Oct 10, 2022 31 min read

A Strategy of Small Wins and Small Bets - Typical Mistakes and How to Get it Right

A Strategy of Small Wins and Small Bets - Typical Mistakes and How to Get it Right

In 1984 Karl Weick published a seminal paper titled Small Wins in the American Psychologist Journal. Four decades later, the idea of small wins is fairly common.

But many of the interpretations and implementations of small wins miss critical nuances that Weick highlighted. In fact some of them completely misunderstand a key thrust of his paper.

Weick proposed the idea of complexifying yourself rather than simplifying. And instead his own paper was simplified. People focussed on the “small” and “wins” parts of it while leaving out important details.

What are these critical nuances, what are the common pitfalls, and how can we better position ourselves to benefit from a strategy of small wins?

In this article we cover:


Small Wins as commonly understood

The notion of small wins is fairly common in business literature and elsewhere. There is an element of simplicity and obviousness to the term that belies its effectiveness.

Small gains that accumulate

The most common articulation is how small gains over time lead to big wins. It’s the idea of aggregation of marginal gains made famous by Sir Dave Brailsford who coached the victorious Team Sky in the Tour de France and later popularized in books like Atomic Habits.

The punchline is this: get 1% better everyday and at the end of the year you are 37 times better than where you started. You only have to get 1% better everyday.

The leadership version

You will find some version of the below paragraph in many business books on leadership and change:

"Leaders make change happen. They focus on the small, incremental steps that lead to big changes. They accumulate wins. They challenge the status quo. They are willing to experiment. They learn from mistakes. They break it down into simpler steps, achievable goals, accumulate yesses, celebrate the small wins, give credit, and give and receive feedback. They have a clear plan. They have milestones to make regular progress. They take bold risks."

The problem

There is nothing inherently wrong with any of the above statements. They are mostly true, well meaning, and appeal to our nobler selves. So what’s the problem?

  1. Reality is not as straightforward and well-defined. The above descriptions are a derivative version stripped of the nuances. If it was simply a question of breaking it down into small steps and celebrating, all of us would have climbed the equivalent of Mt Everest by now.
  2. Breaking a big goal down into smaller steps assumes you know how to get there. The concept doesn’t help when your outcomes and the way to get there are unclear and unproven.  In complex domains, often the “successful” path is not known in advance. So technically there is nothing to break down. The steps become obvious only in hindsight.
  3. Getting 1% better everyday assumes you know what to measure and it in fact can be measured. Neither does it account for any regression. Cycling is a complicated domain but it’s relatively easier to isolate cause and effects and measure them over time. Definitely not easy to do so in complex domains like leadership.

Why do we keep falling for these simple definitions? For one, they make it look achievable and sound logical. But what is missing is a discernment for situations when such approaches work and when they don't. This goes down to not understanding the domain in play and the nuances of small wins.

There are some fundamental underlying assumptions that are mistaken.

Oversimplification

In the face of big challenges or seemingly intractable problems there are two typical responses on opposite sides of the spectrum. Neither are helpful.

The first is paralysis. The scale and complexity of the problem prevents us from doing anything about it. We are stuck in inaction.

The massive scale on which social problems are conceived often precludes innovative action because the limits of bounded rationality are exceeded and arousal is raised to dysfunctionally high levels. People often define social problems in ways that overwhelm their ability to do anything about them.

When the magnitude of problems is scaled upward in the interest of mobilizing action, the quality of thought and action declines, because processes such as frustration, arousal, and helplessness are activated.

But often, especially in organizational setups, it leads to the other extreme of oversimplification. It’s the notion that large, complex problems can actually be solved with overwhelming “strategy” from the top down.

In oversimplification, the tendency is to ignore complexities and make the problem more straightforward that it really is. It gets us into action but like hamsters on a wheel we don’t get anywhere. This causes disappointment and disillusionment in the face of what looks like appropriate action.

The focus is on one solution at the expense of other problems being ignored. We end up trying to box the problem into pre-determined solutions.

Many of the common interpretations of small wins fall into this trap of oversimplification. They might get us moving but only on the road to nowhere.

A bias for exploit rather than explore

People and organizations go through phases during their life cycle, each of them dominated by a bias for explore or exploit strategies.

The basic problem confronting an organization is to engage in sufficient exploitation to ensure its current viability and, at the same time, to devote enough energy to exploration to ensure its future viability. Survival requires a balance, and the precise mix of exploitation and exploration that is optimal is hard to specify.

- James G March in The Myopia of Learning

In exploit mode, the focus is on maximizing efficiency, minimizing failures, maximizing output, and on perfecting predictability and repeatability. The domain, its problems and solutions are well defined and proven. The focus is on production and maximizing the "find”.

In contrast, explore situations demand a completely different skill set: an openness and willingness to experiment and fail, pushing the boundaries, innovating, and being prone to errors. The explore approach is unpredictable with no guaranteed returns.

