Dan Ariely offers an interesting piece in the April, 2010 Harvard Business Review on “Why Businesses Don’t Experiment.” In this brief essay (only available for a fee as of this writing), he offers two main reasons for the lack of experimentation:
“…experiments require short-term losses for long-term gains. Companies and people are notoriously bad at making those trade-offs.”
“Second, there’s the false sense of security that heeding experts provides. When we pay consultants, we get an answer from them and not a list of experiments to conduct. We tend to value answers over questions.”
I’ve certainly observed the impediments to experimentation that Ariely highlights and a good many more. In some organizations, there are so many systemic and cultural disincentives to experimentation that it’s a wonder that executives and employees are able to decide what to have for lunch today that was different from yesterday.
In spite of the natural inertia towards the sure thing or the shortcut (external advice in lieu of more risky and time-consuming experimentation), I’ll offer my few cents worth on why and how you and your firm can use experimentation as a means of building value and confounding competitors.
Why Experimentation is Healthy for Your Business
- Great strategies don’t spontaneously generate, take root and grow on their own, based on the magical beans provided through a consultant’s input. Value creating ideas and approaches are most often the output of enlightened trial and error…and sometimes unenlightened trial or just plain fortunate errors.
- If your firm and your teams are not experimenting, your firm is slowly choking off the supply of future innovation. Most often, the deteriorating quality of ideas that turn into valuable offerings is met with what Jim Collins describes as the “Undisciplined Pursuit of More.” This flailing about is an attempt to rapidly make up for the dearth of good ideas created by a rigid culture and leadership. Instead of a pipeline of ideas, firms grasp at straws and all ideas can be rationalized as potentially good.
- Teams that fail together in pursuit of experimentation stand a better chance of succeeding in the end. While that might seem like a “call to failure,” it is intended as a call to learning.
- Facilitating a culture of experimentation is a great way of facilitating a culture change away from command and control leadership, particularly if experimenters are given the opportunity to own ideas. It’s a great sign when a firm embraces reality that top leaders aren’t there because they have the best ideas.
Rethink Everything to Stimulate Experimentation
The obvious areas for experimenting include your products and services and tweaking with various elements of your marketing mix. Before you go too far down the experimentation path however, remember that your business is a system and virtually every part of how and what you do is worth rethinking.
Other opportunities for experimentation include: organizational structure, project approach, strategy formation and execution, talent development, cross-functional collaboration, promotional approaches, engaging with customers, thought-leadership strategies and so many others that don’t involve impacting your product.
7 Ideas to Stimulate Experimentation in Your Organization:
1. Build the expectation into your culture that experimentation is part of the job. Think 3M, Google and others that expect their employees to spend some significant amount of their time on items unrelated to their core job or their current task list. Part of successfully pulling this off is genuinely providing the time and supporting resources.
2. Create systems for experimenters to turn ideas into processes, offerings and approaches. This of course requires you to ensure that the decision-making process is uncomplicated or made less complicated and that when the time is right, there is money and support available for next steps.
3. Put your top leaders on the hook for fostering innovation by monitoring over time how their efforts contribute to innovations that make money, cut costs or differentiate.
4. Quit emulating your competitors. Too many firms suffer from competitor envy and move through time monitoring and reacting. I’m all for a healthy amount of monitoring and improving upon or outflanking, but the cases of pure raw emulation that I’ve seen are remarkably counterproductive and unprofitable.
5. Embrace social media! If you are blocking access to social media, wake-up and recognize that there has never been a more fertile source of innovation than the discussions being shared and ideas emerging on Twitter and via blogs. And the ability to research, experiment and gain insights from specific audiences in near real-time fashion is unparalleled. It’s time to knock down the social media firewall and free your people to think and engage!
6. Recognize that for some offerings and processes, the best approach to innovation might come through external collaboration efforts. Your partners in the value chain are looking for opportunities to experiment as well, and these types of collaborative relationships can be fertile grounds for experimentation and innovation. Having said that, be aware that making these work is a nontrivial task.
7. Build a new hero class in your culture, where experimenters and experiments that yield successful outcomes are celebrated and become part of the folklore of the firm. Be careful not to trivialize this issue with dumb employee or team of the month awards. Use some finesse and create heroes. And find ways to remind people that everyone is invited into that club…all they need to do is earn their way in on their own or as part of a team.
The Bottom-Line for Now
When walking into a client organization, one of the areas that I assess is how rich or poor the culture is when it comes to experimentation. Healthy cultures and winning organizations encourage experimentation and the opposite generally holds true.
And when seeking to facilitate a culture change, remember that these things don’t happen as a result of an executive order, they happen over time with tons of support, reinforcement and a constant refueling of the pioneer spirit.
Now, ask yourself: what are your people doing today that may just build a new future for your organization?