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jerryking : marginal_improvements   13

Why moonshots elude the timid of heart
February 14, 2020 | Financial Times | by Tim Harford.

* Loonshots — by Safi Bahcall.
* Major innovations tend to result from investment that is high-risk, high-pay-off.
* Executives at the Cambridge, UK outpost of an admired Japanese company fret that success rate of their research and development, at 70%, was far too high. It signals that research teams had been risk-averse, pursuing easy wins at the expense of more radical and risky long-shots.
* Disney, the belief is that Disney if you weren't failing at half of your endeavours, you weren’t being brave or creative enough.
* The problem is a societal/systematic preference for marginal gains over long shots---It is much more pleasant to experience a steady trickle of small successes than a long drought while waiting for a flood that may never come.
* marginal gains do add up, but need to be bolstered by the occasional long-shot breakthrough.....Major innovations such as the electric motor, the photo­voltaic cell or the mobile phone open up new territories that the marginal-gains innovators & tinkerers can further exploit.[JCK: from Simon Johnson, "public investments in research and development contribute to what the authors call the “spillover effect.” When the product of the research is not a private firm’s intellectual property, its impact flows across the economy."]
* the UK Conservative party’s promise to establish “a new agency for high-risk, high-pay-off research, at arm’s length from government” — a British version of the much-admired US Defense Advanced Projects Research Agency.
* DARPA's failure rate is often said to be around 85%.
* a low failure rate may indeed signal a lack of originality and ambition.
* Arpa hires high-quality scientists for short stints — often two or three years — and giving them control over a programme budget to commission research from any source they wish.
* the Howard Hughes Medical Institute, a foundation, deliberately looks for projects with an unusual or untried approach, but a large potential pay-off.....HHMI gets what it pays for — more failures, but larger successes, compared with other grant-makers funding researchers of a similar calibre.
* how long will UK politicians tolerate failure as a sign of boldness and originality? Eventually, they will simply call it failure.
* the trilemma: Be cautious, or fund lots of risky but tiny projects, or fund a few big, risky projects from a modest budget and accept that every single one may flop.
audacity  big_bets  boldness  books  breakthroughs  Cambridge  DARPA  failure  game_changers  high-reward  high-risk  incrementalism  industrial_policies  innovation  jump-start  marginal_improvements  moonshots  originality  politicians  public_investments  publicly_funded  quick_wins  R&D  risk-aversion  science  small_wins  spillover  success_rates  thinking_big  Tim_Harford  timidity  United_Kingdom 
12 days ago by jerryking
Grand follies and the art of thinking big
February 22, 2019 |Financial Times| by Janan Ganesh.

Who would rather that Airbus had never made the bet at all? Who would live in a world that never risks over-reach?

A defender of grand follies is spoilt for examples that turned out well........Today’s vainglorious travesty is tomorrow’s untouchable fixture of the landscape. We are lousy judges of future tastes, including our own....Even if an audacious project fails, and fails lastingly, it can still trigger success stories of other kinds. Some of this happens through the sheer technical example set: the A380, like Concorde before it, forced engineers to innovate in ways that will cascade down the decades in unpredictable ways. Some of the most banal givens of daily life — dust busters, wireless headsets — can be traced back to that messianic project we know as the space programme.

Then there is the inspiring spectacle of just trying to do something big. Progress through tinkering counts no less than progress through great leaps, but only the second kind is likely to electrify people into venturing their own efforts. Without the grand gesture — and the risk of humiliation — any field of endeavour is liable to stagnate.....Perhaps an exhausted west now prefers to tinker all the same. Big ideas are often paid for out of idle wealth (think of Elon Musk’s fortune, or Alphabet’s cash pile) and the existence of this can seem almost distasteful in a culture that is newly sensitive to inequality. As for largeness of vision, there was plenty of the stuff in the forever wars and pre-crash banking. It would be strange if people who lived through those events did not now flinch at the sight of excitable visionaries brandishing schemes.
Airbus  audacity  big_bets  breakthroughs  Elon_Musk  fallacies_follies  game_changers  humiliation  incrementalism  inspiration  Janan_Ganesh  Jeff_Bezos  marginal_improvements  moonshots  overreach  risks  thinking_big  tinkerers  visionaries 
february 2019 by jerryking
Marginal gains matter but gamechangers transform
25 March/26 March 2017 | FT | by Tim Harford.