In mature organizations, the tendency is often to lean towards exploit rather than explore. This can be fatal in the long run.

Most common treatments of small wins have an underlying assumption of exploit rather than explore. A strategy of small wins can help correct this imbalance.


What is a strategy of small wins

How did Weick define small wins and what are some key differences from other commonly understood notions? What are the nuances that get missed or even misunderstood and misrepresented?

Concrete outcomes, not speculation

A small win is a concrete, complete, implemented outcome of moderate importance. By itself, one small win may seem unimportant. A series of wins at small but significant tasks, however, reveals a pattern that may attract allies, deter opponents, and lower resistance to subsequent proposals. Small wins are controllable opportunities that produce visible results.

Small wins are tangible in that they have already happened. This is different from planning or speculating wins in the future. They have already been implemented and can be identified only in retrospect. What can be done proactively, is designing experiments that increase the likelihood of small wins.

Most treatments of small wins ignore this fact the fact that small wins become clear only in hindsight. You do not know beforehand if something is going to be a small win or not. The pattern is revealed rather than designed.

Rather than looking into the future and speculating it’s about paying attention to what’s already working and what’s not.

Moderate importance means they are not irrelevant while at the same time they are not so important that the stakes are unnecessarily high causing paralysis and inaction.

Progress can be moving away from bad outcomes

Small wins are opportunistic steps that move in the same general direction but often are noteworthy because they move away from bad conditions.

Progress does not have to be about moving towards success. It can also be about moving away from failures.Often outright problems are easier to work on than a stated idealistic state in the future. Nothing wrong with this, as long as we are paying attention to what’s working.

At any point in time both individuals and organizations have already solved a series of problems to get to where they are today. They can hold clues to future action but often we are not paying attention to them.

They unravel and reveal

Small wins often uncover achievable goals that were not envisioned before wins began to accumulate.

Small wins have their impact through the tangible examples they provide for others, through the allies they attract and the opponents they deter, through doing something tangible, and through creating a context within which change is now seen as possible.

Small wins uncover and reveal previously unseen opportunities and interventions. This is the very nature of complex domains. It’s one reason why small wins tend to build upon each other.

The larger the number of experiments, more chances we have at finding something that works. Ongoing actions uncover properties of the system that were previously unknown or inaccessible. Once found they can be capitalized upon.

They emerge as complete solutions to specific problem sets

Small wins often originate as solutions that single out and define as problems those specific, limited conditions for which they can serve as the complete remedy.

I emphasize the importance of limits for both the solution and the problem to distinguish the solutions of small wins from the larger, more open- ended solutions that define problems more diffusely.

The two keywords here are “emerge” and “limits”. Rather than being outlined upfront, they emerge as solutions. They serve as a complete, self-sufficient remedy for that particular limited condition instead of an overarching solution for the entire problem set.

Notice the emphasis on limits for problems as well as solutions. Something might already be working but we don't recognize it because our problem definition is too large. For a more bounded problem, it might actually be a perfect solution.

They are like experimental probes

Small wins provide information that facilitates learning and adaptation.

Small wins are like miniature experiments that test implicit theories about resistance and opportunity and uncover both resources and barriers that were invisible before the situation was stirred up.

Complex domains are like black boxes without clear inherent properties. The only way to figure it out is to run experiments that reveal the system’s characteristics.

They require fewer preconceptions thus increasing accuracy

Because they are a limited, smaller subset of a larger problem small wins require fewer underlying assumptions and preconceptions. This increases accuracy. Neither is it required to wait for perfect conditions or extensive analysis on every aspect.

They cannot be planned or controlled

Small wins are not directly under our control in terms of intended outcomes and knowing what will work. They emerge from the process of engaging. This makes them fundamentally different from a strategy of “best practices" or going for the “low-hanging fruit” and “easy wins”.

It is important to realize that the next solvable problem seldom coincides with the next “logical” step as judged by a detached observer. Small wins do not combine in a neat, linear, serial form, with each step being a demonstrable step closer to some pre- determined goal.

More common is the circumstance where small wins are scattered and cohere only in the sense that they move in the same general direction or all move away from some deplorable condition.

The future is unknowable and unpredictable and so are small wins. If they were in fact knowable and predictable we wouldn't necessarily need a strategy of small wins.

What we can control instead is the definition of the problem, how we engage with it, the experiments we undertake, and the ability to identify these.

Small wins are emergent

The most counterintuitive aspect of small wins is that they become obvious only in hindsight. This lies at the root of many misunderstandings around small wins. Many versions, even by academics, conflate small wins with taking small steps and planning them upfront. This assumes you know the solution beforehand.

