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What is the “bullets before cannonballs” approach to innovation? What are the three characteristics of a good bullet, according to Jim Collins?
The “bullets before cannonballs” is a concept developed by Jim Collins to describe an empirical approach to business innovation. A bullet can be a new product, service, technology, process, or even an acquisition, as long as it has the following characteristics: 1) it doesn’t cost much, 2) it has minimal consequences, and 3) it doesn’t disrupt the enterprise.
Keep reading to learn about the “bullets before cannonballs” approach to innovation.
Firing Bullets Before Cannonballs
When deciding on new products or services to introduce, the research shows that 10X companies tend to take a “bullets before cannonballs” approach, relying on empirical data to back up innovation. They first fired off “bullets,” testing and experimenting to see what they hit. Once they’d gathered convincing data, they brought out the big guns. They concentrated all their firepower into “cannonballs” that were calibrated for success, aimed in the direction that bullets had shown to have the greatest potential.
In contrast, comparison companies fired uncalibrated cannonballs straightaway. These big bets, lacking empirical data to back them up, depleted resources and left the comparison companies vulnerable in times of trouble.
- Example: In 1968, Southwest’s comparison company, PSA, went all out when they aimed to be a one-stop-shop for travelers, launching a program called “Fly-Drive-Sleep.” Instead of testing the concept by buying just one hotel and partnering with a rental-car company (firing bullets), they took out long-term leases on hotels and bought a rental-car company, expanding fast (firing an uncalibrated cannonball). The cannonball missed its mark and PSA suffered losses year after year. After that, PSA fired uncalibrated cannonball after uncalibrated cannonball, hoping one would hit the mark: They acquired jumbo jets, they tried launching a joint venture, they went into oil and gas exploration. However, they were also plagued with issue after issue, from an oil embargo to a recession to lawsuits and workers’ strikes. It all proved to be too much and by 1986, they were taken over by US Air.
It’s never a good idea to fire an uncalibrated cannonball, whether it hits the mark or not. If it fails, then it may leave you vulnerable to an ever-changing world. If it succeeds, then it may encourage you to keep recklessly firing uncalibrated cannonballs. Neither is it a good idea to simply fire bullets without following through with a calibrated cannonball—your company won’t do anything great that way. Do what 10Xers do and fire bullets first to see what works, then fire a cannonball. Forget about any bullets that weren’t shown to hit anything worthwhile. Better to have a field of misfired bullets than an uncalibrated cannonball that can cause irreparable damage.
It’s worth noting that comparison companies weren’t the only ones to launch uncalibrated cannonballs—even 10X companies made mistakes. The difference was that comparison companies tended to try to salvage the situation by firing another cannonball, while 10X companies quickly learned their lesson and went back to firing bullets.
Characteristics of a Good Bullet
A bullet can be any new element that you introduce into the business (e.g. a product, service, a function or department, etc.) as long as it has these three characteristics:
- It doesn’t cost much. Take note that low cost is relative to the enterprise. What doesn’t cost much for a billion-dollar company will likely be too much for a startup.
- It has minimal consequences. A good bullet doesn’t expose a company to much risk—if it doesn’t work, the company won’t suffer.
- It doesn’t disrupt the enterprise. The bullet might entail a lot of work from a person or a group of people, but it shouldn’t distract the whole company.
- Example: Whenever Biomet made a new acquisition, they made sure that their balance sheet would remain strong. These acquisitions, or bullets, thus met the three criteria. Meanwhile, their comparison company, Kirschner, made big, risky acquisitions that left them heavily in debt. Kirschner eventually sold out to Biomet.
Sometimes, you don’t even have to fire your own bullets—you can learn from what others have done.
- Example: Southwest Airlines was a self-proclaimed copycat of PSA. They replicated in Texas what PSA did in California, mimicking everything from the operation manual to the culture. But Southwest came out on top by sticking to their 20 Mile March and continuously firing bullets before cannonballs.
Example of a 10X Company That Innovated the Right Way
Amgen wanted to find the best application of recombinant-DNA technology, so they:
- Fired bullets… They tried a dozen different applications for recombinant-DNA technology, from a Hepatitis-B vaccine to a chicken growth hormone to a bioengineered dye for blue jeans.
- …then fired a calibrated cannonball. Among the bullets, erythropoietin (or EPO, which stimulates the production of red blood cells) was the most viable. Once Amgen was satisfied with the empirical data, they fired a cannonball: They funneled resources into rolling out EPO.
Amgen scored a huge win with EPO, as it went on to become the first billion-dollar bioengineered product in history.
Exercise: Innovate Like a 10Xer
10Xers increase their chances for success by using empirical data to back innovation.
Think about cannonballs that you’ve fired. Which ones were calibrated, and which ones were uncalibrated?
What were the results of firing calibrated cannonballs?
What were the results of firing uncalibrated cannonballs?
Reflect on your uncalibrated cannonballs. What kind of bullets could you have fired to determine if you were on the right track?
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