Friday, February 18, 2011

Forget fast follower, become a fast discoverer with experimentation

One data point is interesting, two points define a line and three points are a trend.  Today in my Twitter feed were several articles and stories about the interrelationship between innovation and experiments.  When you see a trend, especially one that makes sense, it's important to call it out, discuss it and unpack it.

In MIT's Management Review, Michael Schrage is interviewed, primarily about his thinking on innovation and information technology, yet he ends up talking a lot about experimentation.  Schrage points out that the cost of experimenting has fallen dramatically, yet few firms use rapid, low cost experimentation effectively, and lays the blame for that fact at the feet of our educational system, which cranks out MBAs who demand deep quantitative analysis.  Schrage makes some other good points, especially about the cost of discovery.  At one time it was expensive for P&G to film how consumers used Tide in their laundry.  Now, they can simply ask moms and dads to send in video clips of their laundry practices.  The consumers can, and will, do the work for the company.  Here's a low cost experiment.  Send 50 consumers a video camera and a new product.  Ask them in exchange for the use of the new product to record their use and experiences with the new product.  Ethnography for free!

But I digress, since this was intended to be a post about experimentation.  In the Financial Times there's a blog post entitled Why don't we experiment.  In the post the article quotes Dan Ariely as noting there are two significant barriers for experimentation:  short term costs for long term gains, which for some reason seems a difficult trade-off, and the value we place on the insight and expertise of experts over our own experimentation and testing.  Far too frequently we choose to purchase answers from "experts" rather than simply trying and discovering ourselves.

Third, Michael Schrage (him again) interviews the head of Caesar's casino about the importance of experimentation and how it should be conducted.  At Caesar's they expect any new idea to be incorporated as part of an experiment, but a rigorous experiment including a control group. 

Experimentation is very intertwined with innovation.  Both require a hypothesis - if we do X, then we will get benefit Y.  Both require a lot of work for uncertain outcomes.  Both require rigor and careful planning.  And both are consistently avoided by turning to "experts" who provide an answer, which takes less time and exposes the executive to less risk.  After all, if the idea fails and the expert supported it, it can't be the executive's fault!

Good innovators are good experimenters.  The converse is also true. Firms that don't innovate don't experiment.  They wait for others to create a market and exercise a "fast follower" mentality.  Which would be a fine strategy, except that the vast majority of firms fashion themselves as fast followers, and few really are.

Why not reposition your firm as a "fast discoverer" using rapid, low cost experimentation.  Then, you won't have to pay experts, you will be the expert.
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posted by Jeffrey Phillips at 7:24 AM

5 Comments:

Blogger Wiki said...

This comment has been removed by the author.

10:30 PM  
Blogger Wiki said...

The concept is nice but I firmly believe it works well with an entrepreneur experimenting in his own setup.
In service industry boxed with lots of executives, however, the rule of thumb is "do more with less". With the rapid changes market go through everyday, the rush is already on to follow up / chase.
And then when the executive knows that whenever she comes out with a bright idea after failing, say "n" number of times, even before she gets the pat on her back, the idea is copied and is already in use by her competitors.
But then, yes, if all starts following, who innovate? That can really stall the human progress.

So should it be not discover with cautious experimentation? Ensure you keep innovating but even before that, ensure your experiments do not fail. A pessimist attitude !! But how often do we have bosses patting our back for a failed experiment and wishing us luck for another. We are just shown the door immediately !! .. something which is really a detrimental factor in trying to innovate in this fast paced market.
People have stopped innovating, the new mantra is "EVOLVING" !!

10:36 PM  
Blogger felicity said...

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7:24 PM  
Blogger better ck said...

Thanks a lot for this time sharing of innovation about FORGET FAST FOLLOWER, BECOME A FAST DISCOVERER WITH EXPERIMENTATION. This is really the best website about innovation i have ever read.
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2:11 AM  
Blogger realbadman said...

I agree that With the rapid changes market go through everyday, the rush is already on to follow up / chase.
And then when the executive knows that whenever she comes out with a bright idea for safemedsafter failing, say "n" number of times, even before she gets the pat on her back, the idea is copied and is already in use by her competitors.

9:26 AM  

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