Weick warned against such simplistic takes:

Organizational change involving small wins should not be confused with the idea that one way to accomplish a big task is to break it down into several small steps that are accomplished one by one.
They are not necessarily logical, sequential steps that lead steadily to a clear goal. Success using that kind of progression requires a stable environment, and that’s not what organizations face. Furthermore, small wins often uncover achievable goals that were not envisioned before wins began to accumulate.
Small wins have a fragmentary character driven by opportunism and dynamically changing situations. Small wins stir up settings, which means that each subsequent attempt at another win occurs in a different context.

This emergent nature of small wins means that a detached, all-knowing, top-down approach to strategy coming from the executive suite or an outside consultant should not be the only approach. Real-time adaptations on the front lines are an equally rich source of emergent strategy.

An apt metaphor for this emergent nature of small wins is the difference between wayfinding vs navigating. It’s the difference between knowing before you go vs knowing as you go :

We know as we go, not before we go (ambulatory knowing). . .the world is not ready-made for life to occupy . . . It is rather laid out along paths of movement. . . To find one’s way is to advance along a line of growth, in a world. . .whose future configuration can never be fully known.



- Tim Ingold in The Perception of the Environment

Focus on what’s working

Our standard disposition is to be alert and looking for what’s not working. But what gets equally missed is paying attention to what is in fact working. We are already doing many things right now that are working well and are solutions to a problem set.

Careful plotting of a series of wins to achieve a major change is impossible because conditions do not remain constant. Much of the artfulness in working with small wins lies in identifying, gathering, and labeling several small changes that are present but unnoticed.

Paying attention to what’s working and the exact problem that they are solving can give clues about where to double down. This removes speculation because you are focussing on tangible results. You are scanning for what’s already working instead of focussing on what’s not.

Designing small bets rather than big wins

Going for the big win is a cultural norm. But what is more practical albeit less sexy is focusing on engineering a number of small bets that can turn into small wins eventually leading to a big win.

We do not know beforehand what will work and won’t. Which is where small bets come in. They let you keep playing the game and all the while increasing your chances of success.

The analogy of rifle vs a shotgun captures this nuance:

Reconnoitering a broad new opportunity is a bit like trying to shoot a game bird in a fast-flying flock. If you use a rifle, you’ll almost certainly miss. A rifle is fine if the target is big and slow. If the target is small and swift, a shotgun is your only hope.

Too often a company makes a single, premature bet when confronting a new and under-defined opportunity. The greater the initial uncertainty about which customers will buy, what product configuration is best, what pricing scheme will work and which distribution channels will be most effective, the greater the number of experiments that should be launched.

Make small bets. Make a lot of small bets. Think of your experiments as a portfolio of options.  



- Gary Hamel in Leading the Revolution

Focusing on problem construction rather than resolution

Our default approach tends to be jumping into the deep end of problem solving and focussing on solution formation. But often paying more attention to the process of problem construction and to inputs rather than outcomes can be more useful.

Problem definitions predetermine available solutions. But often problems are assumed as a given and not looked at closely enough. We are too focussed on finding the solution.

Paying more attention to how the problem is constructed can yield better solutions.

The content of appropriate solutions is often implied by the definition of what needs to be solved. To focus on the process of problem definition is to incorporate a more substantial portion of psychology, specifically, its understanding of processes of appraisal, social construction of reality, problem finding, and definition of the situation.

In complex domains, very rarely is the problem obvious and well defined. They tend to be vague and can have multiple interpretations and constructions. And same for solutions.

How a problem is framed sets up the context for ensuing actions or the lack thereof. If problems look unsolvable they don’t warrant any actions.

A classic example of changing the problem definition is the Panama Canal :

The need for new conceptualizations and learning when major changes are involved is highlighted by comparing the French and American efforts to build the Panama Canal …

The French…thought that construction of a canal in Panama would be a similar task to the one they faced in the Suez; namely, all they had to do was build a sea-level ditch and a few locks and that would be that. Not only were they wrong about that, they didn't figure out how to handle yellow fever. Twenty thousand deaths later, the project, its finances, and the French government were a shambles.

The Americans succeeded when they realized that a series of step-locks irrigated by the region 's heavy rains would minimize the problem of landslides into the canal, a problem exacerbated by the French effort to build a sea-level canal through a mountain range covered by jungle soil. The Americans also succeeded when they realized that mosquitoes carried yellow fever, and that the insects were unable to survive very long outside of dense jungle. By cutting back the jungle a few hundred yards the mosquitoes could be kept away from the people working on the project.



- John Bryson in Strategic planning: Big wins and small wins

Getting the small, mundane things consistently right

Small wins are about getting the little things consistently right instead of the one-time record breaking performance. Weick cites the example of the Pittsburgh Steelers who consistently did well against teams with losing records than with winning records.

