Experimentation principles

Empower employees to rapidly test, learn, and iterate in response to market changes

As the pace of industrial change accelerates, forward-thinking organizations are developing capabilities to respond in real-time. They empower employees throughout the organization to test, learn, and iterate rapidly. Decentralized workflows, backed by clear and proven principles, enable organizations to take smart action far quicker than command-and-control bureaucracies.

The most innovative teams in the world use our on-demand insights platform, so we have a front row seat to best-in-class processes and capabilities. From our observations and applied experience, here are the necessary experimentation principles for company culture and operations.

Experimentation culture

Live in the future. Every innovation follows an adoption curve, so aspiring innovators should themselves be early adopters of new and diverse technologies. Through pattern recognition, early adopters tend to develop foresight and intuition. They are keen at distinguishing between fads and legitimate disruptors, and ultimately at experimenting toward becoming the latter.

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Begin with an aspirational vision and work backwards. Before experimenting, frame the aspirational vision for your underlying assumption — what does the best possible form of success look like? Only begin experimenting after determining that success would be an exciting reality for your business and prospective customers. An aspirational vision also operates as a north star and guard rail, keeping stakeholders on the same page for ongoing experiments and decisions.

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Think in assumptions and default to testing. Given how quickly underlying consumer preferences and expectations change, there are few reliable constants. The best companies understand that yesterday’s truths have become today’s assumptions which may be tomorrow’s experiments. Operating in terms of assumptions and hypotheses, rather than facts and certainty, creates an organization-wide bias toward rapid experimentation and iteration.

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Slaughter sacred cows even if it makes you a cannibal. Incentives generally dictate behavior. If there is a leader or team responsible for optimizing a product’s key performance indicators, then there is de facto a constituency dedicated to prolonging that product’s lifespan regardless of its value at any time compared to other opportunities that the company could explore. Tying anyone’s compensation too closely to perpetuating short-term growth or the status quo inhibits an organization’s ability to innovate. A substantial number of employees and teams should be incentivized to care about future opportunities and customers, even if it means forgoing present ones.

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Set external expectations to protect your reputation. One of the realities of experimenting in a fast-paced world is that seemingly exciting initiatives won’t garner enough positive market feedback to justify continuation. But frequently sunsetting products and services without explanation penalizes early adopters and risks ruining your brand’s reputation. It’s important to set expectations clearly — by using terms like ‘pilots’ and ‘betas’ — and predetermine an exit plan so that you don’t accumulate debt from failed experiments.

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Experimentation operations

Surface problems from the trenches. Research and development teams may be tasked with innovation and value creation, but they typically aren’t the closest to the customer day-to-day. Sourcing, evaluating, and collaborating on ideas from and with customer-facing teams is the best way to stay focused on real problems and keep pace with the market. Further, doing so engages employees in a meaningful way and encourages them to keep their ears open for additional opportunities.

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Set internal success criteria and fail elegantly. Most startups and products fail, wasting a significant amount of resources in the process. Experimentation should provide an opportunity to pivot or fail elegantly and inexpensively, and should therefore be looked at quite positively from an ROI perspective. Experiment with fluid but clear success criteria, and place value both on validating opportunities and invalidating them in order to keep incentives aligned.

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Hurry reversible decisions, but sleep on irreversible decisions. Experiments de-risk decisions but even within data-rich environments, most business decisions are made with some degree of uncertainty. Since speed-to-market is a competitive advantage, organizations should embrace high-velocity decision-making when it’s possible to pivot and course-correct. That means distinguishing between reversible and irreversible decisions, and only conducting extensive and thorough research for the latter.

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Facilitate adoption and seek criticism. Rapid experimentation requires seamless access to prospective customers, especially those with the acute pain point being addressed. Having ongoing access to such an audience means either having an on-demand insights capability (like Alpha) or building a custom panel. Encourage early adoption with early and discounted access as well as collaborative innovation. In addition to driving participation, it’s imperative to seek honest criticism via anonymous feedback and generally separating the innovator from the experimentation process.

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Do things that don’t scale but be prepared to scale. Siloing innovation activities away from scaling activities is widespread yet entirely counter-productive. Validating growth opportunities may at first require doing things that don’t scale, but such initiatives are only worthwhile if there’s an alignment with systematic processes for scaling afterward.

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Building The Future is the official publication of Alpha, the on-demand insights platform for data-driven decision-making. If you’re an entrepreneur, intrapreneur, author, or consultant working on a better future and want to share insights in our publication, consider reaching out to us here or by applying to Alpha Betas.