More than 50 years ago, U.S. President John F. Kennedy captured the world’s imagination when he said, “This nation should commit itself to achieving the goal, before the decade is out, of landing a man on the moon and returning him safely to the Earth.” And thus, the term moonshot entered the lexicon as shorthand for “a difficult or expensive task, the outcome of which is expected to have great significance.”

The term has experienced a recent resurgence in the corporate world. Google’s moonshots include expansive projects like its driverless car and Google Glass efforts. In response to a reporter’s question, last week Yahoo! CEO Marissa Mayer said her company’s moonshot is to be “on every smartphone, every tablet, every day, for every Internet user.”

Organizations should have their moonshots. They’re a keystone of what we call a “future-back” approach to strategy, which unlike the “present forward” nature of most strategic-planning processes, doesn’t operate under the assumption that tomorrow will be pretty much like today, and the day after pretty much more of the same. In stable times, present-forward approaches help optimize resource allocation. But in turbulent times, these approaches can lead companies to miss critical market inflection points.

At the heart of the future-back process is a consensus view of your company’s desired future state.This isn’t scenario planning, where you consider a range of possibilities. This is putting a stake in the ground — specifying what you want your core business to look like, what adjacent markets you want to edge into, and the moonshots you’ll try for. And, as Kennedy did, a good future-back strategy goes well beyond the three-year planning horizons that typify most corporate strategy efforts.

A good moonshot has three ingredients. First, it inspires. Reading Kennedy’s quote raises the spirit; a more typical corporate goal of increasing return on invested capital from 13.4% to 13.9%, not so much. That kind of financial target might be important, but it’s unlikely to get people to do extraordinary things. Second, it is credible. It’s easy to assume that a moonshot is just a ridiculous stretch target. But before Kennedy made his speech he had Vice President Johnson do a detailed assessment of underlying technological trends to ensure that the goal had a reasonable chance of success. Finally, it is imaginative. It isn’t an obvious extrapolation of what’s happening today (which for Kennedy would simply have been to fly farther into space), but something that offers a meaningful break from the past.

Google’s moonshots seem to fit these characteristics. Take the driverless car, for example. It’s certainly an imaginative strategy for a company whose core business is selling advertising. It’s undoubtedly inspirational. And there are many reasons to believe that technology will make mass adoption of driverless cars conceivable in the next generation.

On the other hand, while Mayer’s goal is a good one for Yahoo!, it would seem like there’s a need for more inspiration and imagination to really get the company to return to its heyday as one of the world’s most innovative organizations.

Read the rest at Harvard Business Review.

Scott Anthony is the managing partner of Innosight.  Mark W. Johnson is cofounder and senior partner of Innosight.


Leave a Reply

Your email address will not be published. Required fields are marked *