Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries 1

What’s in it for me? Get insight into innovation in action.


What do Renaissance scientists charting the movement of the planets, military planners battling Hitler’s U-boats and an American airline getting to grips with a newly deregulated market have in common? Well, their successes were the result of pursuing loonshots – ideas that seem downright crazy right up to the moment it becomes unthinkable that anyone ever did things differently.

But here’s the thing: for every world-changing idea, there are dozens – if not hundreds or thousands – that don’t pan out. As Thomas Edison once put it, progress is measured in failures: each defeat rules out one possibility and brings you that much closer to the solution. On the one hand, that makes experimentation vital. On the other, it means that real progress is expensive, time-consuming and ultimately risky.

Those three words fill every risk-averse, efficiency-maximizing organization with an eye for the bottom line with dread. That’s why they often end up missing out on the next big thing. So what’s the answer? Well, as you’ll learn from the examples in these blinks, there is a way to balance innovation and what the author, Safi Bahcall, calls franchising – keeping the already successful parts of an organization ticking over. The secret is to separate the two activities and provide a sheltered, protective space for creatives to work on their ideas. Think of it as a loonshot nursery.

So read on to learn how the most successful organizations do that, and • why the US military took a pass on an early radar prototype;
• how even proven innovators can end up in blind alleys; and
• what loonshots can tell us about the history of the West.

Innovation is a key part of organizational success, and it needs to be carefully nurtured.

Innovation takes time, money and work. The greatest ideas fail a thousand times before they succeed. But here’s the rub: organizations often get cold feet before path-breaking projects ever get off the ground. What could have been the next great thing ends up as little more than a pipe dream. In other words, they fail at nurturing loonshots – ideas that seem positively unhinged right up to the moment they turn the world on its head.

So what’s the right way to foster innovation? Well, it’s sometimes argued that it comes down to culture – the informal rules governing organizational life. There’s a problem with that explanation though: it’s wrong. Take Nokia. The Finnish multinational enjoyed a three-decade hot streak between the 1970s and the early 2000s. Its innovations included the world’s first cellular network, car phone, all-network analog phone and the GSM phone, making it one of Europe’s most profitable businesses.

Experts attributed the company’s success to its culture. Magazines like Businessweek ran features on Nokia’s egalitarian ethos while the CEO put it down to the fact that employees were encouraged to have fun and think outside the box. Fast forward to 2004. Internally, nothing had changed. In fact, the engineers behind all those hits had just had another eureka moment: an internet-ready touchscreen phone with a state-of-the-art camera and an online app store to go with it. Nokia’s leadership shot the project down. Three years down the line, Steve Jobs unveiled the iPhone. The rest is history.

What went wrong? Well, Nokia’s structure had changed. That’s often part and parcel of growth. When organizations start out, employees have a high stake in success: if a small biotech firm produces a wonder drug, for example, everyone involved won’t just be incredibly rich – they’ll be heroes! Failure, on the other hand, means they’ll be out of a job. Perks like fancy titles and promotions don’t mean very much in such a free-flowing, high-stakes environment.

As organizations grow, that changes. Those bonuses become ever more attractive, and individuals’ stakes in projects decrease. That breeds a conservative mind-set, and companies become franchise operations dedicated to protecting the parts of their businesses which are already successful. The outcome? Innovation falls by the wayside as decision makers come to view loonshots like Nokia’s proto-iPhone as intolerably risky. But that isn’t a law of nature – organizations can put structures in place that encourage innovation. Let’s see how.