Against opponents who won more than half of their games, the Steelers won 29 and lost 26, or slightly more than half of these games (53%). However, against opponents with winning percentages below .500, the Steelers' record was 59-1, meaning they won 98% of these games. Thus a professional team renowned for its power got that way by consistently and frequently doing the easy stuff.
Winning teams distinguish themselves by more consistent behavior in games in which their skill advantage should make a difference, a condition that is part of the prototype for a small win. Thus, the best indication of good coaching may be the ability to induce consistent high performance against weak opponents rather than against strong opponents

This notion is consistent with the Daniel Chambliss’s multi-year research about what separates professional and amateur athletes at the highest levels.

Superlative performance is really a confluence of dozens of small skills or activities, each one learned or stumbled upon, which have been carefully drilled into habit and then are fitted together in a synthesized whole. There is nothing extraordinary or superhuman in any one of those actions; only the fact that they are done consistently and correctly, and all together, produce excellence.



- Daniel Chambliss in The Mundanity of Excellence

Small wins can help identify the mundane details that add up to a superlative performance. More importantly, they make winning more mundane and doable.

Qualitative vs qualitative improvements

The best performers don’t necessarily work 10 times harder. Excellence often means doing things differently aka qualitative rather than quantitative.

Small wins are the ideal setup to make qualitative improvements that can then be scaled out and turned into larger scale quantitative improvements.

We need to begin to change from a mindset which says, doing more on a large scale is doing better (quantitative improvements) to a mindset which says doing different on a smaller scale is doing better. It is small qualitative improvements that may produce significant changes.

Small does not mean less in importance, impact, or speed

The term “small” is relative and can be misleading. It does not have to be meaningless, small in impact, or even slow.

The size of wins can be arranged along a continuum from small to large. A small change is either a change in a relatively unimportant variable or a relatively unimportant change in an important variable.

When initiating change there are two key variables:

  1. the size or scale of the change
  2. the depth or importance of the change.

Trying to change both at the same time can be hard if not impossible. What is more feasible is to focus on one dimension. Either take a small change and scale it out or implement a deep change on a limited scale. Small wins help to strike this balance.

Small wins does not mean slow either:

A fast-moving sequence of small changes can more speedily accomplish a drastic alteration of the status quo than can an only infrequent major policy change.

- Charles Lindblom

The psychology of small wins

What makes small wins so effective? What are the key underlying mechanisms that makes them fundamentally different from large initiatives but also more potent and robust?

When a large problem is broken down into a series of small wins, three things happen.

First, the importance of any single win is reduced in the sense that the costs of failure are small and the rewards of success considerable. Second, the size of the demand itself is reduced (e.g., all we need to do is get one city to discipline local polluters). And third, existing skills are perceived as sufficient to deal with the modest demands that will be confronted.

Stress and performance are linked

Stress gets a bad rap but it’s essential to peak performance and in fact aids in performance. But it helps only up to a certain point. Beyond that it starts hurting performance. The Yerkes-Dodson law captures this relationship :

Yerkes- Dodson curve via Wikimedia Commons

Essentially peak performance requires stress. Too little of it and we are not sufficiently aroused. Too much and we go into shut down mode.

But there is another critical distinction between how this curve operates when performing tasks that are well understood vs when tasks are not clear. There is a difference between complex tasks with unknown paths and solutions versus complicated tasks with known paths and previous training.

Yerkes- Dodson curve via Wikimedia Commons

When tasks are clear and well understood, the increased amount of stress actually helps and does not have a detrimental effect.  This explains why often we do best when ”under time pressure”.  In contrast, complex tasks that are not straightforward require operating in the sweet spot where there is enough stress but not too much.

Solving complex problems requires openness to new inputs which increased stress tends to hinder. At sufficiently high levels, stress impairs our mental capacity.

Small Wins enable staying in this sweet spot of enough arousal but not exceeding it:

To keep problem-related arousal at modest intensities, people need to work for small wins. Sometimes problem solving suffers from too little arousal. When people think too much or feel too powerless, issues become depersonalized. This lowers arousal, leading to inactivity or apathetic performance. The prospect of a small win has an immediacy, tangibility, and controllability that could reverse these effects.
A small win reduces importance (“this is no big deal”), reduces demands (“that’s all that needs to be done”), and raises perceived skill levels (“I can do at least that”). When reappraisals of problems take this form, arousal becomes less of a deterrent to solving them.

This is also consistent with the mental state of flow. We work at our best when there is a good match between our skills and what the challenge requires of us. Too little challenge and we are bored. Too much of it and we go into anxiety and shut-down mode.

Flow State- Balancing Skill and Challenge. Via Wikimedia Commons.

Small wins increase hardiness

Why do some folks thrive under stress while others suffer? One reason is the psychological concept of hardiness composed of the three elements of commitment, control, and challenge.

Commitment refers to involvement and a generalized sense of purpose that allows people to impose meaning on things, events, and persons.

Control is the tendency to act and feel as if one can have a definite influence (not the influence) on situations through the exercise of imagination, knowledge, skill, and choice. People with a sense of control tend to experience events as natural outgrowths of their actions rather than as foreign, overwhelming events.

