Most people agree and understand the importance of Experimentation to the survival and viability of their business. When it comes to business experimentation companies don’t know how to build the process and tooling to create an efficient and effective experimentation system.
The first step is to get into “thinking in experiments”, also called having an experimentation mindset. This is a habit which when formed will be a paradigm shift on how you think about new projects, product and basically decisions. I work regularly with business leaders to instill the experimentation mindset into their thinking style and the transformation is profound.
The reason thinking is important is because before we even start communicating with other about any new idea we begin the process internally. It is at that important juncture that we need to apply the mindset.
The experimentation mindset is also an effective de-cluttering method for clearing the mind from unnecessary thoughts, questions and decisions to be made and allow you to focus on the most important ideas.
Common Types of Business Experiments
The term Experiment in today’s digitally active business is typically associated with A/B testing* and CRO (Conversion Rate Optimization)**.
However, business experiments need to have a more holistic view of other parts of the business in addition to the digital assets. A/B tests and CRO (and other methods) are a subset, albeit critical, part of business experiments.
Here is a limited set of business experiments people undertake regularly, put in the context of questions.
Key here is a different way of looking at every one of these questions - a new look including five specific criteria we have identified critical to running successful experiments: expectations, metrics, tracking, success criteria and learning.
But this does not sound very AGILE to me
Yes, we all would like to jump in and build, be agile and lean and figure things out along the way. And that’s fine! Fact is even in agile we are still doing multiple experiments, but we’re not thinking about the details too much. We’re not being disciplined in using or even thinking about the Five criteria and that is a change which will have huge impact on our work ROI.
This is part of the planning and if you look at results, well planned startups perform much better than just-do-it ones. This is one reason why the rate of failure of startups is so high (97%) and the new model used by Startup Studios improves this significantly.
Some structure and planning goes a long way in achieving your ultimate results. Key is to not get so bogged down into the process to the point you don’t build anything. This is where the fallacy of “perfect experiments” will come to haunt us. And the entire reason for conducting experiments is to learn in succession of improvements, not build one perfect experiment which will answer all the questions. That most likely never happen, even in medical and pharma industries where so much rides on experiments.
Keeping Experiments Under Control
One of the main points to consider is that the parameters must be realistic and stay within the budget. Not every startup, for example, is in a position to follow the lead of an innovative giant like Apple. Well funded companies have plenty of resources that allow them to take bigger risks than smaller firms.
But companies of any size can make experiments more seamless and meaningful by using cutting edge software tools. First you have to determine what the right metrics are for measuring performance of experiments, then you need the right tools to implement them. It also helps to work with mentors who understand your industry and market position.
At the core of new ideas is a mix of creative thinking, research and brainstorming. Research will tell you what has or hasn't been done in the past, which exposes market holes. Filling market holes is an effective way to enter an industry with a disruptive presence.
Brainstorming is the pooling of ideas from various team members to arrive at a list of new possibilities, whether they are feasible or not. The next step is to tighten the list to ideas that are practical and have the best chance at shaking up a market.
Using Creativity to Stand Out
During the the last century many corporations shunned creativity as outside their model, even though history repeatedly shows creativity wins when it resonates with the right crowd. The Beatles, for example, didn't become the world's all-time best selling recording act by following trends, as part of their secret was to shatter established trends.
Apple, which based its business model on the Beatles, according to both its iconic leaders Steve Jobs and Tim Cook, went on to become one of the most successful companies of all time.
In the late 90s Apple used billboards and TV commercials of John and Yoko with the slogan "Think Different." The campaign helped the tech company associate with the concepts of innovation and synergism. It was a huge success, as the company won an Emmy for Best Commercial of 1998. Small companies may not have the funds to afford such marketing, but a key takeaway is that it's better to stand out than blend in.
Creative thinking is at the core of many business aspects, from designing a logo (the company's perceived identity) to various stages of branding and marketing. According to top electric car manufacturer Telsa's CEO Elon Musk, the most important skill every entrepreneur needs is to ask the right question. He believes questions are often harder to come up with than answers. He gets his inspiration from the shower, dreams and friends.
Do you have an experimentation mechanism for yourself and your company? If not it would serve you well if you gave it a thought and learned more about business experimentation.
And if you're serious about getting an experimentation culture in your organization check out our new product Experinator.