“First, you fire bullets (low-cost, low-risk, low-distraction experiments) to figure out what will work—calibrating your line of sight by taking small shots. Then, once you have empirical validation, you fire a cannonball (concentrating resources into a big bet) on the calibrated line of sight. Calibrated cannonballs correlate with outsized results; uncalibrated cannonballs correlate with disaster. The ability to turn small proven ideas (bullets) into huge hits (cannonballs) counts more than the sheer amount of pure innovation.”
You can see how this could be a very valuable concept, especially in large organizations. Paralysis brought on by the sheer size of an organization and diseconomies of scale, due to all of the fiefdoms and moving parts, mean that it is difficult for these companies to innovate. By using small experiments to calibrate, such an organization overcomes bureaucratic inertia and de-risks itself and its management from failing big. Faster, cheaper, and useful experimentation could lead firms towards accurate innovation, or indeed get them to do something, anything at all.
I’ve been noticing something about Jim Collins lately. His work is incredibly popular in some quarters. So much so that many strategies are invisibly and unknowingly implemented from the fundamentals espoused in his works. His books Good to Great and Built to Last are so influential that, in some areas, they are gospel. The same is true with Clayton Christensen’s concept of the “Innovator’s Dilemma”.
The innovator’s dilemma is best explained thusly:
“[I]ncumbents often are the ones to spot and develop new technologies while easily reorganizing themselves to do so. The problem is they fail to value new innovations properly because incumbents attempt to apply them to their existing customers and product architectures — or value networks. Often new technologies are too new and weak for the more advanced and mature value networks that incumbents operate.
“This leads to the ROI needed to advance the innovation to be seen as low. In other words, management acts sensibly in rejecting the continued investment in these new technologies and act in the company’s best fiduciary interests. Moving into new markets is rejected as they are seen as too small to make a dent for them and their cost structure prohibitive to enter at sensible margins.
“Therefore, new entrants (often founded by frustrated ex-employees of the incumbents) with little or nothing to lose when they enter the market. Initially these small upstarts don’t pose a threat — the new entrants find new markets to apply these technologies largely by trial and error, at low margins. Their nimbleness and low cost structures allow them to operate sustainably where incumbents could not.
“However, the error in valuing these technologies comes from what happens next. By finding the right application use and market, the upstarts advance rapidly and hit the steep part of the classic ‘S’ curve, eventually entering the more mature markets of the incumbents and disrupting them.”
Together the innovator’s dilemma and bullets before cannonballs are almost universally held true in some circles. They are unquestioned, much like the laws of gravity or the golden rule of treating others like you wish to be treated.
So universally applicable and so true are these ideas that companies unthinkingly act upon their conclusions without checking to see if the good-sounding broad theory is applicable to their situation. It’s as if the whole world was being run by aphorisms and expressions. If everyone thinks in terms of the “apple not falling far from the tree”, then these kinds of relationships bonds, and this causality will be seen everywhere.
In Dutch, we have the expression: “tegeltjeswijsheid“. This “tile wisdom” is the rather kitsch, but oh-so-true-feeling of sayings that are expressed on old Dutch delftware tiles. In the U.S., it might be the equivalent of idioms embroidered onto throw pillows or written in cursive on wall hangings sold at Marshalls and TJ Maxx.
I’m not going to argue that a 16th century saying is not wise in and of itself. After all it has lasted and people do find it valuable. I’m also not going to claim that Jim Collins and Clayton Christensen don’t bring valuable insight. The opposite in fact. As I said, in some sectors, their knowledge and ideas are so widespread as to be almost universal. Meanwhile, other entrepreneurs and organizations are bereft of the gospels of Collins and Christensen. As a consultant, this leads to some incredibly surprising situations.
A. I’ve repeatedly advised desktop 3D printing companies on strategy. A basic choice is whether to go upmarket, which everyone is and has been doing, or to offer low cost 3D printers to compete with Anet and Creality.