Challenge is the belief that change is an incentive to grow rather than a threat to security. Thus, incongruent events are opportunities rather than disasters.

A strategy of small wins enables conditions that help increase hardiness and resistance to stress.

Deliberate cultivation of a strategy of small wins infuses situations with comprehensible and specific meaning (commitment), reinforces the perception that people can exert some influence over what happens to them (control), and produces changes of manageable size that serve as incentives to expand the repertory of skills (challenge).

Small wins help you to be in control enough to be responsible for them, they have feedback built in given their size and shorter timeframes, and there are clear indicators of failure and success. In contrast, large initiatives that are seemingly  beyond our control struggle to hit these criteria.

They help operate within bounded rationality

Small wins work because they help us operate even with limited information and understanding of a given problem.

Individuals have perceptual as well as information-processing limits, and even though they may intend to act rationally, they can do so only in a limited fashion. This limited fashion consists of acting on the basis of sufficient knowledge rather than complete knowledge (the concept of satisficing); of using simple, unlaborious rules to search for a solution when a problem arises ; and of using shortcuts whenever possible.
Given the reality of bounded rationality , small wins may be effective as much because they are “small” as because they are “wins.” The growing documentation of ways in which people take cognitive shortcuts on larger problems suggests that smaller wins may suffer less distortion from these heuristics.
Arousal is reduced because control and predictability increase. The mere problem is also seen more clearly, which improves the chances that a small, specific solution that fits it will be invented. The resulting small win becomes a visible change in a highly inertial world. The change was made possible because the bounds of rationality were not exceeded.

Increasing risk asymmetry in our favor

Small wins and small bets are an excellent mechanism to implement what Nassim Taleb calls a barbell strategy to limit downside while maximizing upside.

Your strategy is to be as hyperconservative and hyperaggressive as you can be instead of being mildly aggressive or conservative.

Instead of putting your money in “medium risk” investments… you need to put a portion, say 85 to 90 per­ cent, in extremely safe instruments, like Treasury bills. The remaining 10 to 15 percent you put in extremely speculative bets, as leveraged as possible, preferably venture capital-style portfolios. That way you do not depend on errors of risk management; no Black Swan can hurt you at all, beyond your “floor,” the nest egg that you have in maximally safe investments.

Make sure that you have plenty of these small bets; avoid being blinded by the vividness of one single Black Swan. Have as many of these small bets as you can conceivably have.

- Nassim Nicholas Taleb in The Black Swan

They enable other additional wins

Small wins can set off a positive feedback loop and have a snowball effect that leads to even larger wins.

Once a small win has been accomplished, forces are set in motion that favor another small win. When a solution is put in place, the next solvable problem often becomes more visible. This occurs because new allies bring new solutions with them and old opponents change their habits. Additional resources also flow toward winners, which means that slightly larger wins can be attempted.

Small wins help overcome severe loss aversion

When it comes to taking calculated risks the phenomenon of loss aversion can stop us cold. By reducing the size of the risks and limiting downside, small wins help overcome the fear of failure and the negative effects of loss aversion.

They reduce interdependent variables

By limiting the scope and size of the problem, interdependent variables are reduced thus simplifying the system and reducing its complexity.

To gain some control over interdependent problems, people can disconnect the parts so they don’t affect each other. Problems escalate only because they are tied together in a circular fashion and become vicious circles. A system with fewer interdependent events is a simpler system. It is easier to comprehend, easier to control, easier to improve.

They limit generalizations from failure

In complex domains with uncertain outcomes staying in the game to live another day and continuing with efforts is a key determinant of success. Thus compartmentalizing failures becomes an essential skill.

Disconfirmation often leads people to abandon their expectations and adopt skepticism and inaction as inoculation against future setbacks. The important tactic for dealing with the flops implicit in trying for small wins is to localize the disconfirmation of expectations.

After unsuccessful attempts, the default reaction is to generalize failure that seeps into other aspects of our lives. This is even more likely if we attempt something big in an all or nothing bid.

In contrast, an approach of small wins helps isolate losses so we can cope better and continue playing the game to increase the chances of other small wins.

They help increasing the surface area of luck

To view optimism as a duty rather than as something tied to unsteady expectations of success is to position oneself in a sufficient variety of places with sufficient confidence that events may be set in motion that provide substance for that hope.

Beauty is often in the eyes of the beholder when it comes to complex domains. There is no one correct version of reality. The same situation or problem can be interpreted in different ways.

Small wins give us the incentive and the encouragement to interpret reality favorably and notice the nuances that might get missed otherwise.

They attract less opposition/resistance making them politically savvy

Opponents often assume that big effects require big causes, which means that they discount the importance of small wins. Opponents also often assume that attempted solutions cluster. Since small wins are dispersed, they are harder to find and attack than is one big win that is noticed by everyone.