In the hunt for productivity, the revolutionary long shot is worth the cost and risk.

.............................As Olympic athletes have shown, marginal improvements accumulated over time can deliver world-beating performance,” said Andrew Haldane in a speech on Monday, which is quite true. Mr Haldane, the Bank of England’s chief economist
........The marginal gains philosophy tries to turn innovation into a predictable process: tweak your activities, gather data, embrace what works and repeat.......As Mr Haldane says, marginal improvements can add up.

But can they add up to productivity gains for the economy as a whole? The question matters. There is no economic topic more important than productivity, which in the long run determines whether living standards surge or stagnate.
........
The idea that developed economies can A/B test their way back to brisk productivity growth is a seductive one.

An alternative view is that what’s really lacking is a different kind of innovation: the long shot. Unlike marginal gains, long shots usually fail, but can pay off spectacularly enough to overlook 100 failures.
.....
These two types of innovation complement each other. Long shot innovations open up new territories; marginal improvements colonise them. The 1870s saw revolutionary breakthroughs in electricity generation and distribution but the dynamo didn’t make much impact on productivity until the 1920s. To take advantage of electric motors, manufacturers needed to rework production lines, redesign factories and retrain workers. Without these marginal improvements the technological breakthrough was of little use.
....Yet two questions remain. One is why so many businesses lag far behind the frontier. .......The culprit may be a lack of competition: vigorous competition tends to raise management quality by spurring improvements and by punishing incompetents with bankruptcy. ....
But the second question is why productivity growth has been so disappointing. A/B testing has never been easier or more fashionable, after all. The obvious answer is that the long shots matter, too.
.....In a data-driven world, it’s easy to fall back on a strategy of looking for marginal gains alone, avoiding the risky, unquantifiable research (jk: leaps of faith). Over time, the marginal gains will surely materialise. I’m not so sure that the long shots will take care of themselves.
adaptability  breakthroughs  compounded  economics  game_changers  incrementalism  innovation  leaps_of_faith  marginal_improvements  moonshots  nudge  organizational_change  organizational_improvements  organizational_structure  power_generation  production_lines  productivity  productivity_payoffs  slight_edge  taxonomy  thinking_big  Tim_Harford 
march 2017 by jerryking
How to Avoid the Innovation Death Spiral | Innovation Management
By: Wouter Koetzier

Consider this all too familiar scenario: Company X’s new products developed and launched with great expectations, yield disappointing results. Yet, these products continue to languish in the market, draining management attention, advertising budgets, manufacturing capacity, warehouse space and back office systems. Wouter Koetzier explores how to avoid the innovation death spiral....
Incremental innovations play a role in defending a company’s baseline against competition, rather than offering customers superior benefits or creating additional demand for its products.
Platform innovations drive some market growth (often due to premium pricing rather than expanded volume), but their main function is to increase the innovator’s market share by giving customers a reason to switch from a competitor’s brand.
Breakthrough innovations create a new market that the innovator can dominate for some time by delivering new benefits to customers. Contrary to conventional wisdom, breakthrough innovations typically aren’t based upon major technological inventions; rather, they often harness existing technology in novel ways, such as Apple’s iPad.......A recent Accenture analysis of 10 large players in the global foods industry over a three-year period demonstrates the strategic costs of failure to innovate successfully. Notably, the study found little correlation between R&D spending and revenue growth. For instance, a company launching more products than their competitors actually saw less organic revenue growth. That’s because the company made only incremental innovations, while its competitors launched a balanced portfolio of incremental, platform and breakthrough innovations that were perceived by the market as adding value.
Accenture  attrition_rates  baselines  breakthroughs  correlations  disappointment  downward_spirals  howto  incrementalism  innovation  kill_rates  life_cycle  portfolios  portfolio_management  platforms  LBMA  marginal_improvements  Mondelez  moonshots  new_products  novel  product_development  product_launches  R&D  taxonomy 
march 2016 by jerryking
If I was...setting out to be an entrepreneur - FT.com
January 15, 2014 | FT | By Daniel Isenberg.

