Jim Collins’ latest business strategy extravaganza, “Great By Choice” gave a good concept for validating your strategies empirically. Whether it’s a general change in business strategy or a product launch, it all makes a perfect sense.
The concept is “Fire Bullets Then Cannon Balls”
- Bullets: Low Risk, Low Cost, Low Distraction tests that validate an opportunity. Bullets can be incremental product innovations, new marketing approaches, and even acquisitions. Shooting bullets don’t overtax an organization.
- Cannon balls: Riskier, Costlier, business-defining initiatives. Collins makes a distinction between two types of cannon balls: uncalibrated – high risk gambles, and calibrated – calculated risks proven out by rigorous testing or firing a lot of bullets. Firing calibrated cannon balls is essential for achieving greatness.
Jim Collins’ principle is straightforward, smart business leaders don’t gamble huge resources, or fire cannon balls, on any strategies that haven’t been rigorously tested in the real world. Instead they fire bullets by conducting a series of tests to evaluate and validate their intuition.
For example, Collins points to the original iPod was Apple’s first bullet in the consumer electronics market. It was relatively cheap to produce and didn’t get major investment until the market validated it’s success. Apple then immediately fired cannon balls with the iPod Shuffle, iPod Nano, iTunes, and the iPod Touch. Based on iPod Touch, Apple created iPhone. Based on its success, the next obvious step was to change the game with iPad.
This approach requires patience and discipline. It’s wildly seductive to fire cannon balls and bet it all on an idea, but it’s also suicidal.
The business landscape is littered with the carcasses of people who bet it all on untested strategies. Small business and startups are especially prone to rolling out strategies that burn through precious capital while getting nothing in return.
Source: Pushing Social