Organizational politics perhaps kill more initiatives than everything else combined. One reason is because most organizations are built around efficiency, reducing failure and maximizing success. Small wins thrive in this environment because they fly under the radar and are also more likely to be efficient and proven.

Incremental steps can be made quickly because they are only incremental. They do not rock the boat, do not stir up the great antagonisms and paralyzing schisms, as do proposals for more drastic change.


- Charles Lindblom in Still Muddling, Not Yet Through

They are self-reinforcing

As humans we are not wired for handling failure. Success, regardless of how small in scope, has a positive loop that feeds on itself which in turn spurs us to take more action.

Small wins may amount to little, but they are after all wins, and wins encourage us to put the most favorable construction on actions and events.
Firm actions couple events. And firm actions are more likely to occur when belief is strongly positive than when it is hesitant, doubtful, or cynical.

Empirical validation, not optimistic speculation

Small wins and small bets are based on empirical validation rather than conjecture which them a solid foundation to attract more resources and build upon.

Jim Collins in Great by Choice calls this strategy bullets before cannonballs:

First, you fire bullets to figure out what’ll work. Then once you have empirical confidence based on the bullets, you concentrate your resources and fire a cannonball. After the cannonball hits, you keep 20 Mile Marching to make the most of your big success.
The history of the 10X companies is like a battlefield pockmarked with craters, and littered with bullets that never hit anything and lodged themselves in the ground. Retrospective accounts tend to focus on only the big cannonballs, giving the false impression that 10X achievements come to those with the guts to go always for the big bet, the huge cannonball. But the historical research evidence presents a different story, a story of dozens of small bullets that thumped into the dirt, punctuated by a handful of cannonballs that smashed into their targets.
If you knew ahead of time which bullets would merit cannonballs, you’d fire only those. But of course, you don’t know, so you need to fire bullets, knowing full well that a number of them will never hit anything.

He goes on to give three characteristics of a bullet:

A bullet is an empirical test aimed at learning what works and that meets three criteria:

1. A bullet is low cost. Note: the size of a bullet grows as the enterprise grows; a cannonball for a $1 million enterprise might be a bullet for a $1 billion enterprise.

2. A bullet is low risk. Note: low risk doesn’t mean high probability of success; low risk means that there are minimal consequences if the bullet goes awry or hits nothing.

3. A bullet is low distraction. Note: this means low distraction for the overall enterprise; it might be very high distraction for one or a few individuals.

A small wins, small bets strategy is an effective way to satisfy all three criteria.


Small wins are essential in complex domains

In addition to the psychological aspects that make small wins effective, their characteristics make them especially suited when operating in complex domains.

How are complex domains different?

Complex vs complicated domains

Complicated domains like cycling while difficult tend to have proven solutions. On the other hand complex domains don’t have any clearly defined solutions or even problems. The snippet below captures this quandary perfectly:

Consider three related tasks, one simple, one complicated, one complex.

Building a pleasure boat can be relatively straightforward—it’s about such things as the ratio of displacement to length. Building an aircraft carrier is far more complicated, involving the coordination of all kinds of subsystems and supply networks. Yet even here the component parts can be readily understood and the necessary behaviors made rather predictable. But a decision on whether or not to deploy that aircraft carrier can be truly complex: Who is to say with any certainty what is the right thing to do, or even what is the best thing under the circumstances?


- Henry Mintzberg, Jonathan Gosling in Five Minds of a Manager

When operating in complex domains, a strategy of small wins is often the most viable strategy. Why are small wins especially suited for complex domains?

They scale down problem environments into smaller controlled microcosms

When people initiate small- scale projects there is less play between cause and effect; local regularities can be created, observed, and trusted; and feedback is immediate and can be used to revise theories. Events cohere and can be observed in their entirety when their scale is reduced.

One aspect that stops us from tackling large projects is the lack of direct cause and effect. Complex domains are replete with paradoxes and causal loops that are invisibly intertwined. The time lag between cause and effects makes it even more unclear. All these factors combine to effectively hide any obvious courses of action.

By scaling down the problem environment, feedback loops are shortened. Cause and effects tend to become more visible and thus seemingly more controllable. You are creating smaller, self-contained microcosms that are more predictable. This in turn helps initiate action.

Since a small win creates a completed outcome, feedback occurs which enables people to see the effects of the action and whether they should repeat it.

They create order

Small wins help create a sense of order around what is often felt as chaos. They help define the undefined. What was before amorphous and unwieldy becomes something people can “wrap their heads around” and helps put their best foot forward.

Having imposed the logic of small wins on a situation cognitively, the person then wades into the situation and acts with persistence, confidence, and forcefulness.

Even though the actions associated with small wins are brief, specific, and localized, they can have a deterministic effect on many problem situations, because those situations are often even less coherent than the actions directed at them.

Small wins induce a degree of certainty that allows greater access to the very resources that can insure more positive outcomes.