“Worthless Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value”.

...If I were setting out as an entrepreneur today, I would buy an existing company to scale up rather than build a start-up from scratch. I would make incremental tweaks of improvement rather than innovate, exercise cool judgment rather than hot passion and build my departure plan from day one...a lot of great businesses, such as PayPal [the online payments system] and Kaspersky [the internet security company] are carved out of, or combined from, existing assets, or are family businesses taken sky-high by the second or third generation...Rather than start a new company, I would buy a rusty old business to fix up and grow as fast as I could. I want a discarded company that is undervalued but can be dusted off, refurbished with vision and talent, and scaled up. I would be talking to venture capitalists....I know that proprietary technology is not a market maker by itself. Great marketing and management almost always trump big innovation.

Minnovation – small tweaks on existing products – is what moves the ball of economic growth forward. Neither Facebook nor Google, for example, were technology pioneers.

Big innovations are few and far between and are often the stuff of large companies with long patience and deep pockets....Next, I would drain my venture of passion and replace it with commitment, hard work and realistic and relentless self-assessment....start with a stark test of harsh neon lights, exposing every flaw and crack long before the market does so that I can fix them before the customers vote with their feet....plan one's passionless departure from the start, creating a platform to allow the talented people and partners I hire to outperform me very soon.
entrepreneur  entrepreneurship  rules_of_the_game  unglamorous  books  Daniel_Isenberg  advice  howto  passions  exits  lessons_learned  turnarounds  contrarians  scaling  minnovation  undervalued  under-performing  carveouts  family_business  proprietary  incrementalism  self-assessment  customer_risk  breakthroughs  large_companies  vision  refurbished  spin-offs  hard_work  dispassion  marketing  management  commitments  marginal_improvements  unsentimental  outperformance 
january 2014 by jerryking
If BlackBerry is sold, Canada faces an innovation vacuum - The Globe and Mail
Aug. 17 2013 | The Globe and Mail | KONRAD YAKABUSKI.

The sale and breakup of a flagship technology company is a reoccurring theme in Canadian business. But this time is different. If BlackBerry Ltd. goes, there is no ready replacement. That’s a telling switch from the situation Canada faced with the sale of Newbridge Networks in 2000 and the demise of Nortel Networks in 2009....Canada has an innovation bottleneck. An abundance of science is generated in university labs and start-up firms but most of it never finds its way into commercial applications. Risk-averse banks and too many businesses of the bird-in-the-hand variety remain the weak links in Canada’s innovation system.

“We punch above our weight in idea generation,” observes Michael Bloom, who leads the Conference Board of Canada’s Centre for Business Innovation. “But the further you move towards commercialization, the weaker we get as a country.”....Innovation can be driven by any sector, even the old-economy resource extraction business of the oil sands. But tech firms remain by far the most R&D-intensive players in any economy.

Hence, the tech sector is a key barometer of a country’s innovation strength. And innovation matters because it has a profound influence on our living standards – it is “the key long-run driver of productivity and income growth,” ...Canadian businesses remain oddly complacent.

“We tend in this county not to look at the true market opportunity of innovation,” Mr. Bloom adds. “If you only see a market of 35 million people, you’re going to see more risk than if you see the market as Europe, the U.S. and Asia. Americans see risk, but also great opportunity.”

It’s no coincidence that many of Canada’s greatest entrepreneurs and innovators have been immigrants. Unlike his American counterpart, the average Canadian business graduate does not dream of becoming the next Sergey Brin, Steve Jobs or, for that matter, Peter Munk.

