IAN MANN REVIEWS | How to make sure your next big idea actually works

Photo: iStock
Photo: iStock

There is evidence-based reason as to why some ideas fail and why some succeed grandly. This book will help you differentiate, writes Ian Mann. 

The Voltage Effect: How to make good ideas great and great ideas scale, by John List

This book will add value to anyone who stands to benefit from the success of an idea whether in a non-profit, a for-profit or a community organisation. Getting your idea to grow from small to big is both the primary challenge and the primary opportunity.

Author, Professor List, teaches economics at the University of Chicago. His approach to economics is to study people making decisions in the real world to arrive at credible conclusions about cause and effect, and better understand people and motivations.

The word "Voltage" in the title is taken from implementation science. The term is used to describe the intensity in the energy available for implementation.

There is evidence-based reason as to why some ideas fail and why some succeed grandly. There is no single quality that distinguishes ideas that have the potential to succeed at scale, from those that don't. That is why this book is useful; it is a guide for anyone who wants to cull bad ideas and scale great ones to their fullest potential.

List has identified five "vital signs" that will cause voltage drops and will prevent your initiative from taking off. Each of these can be identified in advance, making them the critical test of whether you should go further with your initiative in its current state.

The first is a 'false positive', overestimating how large your idea can become based on your initial success. Or, failing to see that your future success depends on ingredients that cannot be scaled up. The false positive could also come in the form of unintended consequences that you didn't or couldn't notice initially, or be misleading because scaling is just too costly to sustain.

False positives are not an academic problem. Consider the drug prevention initiative D.A.R.E. Programme, which ran for over 24 years. Some 43 million children completed it in over 40 countries. The initial impressions of its efficacy were false positives. D.A.R.E. didn't work. One study even found the programme spurred participants' curiosity and increased the likelihood of experimentation.

A second vital sign is failing to evaluate whether the initial success depended on unscalable ingredients.

The telegenic Jamie Oliver, grew his show The Naked Chef, to cookbooks and finally into the highly competitive restaurant world. Jamie's Italian chain spread to 70 locations in 27 different markets. The unscalable ingredient wasn't that the supply of chefs is limited, as the talent needed for Jamie's Italian was scalable with effort.

Jamie's rapid large-scale expansion failed because of the loss of a less visible ingredient. Without this ingredient, the whole franchise fell apart. This ingredient was the CEO Simon Blagden. He had an uncanny skill for knowing where, when, and how to open new locations, and how to choose franchise partners who would align with Oliver's values.

Blagden, not Oliver, was the secret ingredient that couldn't be scaled or replicated.

The third vital sign that could derail growth is an unintended consequence that backfires.

In 1965, Ralph Nader wrote the book Unsafe at Any Speed: The Designed-In Dangers of the American Automobile in which he slated the auto industry. Within months of the book's publication, the usually sluggish U.S. government moved quickly to create the National Highway Traffic Safety Administration.

In 1975 economist Sam Peltzman published his study "The Effects of Automobile Safety Regulation". He proved that drivers felt safer because of the legislation to protect them, and so they took more risks while driving, which in turn led to more accidents. This is known as the Peltzman effect - the tendency to engage in riskier behaviours when there are measures to keep one safer. Insured people engage in riskier behaviour than those without insurance.

The book also describes how you can act to ensure that you succeed, having avoided mistakes in choosing the initiative.

Clearly every success, no matter how good the initiative, requires having committed, good people, and this is a limited resource. As such it must be curated (and I use that term advisedly.) While good people are a limited resource, there are usually clever enough, committed, and honest people in sufficient supply.

The author identifies four secrets to high voltage scaling. These are "incentives that scale", "revolution at the margins", "quitting is for winners", and "scaling culture".

The first issue, incentives that scale, is indicative of List's method. An airline engaged List when they realised how much fuel could be saved by pilot behaviour. He first researched the best way to do this.

All pilots were reminded of the impact of pilot behaviour on fuel saving. Four groups were given different incentives over seven months. The first group received reports on their fuel efficiency from the previous month. The second received the same reports with the addition of a message encouraging them to reach the personal targets of fuel conservation the company had created for them; the third group received the same reports and encouragement as the second group but were told of a small donation to be made to a charity of their choice in their name. The fourth group received a letter merely notifying them that their fuel usage would be measured to reduce carbon emissions.

Together the pilots saved 7 700 tons of fuel and saved the company $5.37million, a high voltage gain for the airline and the planet. 79% liked this initiative and reported higher job satisfaction compared to the control group. However, the incentive of a donation to a charity in their name, made no difference to how they performed.

Incentives are popularly understood as monetary, in cash or kind. While experimentation might prove this true in your company, a small piece of research, based on the desired improvements the incentive is to drive, will be instructive.

The culture of a company can help or hinder the achievement of company objectives. However, the culture of the company at scale can have vastly different results to that at start-up.

Uber's rough, strongest-man, best-idea-wins culture, was useful when it was a small start-up, but as it grew it became a severe liability. There were accusations of sexism. Seeing a staff member crying at her desk was so common that no-one would even stop by to help. This led to an outrageous number of vacant positions in the company. The founder and CEO Travis Kalanick was forced to resign.

In the conclusion List identifies two key lessons of the book. One: If an enterprise has any weaknesses, they will reveal themselves at scale, often painfully – a warning worth heeding. Two: Scalable ideas and solutions remain our most valuable resource for addressing the world's most urgent problems.

This is an important contribution to the clarification of how to grow, and what will stop you.

Readability      Light --+-+- Serious

Insights           High --+-- Low

Practical          High -+--- Low

*Ian Mann of Gateways consults internationally on strategy and implementation, is the author of 'Strategy that Works', and a public speaker. Views expressed are his own.

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