted where their perspectives converged and diverged, and integrated and refined the stories. Finally, we shared our “speculative fiction” in comic book form with the Lowe’s executives.
As a result of that project, Lowe’s became the first retailer to deploy fully autonomous robots for customer service and inventory, created some of the first 3-D printing services, and helped place a 3-D printer for making tools on the International Space Station. It also created exosuits (external robotic skeletons) for employees unloading trucks and moving goods onto the store floor, and came up with the first augmented-reality phone for planning remodeling work (which initially sold out in four days). Not only has Lowe’s achieved financial success (3-D imaging capabilities have boosted its online sales by up to 50%), but in 2018 it was named number one in retail innovation in Fortune’s Most Admired Companies ranking and number one in augmented reality on Fast Company’s Most Innovative Companies list.
Although technology features heavily in the Lowe’s example, innovation isn’t about technology. We have used the same process even when no technology was involved.
One evening, as the Nobel Prize–winning physicist Werner Heisenberg was walking through a park in Copenhagen, a fundamental insight about the nature of energy dawned on him. The path he was on was very dark, save only for occasional circles of light cast by the street lamps. Ahead of him, a man appeared in a pool of light under one lamp and then disappeared into the night until he reemerged in the next pool. Suddenly, it came to Heisenberg: If a man, with so much mass, could seem to disappear and reappear, could an electron, with almost no mass at all, similarly “disappear” until it interacted with something else? According to the author and physicist Carlo Rovelli, that insight into how packets of energy interact--which later became Heisenberg’s famous “uncertainty principle”--struck him because he applied an analogy, comparing the man walking between lampposts to an electron.
Analogies have led to breakthroughs in business as well (as Giovanni Gavetti and Jan Rivkin noted in a 2005 HBR article, “How Strategists Really Think: Tapping the Power of Analogy”). Charlie Merrill revolutionized the brokerage industry by applying the analogy of a supermarket, which lets shoppers choose among a host of products and brands. Circuit City, which introduced the superstore approach to electronics retailing in the 1970s, transformed the automotive industry by applying a similar logic (wide selection, low fixed prices with no haggling) to used-car sales, creating CarMax. Though Circuit City went bankrupt after the shift to online retailing, CarMax is now the largest used-car retailer in the world.
Analogies from different domains can sometimes help us make big leaps. The rapid growth of Uber and Airbnb, for example, certainly foreshadowed the emergence of similar “sharing economy” businesses, from recreational vehicles (RVshare.com), to storage (Neighbor), to grocery delivery (Instacart). Another way to jog your thinking is to use an analogy involving how not to do something: How would Google never do it? You can also draw on lessons from failures: What approach did a company that missed the mark try?
Regeneron Pharmaceuticals is renowned for developing new treatments at a small fraction of its competitors’ costs. At the core of its innovation process is a “first principles” approach, which questions the status quo by reexamining the foundational principles about something and then redesigns it from the ground up. “We challenge everything--every concept, every scientific principle--and we argue about it amongst ourselves,” says George Yancopoulos, Regeneron’s president and chief science officer.
SpaceX’s reusable rocket emerged from a similar first principles approach. Founder Elon Musk wanted to buy castoff rockets from the Russians but was rebuffed. As Ashlee Vance recounts in Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, Musk was furiously crunching numbers in a spreadsheet on a flight back from Russia when he turned to Mike Griffin, a future NASA administrator, and Jim Cantrell, a founding executive at SpaceX, and said, “I think we can build this rocket ourselves.” Cantrell recalls, “We’re thinking, ‘Yeah, you and whose army?’” But after reading up on the fundamentals of propulsion, aerodynamics, thermodynamics, and gas turbines, Musk had broken rockets down to their basic principles in his spreadsheet. With that analysis, his team came up with a way to develop affordable, reusable rockets by using simpler commercial-grade, rather than space-grade, components in a smaller architecture. Today SpaceX has performed more than 60 successful flights and 29 successful landings and saved NASA, its major customer, hundreds of millions of dollars. “In most cases people solve problems by copying what other people do with slight variations,” Musk told us. “I operate on the physics approach of analysis by first principles, where you boil things down to the most fundamental truths in a particular area and then you reason up from there.”
As you search for breakthroughs, the set of available opportunities is always determined by the elements you begin with. But we tend to see only the uses or recombinations of those components that are obvious. The key is to discover completely different uses. In evolutionary biology, this happens in a process called exaptation--in which a characteristic that evolved for one purpose is adapted laterally for another use entirely.
How can would-be innovators tap the power of exaptation? They can begin by asking why we use something for one purpose and not another. For example, after Van Phillips lost his leg in a waterskiing accident, he studied biomedical engineering to learn how to design prosthetics. He was surprised to discover that prosthetic design had changed little since World War II. When he explored why, he learned that designers focused on aesthetics--making the prosthesis look like a foot. But Phillips asked, Why does it have to look like a foot? What if instead it acted like a foot? Drawing ideas from pole vaulting, diving boards, and the feet of cheetahs, he created the Flex-Foot, a prosthetic that looks nothing like a foot but gives wearers far greater freedom of movement. (Most Paralympians use versions of it.) By reexamining the purpose of artificial limbs, Phillips revolutionized the field of prosthetics.
Jeff Bezos applies a similar kind of thinking at Amazon, where he encourages teams to look broadly for new uses of their existing capabilities or new ways to solve the problems of existing customers. “With Kindle we had no hardware experience, so we didn’t have the skills,” says Bezos. “But we had a customer need.”
The point of these four innovation approaches is to shake up our thinking and get us past our natural inclination to stick with what we know--to sidestep our cognitive biases. There are certainly other techniques. Amazon, for instance, asks employees to write press releases that introduce an imaginary new product to the market; this encourages them to envision what new offerings could be in a few years. That tactic can even help you with your career. In the month of January, you can write Christmas cards describing what you’ll have accomplished by December. There are also tools to help you make progress. For example, you can create an “artifact trail”--a set of small wins leading up to your vision, which you can begin acting on immediately.
Whatever frameworks or approaches you use, the goal is to focus on what could be. Too often would-be innovators get bogged down in details of what happens to exist today and tone down ideas to make them sound more palatable. But to achieve 10x thinking we have to break free of incrementalism and face down the fear of failure. You need to dream big. There is no objective future out there that we will arrive at one day. There is only the future that we create.
