Tools and Techniques for Business Experimentation
Maximizing Speed and Success of Product, Service and Technology Development
Letting organizations experiment extensively may feel like giving up control of a key part of the strategy formulation process. After all, if you were to let any part of your organization try out new ideas whenever they arose, it might be difficult to rein people back in when the time came to formulate a single business strategy. However, this avenue of thinking is wrong for these times. Innovation must become a core competency for survival and success now and in the future. Innovation from anywhere in the company is a good thing. Experimentation is the generator and confirmation of strategies, much like researchers use case studies as generators of hypotheses and illustrations of conclusions.
The challenge for senior managers is to set up an environment where experimentation can flourish and at the same time build processes and controls to insure that results are measured and resources aren't squandered. This is certainly a large challenge and a delicate balance; however, business experimentation may well be the key to producing the organic growth your company needs to remain competitive.
Business experimentation is both a process and a discipline used to develop systematic innovation and improvement. We define business experimentation as a structured, controlled, cost-effective, iterative approach to learning about the potential success or failure of a new product, service or process. Business experiments succeed when:
- There is clear experimental design or protocol.
- Learning objectives are stated up front and serve as a control mechanism.
- Simulations minimize the expenditure of resources.
- The process includes iterations which build on the knowledge gained in each, and failure is an acceptable outcome of an iteration.
As markets become more complex and business options multiply, the ability to experiment continuously becomes key to business change and business success. If you are already experimenting regularly, we urge you to hone your expertise, make experimentation a core competence organization-wide, and extend more of your experiments into the marketplace in partnership with customers. If business experimentation is new or uncommon in your organization, we urge you to start now and learn how to make experimentation work for your business.
This Re.sults report describes the challenges to business experimentation, especially the potential barriers erected by the "hidden logic" of an organization's behavior and culture. It also provides examples of how IT can use business experimentation within its own work and looks at how the IT organization can support and encourage experimentation across the business.