Physicist and biotech entrepreneur Safi Bahcall argues in Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries that the secret to creativity as actually organizational structure versus anything else. To Bahcall, the goal is to create a structure where you get people motivated and incented to go for “loonshots,” crazy ideas that ultimately turn into big innovations.
Companies need to separate the “artists” who do primarily creative work from the “soldiers” who focus on operations and execution.
“The Innovation Equation,” which offers four parameters companies can use to tilt the balance in favor of innovation and away from politics. The parameters are:
- Equity Fraction: the fraction of compensation tied to project outcomes vs. tied to rank
- Fitness Ratio: the ratio of two measures–how well employee skills are matched to their projects, and how much politics matters to promotion decisions
- Management Span: the number of direct reports that executives of the company have
- Salary Growth: the increase in salary with promotion
Loonshots also advocates for a new executive position: The Chief Incentives Officer.