They let you take immediate action

In most situations, you can learn a lot faster by doing than by watching, but unfortunately, action also exposes you to more near-term risk than watching. This is because most environments, even dangerously unstable ones, are relatively quiescent unless disturbed. They do not reveal much under normal circumstances.

This creates a bootstrapping conundrum: how can you act meaningfully when you don’t know much about the situation, and do not have relevant, well-developed mental models? The answer… is that you cannot. You must act meaninglessly, or in other words, randomly. 


- Venkatesh Rao in Tempo

Acting “meaninglessly” or “randomly” on a large scale is often not feasible and can be borderline foolish at least in perception. In contrast, a strategy of small wins and small bets let you do just that while limiting downside risk.

Taking action and resulting feedback gives more clues about the properties of the domain we are operating in. Small wins let you take action faster even when you don’t know what’s the best course of action.

People have limited analytical power when they deal with indeterminate, nonroutine settings. Action facilitates learning in nonroutine settings and small wins get people into action more quickly. Small wins help people understand more about uncertain settings.

They are more robust

Uncertainty and change dominate complex domains. Small wins are more resilient to changing conditions because of their size, and being emergent and organic in nature. They are more robust compared to system wide changes and less subject to the vagaries of changing macro conditions.

Weick uses the analogy of a short stack for the robustness of small wins:

Your task is to count out a thousand sheets of paper, while you are subject to periodic interruptions. Each interruption causes you to lose track of the count and forces you to start over.

If you count the thousand as a single sequence, then an interruption could cause you, at worst, to lose a count of as many as 999. If the sheets are put into stacks of 100, however, and each stack remains undisturbed by interruptions, then the worst possible count loss from interruption is 108. That number represents the recounting of the nine stacks of 100 each plus the 99 single sheets. Further, if sheets are first put into stacks of ten, which are then joined into stacks of 100, the worst possible loss from interruption would be 27. That number represents nine stacks of 100 plus nine stacks often plus nine single sheets.

Not only is far less recounting time lost by putting the paper into "subsystems" of tens and hundreds, but the chances of completing the count are vastly higher. 


- Alfred Kuhn, Robert Beam in The logic of organizations.
A series of small wins is also more structurally sound than a large win because small wins are stable building blocks. Small wins are like short stacks. They preserve gains, they cannot unravel, each one requires less coordination to execute, interruptions such as might occur when there is a change in political administration have limited effects, and subparts can be assembled into different configurations.

Consistent with successful entrepreneurship

Entrepreneurship is one of the truest instances of operating in unknown, complex environments with no guarantees of success. The work of professor Saras Sarasvathy at the Darden school of business is one of the few research-backed frameworks that examines what makes entrepreneurs successful.

There are two key concepts in what she calls effectuation:

  1. The bird in hand principle: Work with your means first and let the goals emerge from it instead of the other way around. Don’t wait for the perfect opportunity. Instead start working with what you already have.
  2. The principle of affordable loss: What is the most acceptable downside? Instead of focussing on successful outcomes, figure out what is the potential loss that you can endure and base your decisions accordingly. Thus limiting downside drives your decision making rather than maximizing the upside.

The small wins framework checks off on both these criteria. By paying more attention to what’s already working and emerging from your experiments you are essentially working with your means first.

And given the smaller scale of your experiments and wins, you are capping the downside risk whilst increasing upside potential.

Do what you can, with what you have, where you are.

—Theodore Roosevelt

Examples of Small Wins

Weick cites many examples of small wins in his paper. Below are some interesting ones:

The first strike in space

An example of scaling down problems to more manageable size is an incident that occurred during the Apollo 13 mission when the astronauts staged what some regard as the first strike in space on December 27, 1973. Mission control had been sending more and more directions, corrections, and orders to the astronauts until finally Commander Gerald Carr said, “You have given us too much to do. We’re not going to do a thing until you get your act in better order.”

He then shut off communications for 12 hours and the astronauts spent their day catching up and looking out the windows. They regained control over their circumstance. They did so partly by complicating themselves—an astronaut who both disobeys and obeys mission control is a more complicated individual than one who merely obeys, and partly by simplifying their system—they cut off one whole set of demands and reduced their problems simply to dealing with their own preferences. Their system became simpler because they had fewer demands to accommodate and simpler schedules to follow.

To gain some control over interdependent problems, people can disconnect the parts so they don’t affect each other. Problems escalate only because they are tied together in a circular fashion and become vicious circles. A system with fewer interdependent events is a simpler system. It is easier to comprehend, easier to control, easier to improve.

Small wins disconnect incomprehensible systems such as the Library of Congress, a DuPont factory, EPA, or NASA. Once the system is disconnected, people then focus their attention on specific events that have been stripped out of their context… What is common in instances such as these is that the “mere problem” that people finally end up with becomes manageable, understandable, and controllable by fallible individuals and stays that way until the larger system is reconnected.

