Over the summer I read a couple of great books. How Google Works and Zero to One. Both books were great reads and there are a number of common themes:
- Think about the platform
- Think global scale
- Hire the best talent
- Etc
The theme I want to draw on is are you thinking big enough or are you thinking about incrementalism.
In Zero to One Peter Thiel’s mantra is to think about 10x. To be successful in a market your platform needs to be 10x better than the competition, otherwise where is the long term differentiation and why would a customer bother to switch. And in How Google Works there is a similar observation from Larry Page with his directive “You aren’t thinking big enough… Think 10x.
The premise is that 10x is a mix between the possible (we can do this) and the impossible (we give up trying to solve it).
Of course being ambitious in your plans is nothing new. Jack Welsh of GE always believed in setting big targets as he believed that they not only energised the team but also had a greater chance of success. “We have found that by reaching for what appears to be the impossible, we often actually do the impossible; and even when we don’t quite make it, we inevitably wind up doing much better than we would have done.”
The simple example would be if a manager presents a business case of $100, they are likely to achieve somewhere between $95 or $105, whereas if they have a stretch of say $120 they may miss this but will likely hit $110 to $115, a much better result for the business.
If a manager is challenged with an incremental increase they will give an incremental answer, add another feature, trim a small amount of cost, tweak the sales channel.
If they are challenged for a significant increase they need to rethink their business, re-engineer the processes, radically improve the product, or open new markets and channels.
So the question is in your business cases and plans are you challenging the team to think differently and really aim for 10x or letting them get away with incrementalism?
KS.
