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Don Sull @simple_rules
, 9 tweets, 6 min read Read on Twitter
1) Ambitious goals are a powerful way to drive innovation

@Google lists 10X thinking as first among their principles of innovation

"true innovation happens when you try to improve something by 10 times rather than by 10%"
2) Unfortunately Google's emphasis on ambitious goals is the exception not the norm

We've surveyed more than 500 mostly large, global companies and found that pursuing ambitious goals and innovation are the two traits least likely to lead to promotion
3) When employees set conservative goals they are sure to achieve (aka sandbag), they can achieve those objectives by working harder or making incremental improvements

They don't have to search for creative ways to hit achieve conservative goals
4) When employees set ambitious targets, in contrast, they need to broaden their search for innovative ways to achieve them

@elonmusk's goal of "accelerating the advent of sustainable energy" has lead Tesla to wide experimentation in car design and production processes
5) Broader search spurs greater innovation, but also increases the variance of potential outcomes

The #ModelS was a triumphant innovation--Tesla's automated factory lines not so much

@Tesla is more innovative than @VWGroup or @Toyota, but also more likely to go bust
6) Ambitious goals spur non-incremental solutions, which are high risk, high reward.

Firms can manage the risks of 10X innovations a few ways:

-Strong balance sheet (@Microsoft had $132 billion cash March '18)
-High customer switching costs in core business (@Facebook)
7) Ways to manage risk of 10X innovations (continued)

-Deep-pocketed government patron (@Emirates)
-Diversified portfolio of profitable businesses (J&J)
-Valuable, durable resource (@CocaColaCo brand)
-Balance portfolio of innovations (@Google 70/20/10)
8) Companies should also have a mix of goals--some aspirational and some that must be fully achieved.

@JohnDoerr's book describes how @Google's aspirational objectives drive innovation

But "committed" objectives, like sales quotas or compliance, must be fully hit
9) Bottom line--ambitious objectives are a powerful way to drive innovation

More generally, ambition is a fundamental element of goals that drive strategy execution

But leaders need to recognize and manage the risks of ambitious goals
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