This article appeared in the June 2023 issue of Forbes Asia. Subscribe to Forbes Asia
From 2010 to 2019, the leading force in the international sports franchise was British cycling group Team Sky, led by General Manager Dave Brailsford. Sky has managed to make small improvements in every area of performance including bike frames, gears, wheels, tires, tubes, shoes, helmets, clothing, training, recovery, nutrition and hydration. Mr. Brailsford was even obsessed with finding the perfect hotel room temperature for sleeping. (He said cyclists, exhausted from multi-day races like the Tour de France, sleep best in the cool range of 16 to 18 degrees Celsius.)
Mr. Brailsford called his idea “marginal profit.” If you can accumulate small improvements year after year, you will achieve big results in all activities. This worked out for Sky, winning seven Tour de France team titles from 2012 to 2019 (the last under the new name Team Ineos). Automaker Toyota likewise has a Kaizen system of continuous improvement, often making small tweaks cumulatively to improve its production and quality standards.
Marginal profit is not a sexy subject. Reading about moonshots is much more enjoyable. Try This For Yourself: Which Would You Read About Steve Jobs Or His Successor Tim Cook? The Late Apple Co-Founder’s Life Is All Incredible To Jobsian’s Moonshot I.e. Giant IBM It was about a barefoot hippie who challenged himself. Decades later, Jobs launched the iPhone moonshot in 2007, which former Microsoft CEO Steve Ballmer said was unlikely to succeed. Jobs is a romantic, and romantics love moonshots. But it is Cook, the former chief operating officer, who holds the world record for market value creation by a CEO. Apple was worth $360 billion when Jobs died in 2011. Under Tim Cook, Apple has grown to $2.7 trillion. No other CEO in history has amassed so much wealth. Cook conducted thousands of small-scale experiments and relentlessly analyzed each to obtain results.
As a matter of fact, moonshots don’t happen often. Attempting a moonshot often results in the destruction of the capital and a waste of time. Moonshot success is often an illusion. Often they are stories of small profits growing rapidly. The first moonshot, his Apollo 11 in 1969, owed much to a silicon chip invented in 1959 that doubled his power every 18 months. The rival Soviet Union had superior rocket technology but lacked the guidance system performed by these tiny chips. The Soviet lunar shot failed because it was a lunar shot.
Green technologies are often described by politicians and the media as the moonshot to reduce and eventually eliminate the world’s dependence on fossil fuels. But it’s a magical idea. The contribution of wind, solar and biofuels to the global energy mix has changed little in 20 years. The electric vehicle revolution is being slowed down by existing battery technology, which is advancing at 5% to 7% annually at best. That’s not Moonshot’s pace.
If you believe that sustainability and reducing your carbon footprint are good for the world, you will find that real sustainability comes from small profits. Shell uses sensor data and predictive analytics to steadily reduce emissions from offshore drilling each year. Maersk is digitizing its supply chain to reduce paperwork and eliminate wasted time at ports. Toyota’s vision is that hybrid engines are not yesterday’s technology, and that they continue to have a long improvement curve. This is Singapore’s data-driven quest for results-oriented governance.
Achieving a true moonshot would require a breakthrough in science. Wireless communication today required the discovery of the electromagnetic spectrum in the 19th century. Nuclear power required nuclear fission, built on a new kind of physics born in the 1890s. The green moonshot that excites people today requires major advances in materials science. Will that happen? no doubt. when? Hard to say. Engineering always lags behind scientific discoveries.
If you want to solve big problems, improve the world, delight your customers, grow your company and make money, be a small profit enthusiast.
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