Why the C-suite isn’t interested in experimentation and how you could change it

Business experiments are on the rise…

But it’s not likely that the current opinion-driven culture of most organisations will change any time soon. I am hoping that together we can improve the chances of the acceptance of the Discipline of Business Experimentation.

With my new job I was lucky to interview a dozen C-suite executives and high level analysts the last weeks. (mostly energy industry execs, but ideas apply to more industries) It was my task to understand their thinking and offer them inspiration to do their job better. This really opened my eyes… when we spoke I often couldn’t see how running experiments would be of any serious use to them. After a while it began to make more sense… And below is a reflection of how I think we could interest the highest management in becoming ambassadors of experimentation.

Experiments to make innovation happen faster

There are very few industries that are not being transformed by digitalisation, and this often means these industries fear that they will be wiped out in the nearby future by disruptive innovation. Whether this is the new Uber for Energy or the AirBnB for Finance, companies that know how to use the newest technology, will use it to their advantage and change the market completely. At least this is what the C-suite execs and analysts think that I spoke to.

There are 3 strategies that they spoke about to counter these possible disruptors. 1. Using new technology to improve your operational process and cut costs. 2. Using new technology to get closer to their customer and increase satisfaction and existing revenue. 3. Do some disruptive innovation of yourself. You come up with totally new business models that create new revenue streams. Where 1 and 2 are doable within the existing organisation, 3 seemed to be next to be impossible in the same structure (even not after you appoint a Chief Innovation Officer), and that’s why often business units are created called New Ventures & Innovation or something that rhymes with that.

When experiments compete with co-creation & eco-system

Imagine you are not really C-level anymore. You are now only responsible for running the new business unit New Ventures and Innovation, you have XX millions to burn. What does your innovation process looks like?

You build a loosely coupled network of smart people and companies around your business unit. You invest in startups, you buy some and together with other companies you co-create like crazy. Is this the moment that experimentation comes in? Is it completely clear running experiments will be best?

It might, more and more of execs that run these innovative business units appreciate the lean startup method. Through launching a minimal viable product they test assumptions before they create more complex propositions.

I don’t know how you guys feel about ideas… but in general I do think a Testable Idea is Better than a Good Idea. Co-creation, as in together with a startup or other organisation seems to fit this approach. But Co-creation as in Co-design is in any case more qualitative and often just more fuzzy. I don’t know how bad it really is when fuzzy-driven innovation becomes hot again. I do know it would really piss me off.

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IMHO Business Experiments is the way forward

You have some very successful businesses that have a extreme data-driven culture. I loved working for Booking.com, especially because of my mentor and good friend Mats Einarsen (thank you Mats leading star of the business experimentation discipline), where I encountered the least opinions and also not ignorant managers for whom there was no need because teams of three people showed their productivity by creating and deploying an experiment every day.

With Booking.com there weren’t many incentives to build on the learnings of the other thousands of experiments, most probably because they have a cycle of delivering experiments on a daily basis. Even the most data-driven companies can become better at it. But let’s not go there, it would be already great if more companies become like Booking.com. Right?

But wait? Can we clearly say data-driven organisations outperform opinion-driven ones? Booking.com is very successful. But so is Apple. I didn’t read any of the research on this topic, it would be nice to have the numbers. This would be very important, we could use those numbers to persuade the C-suite.

We need to push our discipline forward, more evidence needed, but also more buzz

One of the best things I have read lately is by Colin McFarland. He’s being honest about experimentation and talks about common pitfalls. He is pushing the field forward, with the help of some of other giants in the industry (Ron Kohavi (Microsoft), Ya Xu (LinkedIn) and Ben Dressler (Spotify). It is not an easy discipline to promote, it directly affects people’s fear of failure and when done properly experimentation can make the most genius exec very humble. Very humble indeed.

We need more buzz to get awareness. Help your field out and share Colin’s blog post with your network, your colleagues, your pets and loved ones. And start sharing your experiences as well.

Next to that we could use some better PR for Experimentation; framing and spinning is needed to get the first few innovative execs as ambassadors and after that the rest will follow the idea. This not that easily testable idea of experimentation as better way to do business. When we want to do serious experiments, we need serious commitment. C-level commitment.

For now, my gut feeling is that they will want to listen to why “Experiments make innovation happen faster…” Before disruptors wipe them out.

What I exactly mean by “Experiments to make innovation happen faster”? That’s for another time.

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Originally published at us12.campaign-archive2.com.