Minor improvements vs major advances

Microeconomic study of decreases in production costs of viscose rayon yarn manufacturing at five DuPont plants between 1929 and 1960 demonstrates that minor technical changes—rather than major changes—accounted for over two thirds of the reductions.

A technical change is a change “in the technique of production of given commodities by specific plants, designed to reduce unit production costs”. Major technical changes (e.g., introduction of compensation spinning) differ from minor changes (e.g., introduction of forklift trucks) in time, skill, effort, and expense required to produce them.

The minor technical changes were small improvement inventions, rather than major inventions, made by people familiar with current operations. Experience with the process was crucial, since the very acts of production that created the problems in the first place were also the sources of the minor improvements that could solve the problem. People learned by doing.

Improvers vs inventors

A technological invention is a big step forward in the useful arts. Small steps forward are not given this designation; they are just “minor improvements” in technology. But a succession of many minor improvements add up to a big advance in technology. It is natural that we hail the big, single step forward, while leaving the many small steps all but unnoticed. It is understandable, therefore, that we eulogize the great inventor, while overlooking the small improvers.

Looking backward, however, it is by no means certain that the increase in productivity over a longer period of time is chiefly due to the great inventors and their inventions. It may well be true that the sum total of all minor improvements, each too small to be called an invention, has contributed to the increase in productivity more than the great inventions have.

- Fritz Machlup in The Production and Distribution of Knowledge in the U.S.

Liked this article? You will dig The Managerial Mind on Mondays newsletter. It's free and every edition covers essential frameworks on leadership, careers, and organizations in bite sized form.

Further Reading

A parallel idea to small wins is understanding the mundanity of excellence. Greatness and excellence are about mastering the basics and getting several little things right over long periods of time.

What is under-appreciated is that coping with the mundanity is a bigger challenge than the challenge itself. While the challenge and destination might be glamorous, the process of actually getting there is anything but. I examine this idea in The Mundanity of Excellence - Greatness as Mastering the  Mundane.

One of the best examples of adopting failure and small wins as a strategy in recent times is Jeff Bezos. Scaling failure is one of his key mental models at Amazon. I captured this along with a host of others  in How Bezos thinks- all his frameworks.

References

  1. Small wins: Redefining the scale of social problems by Karl Weick. You can access a free version of the  paper here.
  2. Managing the Unexpected by Karl Weick and Kathleen Sutcliffe.
  3. Organizing on a Global Scale by Karl Weick and Paul W Van Orden.
  4. Little Bets by Peter Sims.
  5. A small wins framework to overcome the evaluation paradox of governing wicked problems by Catrien J.A.M. Termeer & Art Dewulf
  6. Strategic planning: Big wins and small wins by John Bryson.
  7. Leading the Revolution by Gary Hamel.
  8. The Relation of Strength of Stimulus to Rapidity of Habit-Formation by R. M. Yerkes and J. D. Dodson, Journal of Comparative Neurology and Psychology 18 (1908).
  9. Emotionality and the Yerkes-Dodson Law by P. L. Broadhurst in  Journal of Experimental Psychology 54 (1957).
  10. The temporal dynamics model of emotional memory processing by David M Diamond, Adam M Campbell, Collin R Park, Joshua Halonen and Phillip R Zoladz.
  11. The Five Minds of a Manager by Jonathan Gosling and Henry Mintzberg.
  12. Yerkes-Dodson law.
  13. Loss aversion.
  14. The Myopia of Learning by James G March and Daniel A Levinthal.
  15. The logic of organizations by Albert Kuhn, Kuhn, A., & Beam, R. D. (1982).
  16. Tempo by Venkatesh Rao.
  17. Effectuation by Saras Sarasvathy.
  18. Black Swan by Nassim Nicholas Taleb.
  19. Great by Choice by Jim Collins.
  20. The Science of Muddling Through by Charles Lindblom.
  21. Still Muddling, not yet through by Charles Lindblom.
  22. Related and along the same lines is what Sim Sitkin calls a strategy of small losses :
It entails running rapid, modest, mildly risky but informative experiments, knowing full well that many will not succeed. But the idea is that the one or two that do work will sow the seeds for longer-term gains.

A strategy of small losses is not merely a culture of experimentation. It involves actively pursuing risky projects for which there is a strong possibility of failure.

The value of this approach is twofold: First, what is being tried will be distinct from what is already well known, but close enough that you can easily learn from what did not work, fix it, and try again. Second, it builds resilience and confidence; organizations see that they can survive small failures and can achieve success even after encountering a few stumbles. Pursuing small losses also naturally lessens the temptation to go for the big risk.

- Sim Sitkin in Harvard Business Review
Sheril Mathews
After a 20 year stint in various technical/management/leadership positions in the wilds of corporate America I started LS to help leaders & high performers level up their game.
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