Building a Business Culture That Supports Experimentation
This post is Part 2 of my planned three-part series on TI, here’s the link to Part 1 in case you are interested. So, let’s start with a question. Why don’t organizations experiment more often? Usually, it’s simply a lack of confidence within that organization’s people to take on new initiatives. And it’s these initiatives that will add value to their business through the systematic capture of valuable Talent Intelligence.
Gary Hamel has led decades of research into bureaucracy in companies and some of his most recent research found that only 10% of workers felt empowered to experiment and change their working processes. It’s easy to argue that there are always other things that are more important or urgent, but if you think like an owner, you’ll realize there is very little that is more important than creating value for the business.
Thinking Differently About Failure
Beyond the confidence to experiment, fear of failure is the next hurdle to overcome. Take this HBR Cold Call Podcast Episode on Booking.com for example, in which Professor Stefan Thomke discusses the Business Case he wrote in HBR about “Building a Culture of Experimentation” and how past experience and intuition can be misleading when launching an innovative new product, service, or process.
In its early days, Booking.com adopted the same approach as every other operator in the travel industry — despite trying to differentiate themselves. It wasn’t until the company realized that they would be wrong more often than they would be right that they turned a corner and came to the conclusion that successes are simply revised mistakes. Adopting a different attitude towards the risks associated with experimentation requires you to think differently about the term failure. The scientific community accepts that iterating on each unsuccessful experiment brings you one step closer to where you want to be. When you frame it this way, the only difference between success and failure is taking action.
Moonshot Culture in the Tech Industry
Jeff Bezos has stated one of his missions at Amazon is to build the world’s largest laboratory. Bezos encourages his leaders to think differently and to pay attention to competitors, but to obsess over customers. Elon Musk and SpaceX are literally shooting for the moon. The “Moonshot” culture is ingrained in the culture of companies in the technology industry. Tech businesses regularly make massive financial bets with the knowledge that maybe 1% of these experiments will achieve any return on their investment. But the fact that nobody can accurately predict the future to work out what will be useful doesn’t stop them from trying.
The Case for Experimentation
The advantage with most industries is that we’re not talking about a considerable downside or cost to achieve a positive outcome, but being targeted in your actions and setting realistic ROI objectives is critical for any experiment. The math around building powerful business insights by collecting intelligence on the networks that you operate in is pretty compelling:
10 people on calls or in meetings talk to x10 people a day x5 days a week and collect x2 pieces of data during each interaction.
The sort of information gathering you can extract value from is already happening and therefore “costs” you almost nothing — you just need to focus that activity around your experiments. Imagine what sort of patterns you might be able to spot if your business is being fed by fifty thousand nuggets of information per year.
Freedom to Experiment
It is no coincidence that amongst our clients, those that have the highest levels of user adoption are those who report that they have the most freedom to experiment. And so releasing value from the platform you are using is not an accident. The firms who experiment most have taken deliberate action to task someone (usually a group of users from all levels across the business) with driving adoption and improving the value that the business extracts from the systems they are using. This won’t happen overnight; it may take time to achieve a return on your investment, and it takes deliberate work to form the habits to make your practice consistent. But one Moonshot succeeding is all you need. So here are some suggestions:
- Think like an owner; identify the value you can bring to the business through your efforts
- Don’t let “perfect” be the enemy of “good,” and don’t change too much too quickly
- Often, the obvious ideas will outperform the truly “creative” new solutions
- Embrace failure in your experiments, but give them enough time to indicate whether they are likely to yield results
- Agree that nothing needs to be permanent and kill experiments that are not achieving the desired outcome
- Above all, take action. Adventures lie on the other side of yes.
There are people who prefer to say yes. And there are people who prefer to say no. Those who say yes are rewarded by the adventures they have, those that say no are rewarded by the safety they attain. — Keith Johnstone