Far too many people expect profitability, for the product and the business, right out of the gate. When I was at Philips I watched most new product categories and businesses on their slate get cancelled—even for products that were almost ready to ship. Built. Tested. Done. They would die on the vine because the top brass were protecting themselves. Any execs

joining the team always wanted a near guarantee that new products would make money. [See also: Chapter 2.2: Data Versus Opinion: Most people don’t even want to acknowledge that there are opinion-driven decisions.]

They demanded to be shown ahead of time that the unit and business economics of the product were sound. But that was impossible.

They were asking us to predict the future with near 100 percent confidence. They were asking for proof that a baby could run a marathon before it had even learned to walk.

These guys didn’t know much about babies. They knew even less about how to create a new business.

The downside risk of a $100 million project with a 10 percent chance of failure is $10 million. The risk of a $5,000 experiment with a 90 percent chance of failing is $4,500. Yet despite the trivial sums involved, we haven’t come across many organizations where you could get funding for an experiment with a one-in-ten odds of success. It’s crazy that in most organizations, a CEO has an easier time getting a multimillion-dollar project through the board than a frontline operator has in getting a few thousand bucks to run an experiment.

Perversely, the desire to avoid risk often magnifies it. Dumping money into big me-too projects with modest upside is a lot more perilous than seeding lots of early-stage ideas that are further out on the fringe. In the age of upheaval, incrementalism is the riskiest bet of all. What’s needed is a radical shift in how we think about experimentation. The goal isn’t simply to reduce the uncertainty around new products or get them to market faster, but to build an organization where everyone is working to extend the boundaries of what’s possible. That’s how an organization buys insurance against irrelevance.

Lots of companies try to win and still can’t do it. So imagine, then, the likelihood of winning without explicitly setting out to do so. When a company sets out to participate, rather than win, it will inevitably fail to make the tough choices and the significant investments that would make winning even a remote possibility. A too-modest aspiration is far more dangerous than a too-lofty one. Too many companies eventually die a death of modest aspirations.

I was also told that a brand-new CEO shouldn’t be trying to make huge acquisitions. I was “crazy,” as one of our investment bankers put it, because the numbers would never work out and this was an impossible “sale” to the street.

The banker had a point. It’s true that on paper the deal didn’t make obvious sense. But I felt certain that this level of ingenuity was worth more than any of us understood or could calculate at the time. It’s perhaps not the most responsible advice in a book like this to say that leaders should just go out there and trust their gut, because it might be interpreted as endorsing impulsivity over thoughtfulness, gambling rather than careful study. As with everything, the key is awareness, taking it all in and weighing every factor—your own motivations, what the people you trust are saying, what careful study and analysis tell you, and then what analysis can’t tell you. You carefully consider all of these factors, understanding that no two circumstances are alike, and then, if you’re in charge, it still ultimately comes down to instinct. Is this right or isn’t it? Nothing is a sure thing, but you need at the very least to be willing to take big risks. You can’t have big wins without them.