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''The value of moonshot thinking or dealing with impossible challenges''
Moonshot thinking aims to find disruptive solutions for impossible challenges. Real innovation inside companies is the sort that enables exponential growth – only possible by resetting the operating system, i.e. changing how it works and thinks.
On November 30th, ESADE Madrid hosted a talk in its Refresher Programme series entitled ‘Moonshot thinking for business innovation’ by Iván Bofarull (Lic&MBA 97), director of Insights & New Strategic Initiatives at ESADE and academic collaborator in Executive Education programmes.
This talk addressed moonshot thinking, a way of working in companies that aim to multiply their corporate results by ten. “A 10% increase in results is easy to achieve by applying several measures, but exponential growth, i.e. a ten-fold increase in results, calls for disruptive innovation, Bofarull explained.
This line of thought dates back to the 1960s, when Kennedy backed the impossible challenge of putting a man on the moon and achieved the unthinkable. To make great things happen, everyone in the project must believe in it and have complete faith in their own abilities.
One concept became clear during the talk: companies that are successful today never stop learning. They are like children with an open mind. A comparison of the most capitalized companies in the world in 2006 and 2017 reveals that those in 2006 were well-established companies with a proven track record, “mature or “old companies in terms of their level of learning. The most capitalised companies in 2017, on the other hand, are companies with a child’s age, they are like children or babies learning constantly. Such companies include Apple, Google, Facebook and Amazon, and their common denominator is the ability to grow exponentially as opposed to companies that grow linearly.
Job to be done
One of the concepts discussed in the greatest depth during the talk was the “job to be done, i.e. what consumers expect a product to do or the solution they expect a product to provide. This is a key concept when designing innovative products and services, because a company that asks customers what tasks they have to do, what results they want to achieve and what limitations they have, will come up with innovative products and services that fulfil these desires, i.e. tailor-made goods and services.
Consumers do not buy goods and services, they buy goods and services to do a job for them. The ‘job to be done’ approach makes it possible to solve important emotional and functional problems for our consumers. “For example, people do not always buy a car just to take them from one place to another, but also as a way of expressing their lifestyle or personality. This was obvious a few years ago in BMW’s “Do you like to drive? campaign which showed brand users looking for a vehicle that would give them the freedom to enjoy driving. For many American families, however, the “job to be done is social interaction in the car, i.e. they spend several hours a day in the car with their family and need a vehicle where they are as comfortable as in their sitting room at home.
A customer who only needs a car to get from one place to another probably solves this problem in a different way – hence the growth of platforms such as Uber and the like, now worth more than traditional car manufacturers. These platforms solve a problem and can grow exponentially.
“The new exponential value is usually rethought by new players so we must become companies continuously learning everything. This means we must change our operating system and how we work and connect things, said Bofarull.
In forthcoming years, all companies will become business schools and academic institutions because they will have to constantly learn to change their operating system.
Barriers to disruptive innovation
What happens in an established company that tries to change things? Resistance. The participants in the moonshot thinking conference together listed the factors that resist disruptive innovation: people, hierarchies, processes, norms, short-term objectives, status quo, etc.
When a company wants to suggest something very innovative and change its cuore, opposing narratives that hinder innovation emerge, such as:
- The risk of cannibalizing the core business.
- Stranded costs: “How can we invest in X if we have already spent a lot on Y? We have to write off what we already have.
- Tradition: “It’s always been done this way or “This is how things are done here. These are beliefs that hinder innovation.
According to the ESADE collaborator, the combination of all these factors creates market myopia inside companies. “One example is Kodak. A manager in this company invented the digital camera, but they said it would cannibalize traditional photography and refused to develop it. In the end, Kodak went bust because it was unable to adapt.
To reset its operating system, a company needs certain tools or skills including moonshot thinking. This is a way of rethinking its business from scratch in order to grow exponentially. Moonshot thinking transforms negativity and fears into great opportunities. It is based on passion, because without passion, it is easy to give up. Another example mentioned during the talk was Waymo, the Google brand making self-drive cars. Its market value is very high although it has not yet sold any cars. Why? Because people know it is reinventing the rules of the car industry – something greatly appreciated by the markets.
Against this backdrop, after the talk, the advantages of the programme designed by ESADE in conjunction with the Singularity University were explained. It consists of five days in Silicon Valley to boost moonshot thinking. Participants are taught the characteristics of exponential disruptive technologies with the potential to move the goal posts of different industries; and how to “land their disruptive ideas; and they do an exercise that enables each participant to apply this thinking to their organization.
Members may bring a guest
Non members: €120
See you there!
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