Test + Learn: A decision framework to de-risk any business strategy
A powerful method to guide better decisions through iterative experimentation.
In a time of supply chain disruption, new customer behaviors and preferences, and rapid technological change, many organizations are contemplating major strategic shifts. Every company will at some point face a fork in the road. After working within many large firms, I have found that internal innovation teams generally know how to de-risk new ideas for products, services, and experiences, but that is not often the case for most other functions within the organization. I have rarely seen business or corporate strategy teams take the time to experiment with end-users, whether that be internal stakeholders or external customers. Executives do not realize they can also use an innovation methodology to quickly validate different variables and hone in on which winning combination could yield the best results.
Earlier in my career, when I was the brand leader of a lighting company, I was very comfortable de-risking product ideas and creating a product roadmap. However, when it came to making decisions around business strategy, I didn’t know where to start. I leaned on the executive leadership to make these decisions, yet they tended to make business decisions based on what they already knew. The norm for most executives is to make major business decisions for their organizations based on past research or their own years of experience in the field. They believe they lack the adequate time, resources, or capacity to experiment with different possibilities, test out their potential, and leverage the learnings to de-risk key business decisions.
At propelland we use a decision framework that we call Test + Learn to help businesses de-risk strategic decisions and steer any team in the right direction. We define Test + Learn as a methodical process with the following steps:
1) Identify — Lay out different hypotheses and assumptions for a proposed strategy.
2) Prioritize — Narrow the range of possibilities to focus on the most viable options.
3) Experiment — Create working prototypes to test with target audiences.
4) Synthesize — Analyze learnings to validate, modify, or pivot the strategy.
5) Iterate — Repeat the process until you arrive at the desired results.
We have found that a Test + Learn approach frees organizations to depart from the norm and venture outside their comfort zones to collaboratively make better decisions. It enables executive leadership to move beyond their gut feelings; instead of making educated guesses about strategy, they can look to the real people inside and outside of their organizations to quickly and affordably gain valuable insights and identify the best path forward.
Below are three common scenarios in which Test + Learn can be especially valuable to business strategy.
Scenario 1: Testing to uncover customer needs
A leading industrial manufacturing company in North America had an antiquated, manual process for getting product samples to their customers. Already aware of how cumbersome the internal order fulfillment process had become, they had instituted workarounds to minimize friction between the customer service and manufacturing teams. However, they soon discovered that the samples process was now frustrating their customers as well. At the same time, the executive team was seeking to implement a new organization-wide strategy challenging the company to be the easiest manufacturer to do business with.
As the customer-facing team began to create their individual strategies to complement the larger organization-wide strategy, they didn’t know how to prioritize this samples process problem among all the other potential strategies to meet the broader business goal. One hypothesis was that if they fixed both the internal and external samples process, it would increase new sales and customer satisfaction. However, they had many other capital investment initiatives also targeting increased customer satisfaction, such as redesigning the 10-year old website or new product development to fulfill customer needs. How could they compare the impact that a redesigned samples program would have on customer satisfaction, without investing the capital dollars in a full digital design and implementation project?
This is when propelland got involved. We were able to work with this customer facing team to break down their assumptions into smaller pieces and validate them using quick experiments with both the end customers and internal teams. By engaging end customers, we uncovered a wider range of needs beyond the speed and efficiency of the samples process, such as ease of use and access to informative content. Working with the internal teams gave us insight into how to solve the problems around sample creation, inventory management, and customer engagement.
We swiftly built low-resolution prototypes that prioritized user needs and internal best practices, obtained real user feedback, applied these learnings, and repeated the process with more useful, higher-resolution prototypes. One low-res prototype consisted of a “looks like, feels like” website where real customers could click and order samples, and we would move the data in the background — all to validate the customer experience aspects of the process. We took the learnings from this step to create a higher-fidelity prototype, which was a simple working website to validate with both internal and external stakeholders.