Each firm stated that they did not want a race to the bottom. They instinctively and reflexively were not going to produce low-cost systems. Upon detailed questioning, they were 100% certain that they could not and did not want to compete. But—and here is the kicker—when asked if they’d looked at the economics of trying to make a $500 3D printer, they had not done their research.
Additionally, none had thought through robotic assembly or radically new ways of designing electronics to make printers differently. For example, they could use cell phones and an app as the main electronics in the printer, allowing everyone use disused phones to run the machine. Or they could radically redesign printers for automated assembly. But, no company had actually conducted decent research into this area. So, they were shooting from the hip, but presenting the opinion that low-cost wouldn’t work as the gospel truth. The irony here is that a correct understanding of the Innovator’s Dilemma should have in fact made them more wary of this kind of thinking. But, a false understanding of and complete acceptance of the outlined understanding seemingly made them more vulnerable.
B. Another fun example I run into is the strategy to disrupt everyone including yourself. Some have the Innovator’s Dilemma tattooed in their minds and have a predilection to want to disrupt everyone and everything in exactly the same pattern as is outlined in the book. I’ve seen several examples of people who were so disruption-focused that they forgot to build businesses for themselves. They seem intent to destroy what was there before. While this may all be good and dandy, without engineering a good value proposition, brand, customers, and business for yourself, you won’t survive what you’ve disrupted.
C. Some organizations always experiment with everything and would continually engage in lightweight pilot projects all the time. They would even go as far as to test out product names, site layouts, campaigns, and value propositions with many partners, customers, and people in the firm. This led to an inclusive internalized experimentation as a way of life at these firms.
Other firms never do any experiments. These idea-lead companies think they know everything. In meetings and brainstorms, completely unvalidated futures emerge. It is often jarring to go from one of these firms to the next. With one, experimentation is a way of life, while, with the others, the mind is the only lab by which to judge the future.
D. The bullets before cannibals scenario is also something I’ve seen repeatedly. Here the organization is engaged in experimentation and targeted innovation through a broad spectrum belief in the Bullets Before Cannonballs concept. But, if one looks at why experiments are being conducted, then what is really going on actually involves different factions within the company hierarchy using these experiments to make others look bad, as power grabs, or to curry favor. So, an innovation project is not about discovering what works but rather is about one VP making the other look like a muppet at the big meeting. Or it is about showcasing just how good Mike is at “breakthrough thinking”. Or it’s showing that the “future is digital” as board member Jane always says. This leads to a perverse situation where ostensibly—and to everyone’s delight—the company is being innovative, but, in reality, the budget is being used as internal comms ammo to benefit some careerists in the firm. So, rather than bullets leading to accurate cannonballs, it’s bullets before cannibals.
As a 3D printing industry, we’re often very close to these innovation desires and new market tendencies of businesses. There was a time when 3D printing was seen as innovation ketchup. You could just add a bit of 3D printing to your boring firm and, magically, you would become innovative. Our iterative and agile way of developing products enmeshes very well with a Good-to-Great, Innovators-Dilemma way of thinking, as well. We can make you agile. We can d-risk you. With our technology, you can try experiments. Use 3D printing and you too can have it all.
Having been a victim of corporate innovation and a prisoner of conscience at competence centers, I, for one, know that we must be cautious.
- We must realize that certain concepts are held to be such inalienable truths so as to forever remain untested.
- We must know that, even though there is no politics on the org chart, every company is really more like a Former Yugoslavia containing republics than a unitary unified organization.
- Humans are fallible and flawed and enterprises are confederations of tribes of these humans.
- There is no organization without politics, only instances where you are too inconsequential to know what the politics are.
Now I have my own tile wisdoms. If you would believe enough in them, they would cease to be worthwhile, but instead inhibit your own critical thinking about your actual situation. If everyone would believe enough in them they would become so internalized as to become dangerous.
The siren call of the world’s innovation managers is upon us. We must tie ourselves to our masts to resist. If we get swallowed up by projects that are barbed threats to other board members or innovations that are nothing more than self-promotional ads, then our work—and indeed our technology—will get lost in a morass of manager speak. We are but hapless explorers we must beware of cannibals.
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