Imagine a nice, brightly lit meeting room, a highly energized team wrapping up their problem-solving discussion. Someone trying to wrap up asks — "what's next?" You are most likely to hear:
- 1.We have some quick wins we can prioritize
- 2.Let's prioritise the top ideas; this is likely to address 70-80% of the problem
This is very common, and there is absolutely nothing wrong with it. However, I will argue this approach is not enough for excellence or innovation or disproportionate outcomes. Getting to disproportionate outcomes by definition cannot be common.
Why Quick Wins Are Popular
Doing something is better than doing nothing. So approach 1 is a no-brainer. Delivering approach 2 is a bit harder because you are most likely to find tougher challenges. But if you get it right you unlock significant value.
The last 10-20% is very hard work, especially the last 10%. You hit another wall — diminishing marginal returns. Most teams will move on to the next problem. Only a small fraction achieves outstanding outcomes.
Two Ways to Get There
A) Execute 1 and 2 like a routine — if we continue in a loop (ideate, implement, learn, redefine, ideate again), we are bound to see great results. You need to solve 70-80% of the problem in every iteration like a machine. Example: FMCG firms which are older than our grandparents.
B) Spend time solving the last 10-20% — what seems like diminishing returns could be the area of innovation. Take Zerodha: most stock brokers kept doing incremental builds. Zerodha believed that nailing the user experience would create a new market — the original graph of diminishing returns thrown out the window. Google encouraged employees to spend ~20% of their time on anything — naturally many of these would have been manifestations of their problems and skills.