Mr. Lazaridis and ex-BlackBerry co-CEO Jim Balsillie notwithstanding, how many Canadian entrepreneurs and innovators have truly changed the world, or aspire? By all accounts, not that many. A Conference Board study released last month found that only 10 per cent of Canadian firms (almost all of them small ones) pursue “radical or revolutionary” innovations. Large firms focus at best on “incremental” innovations.
Blackberry  bottlenecks  commercialization  competitiveness_of_nations  complacency  hollowing_out  Konrad_Yakabuski  Newbridge  Nortel  innovation  idea_generation  ecosystems  breakthroughs  incrementalism  large_companies  sellout_culture  Jim_Balsillie  moonshots  immigrants  Canada  Peter_Munk  market_opportunities  weak_links  thinking_big  oil_sands  resource_extraction  marginal_improvements  innovation_vacuum  punch-above-its-weight  This_Time_is_Different 
august 2013 by jerryking
Thinking Small
Aug 1, 2004 | Inc.com | John Grossmann.

Alan G. Robinson and Dean M. Schroeder "Ideas Are Free: How the Idea Revolution Is Liberating People and Transforming Organizations".
Her six-show-room chain thrives on new ideas. Fishbein collects them in three-ring binders. Since 1995, she's filled four such binders -- at 10 to 20 ideas per page and 200-plus pages per binder, that's more than 10,000 ideas. And the best ones, she says, often turn out to be those that at first appeared simple, even mundane. "The point," she says, "is not the big hit but incremental improvements all the time."

What about the killer app, the bold, outside-the-box brainstorm that is supposed to transform organizations? If you really care about making ideas work for you, forget such ambitious notions, say Alan G. Robinson and Dean M. Schroeder in their new book Ideas Are Free: How the Idea Revolution Is Liberating People and Transforming Organizations. Rather than big, competition-leapfrogging advances, the authors argue that one of the keys to business success is the constant implementation of small ideas -- just like the steady stream of employee suggestions Fishbein collects in her binders. Why singles instead of home runs? The competition inevitably copies or counters your home runs, rendering those gains ephemeral. But after studying idea-generation tactics at 150 companies in 17 countries, Robinson and Schroeder concluded that small ideas, especially those particular to processes or systems, improve companies in almost Darwinian fashion with ongoing small adaptations that are often impossible to copy.
business  innovation  idea_generation  execution  small_business  slight_edge  ideas  process_improvements  books  minnovation  breakthroughs  incrementalism  marginal_improvements  adaptability  leapfrogging  Darwinian 
july 2012 by jerryking
Jobs's Legacy: Changing How We Live - WSJ.com
AUGUST 25, 2011 | WSJ | By WALT MOSSBERG. Jobs changed the
way people live by being willing to take big risks on new ideas, and not
be satisfied with small innovations fed by market research. He insisted
on high quality and had the guts to leave out features others found
essential and to kill technologies, e.g. the floppy drive & the
removable battery. [JCK: An example of "culling"?] And he has been a brilliant marketer, personally
passionate about his products.. he introduced the dominant digital music
player, the iPod, & created the most successful digital media
service, iTunes. He introduced the first super-smartphone, the iPhone,
the only truly successful tablet computer, the iPad, which is in the
process of replacing the laptop, at least in part. He built the world's
largest app store and he built a phenomenally successful chain of retail
stores, too.

Jobs has dramatically changed the mobile phone industry, the music
industry, the film and TV industries, the publishing industry and
others.
Apple  breakthroughs  CEOs  culling  dissatisfaction  gut_feelings  high-quality  imagination  legacies  marginal_improvements  moonshots  resignations  risk-taking  Steve_Jobs  Walter_Mossberg 
august 2011 by jerryking
Schumpeter: Bamboo innovation | The Economist
May 5, 2011 | The Economist | Anonymous. China’s lack of
originality matters less than you may think, believe Dan Breznitz &
Michael Murphree of the Georgia Institute of Technology. In a new book,
“Run of the Red Queen”, they argue that it is wrong to equate innovation
solely with the invention of breakthrough products. In an emerging
economy, other forms of innovation can yield bigger dividends. One is
“process innovation”: the relentless improvement of factories and
distribn. sys. Another is “product innovation”: the adaptation of
existing goods to China’s unique requirements.