By quickly testing and learning with internal stakeholders and end users, the manufacturing company was able to save time and its capital budget. The end product not only improved how easy it was for customers to order and receive samples, it went beyond what the manufacturer believed it could do by increasing internal efficiencies as well. Using Test + Learn, we were able to validate that this new process actually increased sales and customer satisfaction for a seamless, full-service experience.
Scenario 2: Testing to uncover scalable services
Sustainability and circularity are increasingly critical for sneaker and apparel brands. Like many others, Converse was navigating seemingly contradictory goals of supporting a zero-waste future while marketing new products to Gen Z customers. There were some stakeholders inside Converse who thought there had to be a way to boost customers’ brand affinity while enabling them to keep their sneakers longer. Converse wanted to integrate these strategies through all-new in-store experiences and services that were both scalable and profitable, but they needed help aligning internally on where to begin.
There were many ideas and questions within the company about how they could implement these strategies to strengthen customers’ love for the Converse brand while keeping more of their sneakers out of landfills. Could easy in-store customization deepen customers’ emotional connection to their sneakers? Would customers want to upcycle their worn-out sneakers into other products? How much would customers be willing to pay for a service to fix or clean their favorite Converse sneakers?
Converse brought propelland into the discussion because they wanted to know which services and experiences would resonate with their customers without wasting time and money to create and scale one of these ideas. We suggested using the Test + Learn approach to help break down their assumptions into actionable in-store experiments. They had a Converse store in Fitzroy, Australia that they used to promote their newly launched Renew sneaker line made from repurposed scraps, and we decided that this would be a perfect physical lab space for real-world testing.
We helped Converse bring to life Converse Renew Labs, an experimental space for consumers to visit and engage in on-site services such as sneaker cleaning, repair, customization, and upcycling workshops. Taking this Test + Learn approach with real customers helped Converse de-risk their assumptions about how to create in-store services to help customers extend the life of their shoes and increase their emotional connection to the brand, all while reducing post-consumer waste.
Scenario 3: Testing to unite organizational silos
A global creativity software company has transformed itself from a product supplier into a service provider. This large shift created organizational difficulties and increased silos among internal groups, with each silo devising its own solutions to the problems of the larger business. One problem multiple groups were trying to solve was a lack of growth in their cloud services.
The reason for the lack of growth in the cloud business was that a key customer stakeholder — IT administrators in large enterprises — weren’t seeing the value in this cloud service. The internal teams were struggling with how to encourage end-user adoption while ensuring they were equipped with the security capabilities that enterprise administrators expected. Each functional group within the software provider (front-end, back-end, product, and marketing) had a different understanding of the problem and a different solution. The leadership team could not align on which way to proceed.
propelland was brought in to help understand the problem of why administrators were not using this service and visualize possible solutions. We used a Test + Learn approach to align the different internal stakeholders working on this solution. We brought together these multidisciplinary teams from across the organization and began experimenting with the design principles that would make the cloud service more valuable to IT administrators and end-users alike.
The process of testing and iterating these design principles united the teams under a shared understanding of the solution. We could then begin making parts of the solution real, designing specific features and screens in the cloud service adoption process, testing them with the stakeholders, and iterating to create a unified future vision with all teams aligned. The Test + Learn approach enabled our team to slowly iterate the solution, gain support across each of the software company’s internal teams, and create a unified roadmap for what the future of cloud services could be.
These select scenarios show how propelland has utilized the Test + Learn framework to help our clients bring new paths to light. However, they are a fraction of what’s possible with this decision-making strategy. Companies like Starbucks are running in-store tests like its “Borrow-A-Cup” reusable operating model to determine how it can achieve its sustainability goals. Meanwhile in the metaverse, luxury hotel brand CitizenM bought a virtual space to connect with digital avatars and test new “real world” ideas. Equipped with a Test + Learn approach, teams can cut through the noise, move beyond gut feelings, and use real-world data to guide strategic decisions.
At propelland we have helped a wide range of global companies tackle some of these fascinating challenges and convert them into revenue opportunities. Check out our website here for some examples, and please get in touch if you’d like to discuss how we can help your organization capitalize on the latest market shifts.