The biggest threat to the Chinese model comes from India.
innovation  China  industrial_policies  strategies  books  patents  breakthroughs  portfolios  process_improvements  product-orientated  taxonomy  moonshots  marginal_improvements 
may 2011 by jerryking
When There’s No Such Thing as Too Much Information
April 24, 2011 | HeraldTribune| STEVE LOHR. “The biggest
change facing corporations is the explosion of data,” says David
Grossman, a tech analyst at Stifel Nicolaus.“The best business is in
helping customers analyze & manage all that data.”..The productivity
payoff from a new technology comes only when people adopt new
management skills & new ways of working [i.e. marginal improvements]. “It’s never pure technology
that makes the difference,”It’s reorganizing things — how work is done.
And technology does allow new forms of organization.”...Is there real
evidence of a “data payoff” across the corporate world? New research led
by Erik Brynjolfsson, an economist at MIT, suggests that the beginnings
are now visible...Brynjolfsson and colleagues, Lorin Hitt, (Wharton),
& Heekyung Kim, a grad student at M.I.T., studied 179 large
companies. Those that adopted “data-driven decision making” achieved
productivity 5 to 6 % higher than could be explained by other factors,
including how much the companies invested in tech.
Steve_Lohr  information_overload  analytics  data_driven  Erik_Brynjolfsson  Thomas_Davenport  MIT  Northwestern  books  data  massive_data_sets  organizational_design  productivity_payoffs  marginal_improvements 
april 2011 by jerryking
Think Small - WSJ.com
FEBRUARY 14, 2007 | Wall Street Journal | by RAJAN
VARADARAJAN. Article touting the merits of incremental--versus
radical-- approaches to innovation. Incremental innovations can: help
support radical innovations; play a major role in helping companies
enter new markets, by modifying existing products to suit new customers;
help take charge of fragmented industries -- those with lots of small,
regional competitors; help companies on their home turf (i.e. line
extensions); help a company increase the price premium on its products;
help companies neutralize the impact of competitors' innovations; help
companies respond to big changes in their industry.
innovation  radical  P&G  incrementalism  breakthroughs  fragmented_markets  small_wins  structural_change  taxonomy  new_markets  marginal_improvements  quick_wins 
january 2010 by jerryking
Six Deadly Orthodoxies of Recessions | Articles | Homepage
Jan./Feb. 2009, article in CEO Magazine by Pierre Loewe and
Dave Jones
* Reduce costs selectively, not indiscriminately, monitor carefully the
impact of cost cuts on staff.
* Don't stop investing - seek undervalued assets and opportunities to
upend rivals who only think of retrenching.
* De-risk and lower the costs of innovation efforts by reaching outside
company and by conducting well-designed experiments.
*If your company has developed a new product or business that
significantly enhances the customer value proposition, a recession is
the time to introduce it and get a lasting advantage over more timid
competitors.
*A recession is the time to bypass incremental cost reduction efforts
and to focus employees' energy on innovation aimed at dramatic cost
reduction.
*Even if you have to curtail innovation efforts to conserve cash,
maintain a sufficient level of activity so you can ramp-up efforts
quickly, retain your key innovators, and tap the pulse of the changing
dynamics of the mkt.
innovation  rethinking  lessons_learned  recessions  Michael_McDerment  counterintuitive  CEOs  Daniel_Pink  Freshbooks  economic_downturn  orthodoxy  conventional_wisdom  breakthroughs  new_products  de-risking  cost-cutting  new_categories  undervalued  incrementalism  marginal_improvements  experimentation  moonshots 
february 2009 by jerryking

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