Experimentation: A Scary, Savvy Business Strategy
Does the word “experimentation” in a business context sense freak you out? If so, you’re not alone. Experiments in the corporate or social sector can make people feel uneasy.
In the simplest terms, an experiment is a novel way of doing research that puts something tangible but scrappy in the hands of users to get insight. The approach can be used to assess viability, desirability or effectiveness of a new offering, feature or experience. Some of the most forward thinking brands in the world use this approach. I have been fortunate to collaborate with Nike across multiple projects in which experiments played a crucial role; testing paper prototypes for sneaker customization; using clickable prototypes for a new 1:1 clienteling service; developing a mock store in a warehouse filled with foam fixtures to test foot traffic, space design and an overall experience for a new fitting room and shoe trial experience.
The corporate sector is not alone in considering this type of work. According to James Anderson in SSIR, “When the mayors participating in the 2023 class of the Bloomberg Harvard City Leadership Initiative were asked what they’d most like to improve about their organizations, their top answer was “innovation and experimentation”—ahead of more traditional goals like improving government performance and customer service for residents.”
So why is this concept anxiety-inducing and what’s standing in the way? In most cases, people have an innate aversion to risk, weighing small failures more than the learnings that come out of it. In other cases, company culture prioritizes short-term wins and employees don’t feel accountable for the long-term.
In my opinion, there are some key reasons that experiments are beneficial for businesses, startups and the social sector:
1. ** Mitigating Risk**: Experiments allow organizations to assess the feasibility of new ideas with reduced risk and less investment. It's more efficient to fail fast and learn from mistakes in the early stages than later when significant investments have been made. This is especially important in the nonprofit sector where limited resources must be used wisely. Larger companies can explore new markets or technologies without committing significant resources. Startups can use seed funding more effectively with experiments rather than trying to “perfect” an offering with costly engineering and development upfront.
2. **Customer-Centric Approach**: Experiments put the customer at the center of the development process. By gathering user feedback and observing behavior, businesses can align their products and services more closely with customer needs and preferences. Nonprofits can use experiments to engage their communities and stakeholders.
3. **Data-Driven Decision Making**: Experiments generate valuable data that informs decision making. By collecting and analyzing data from experiments, businesses can make informed choices about which features to prioritize, which markets to enter, and which strategies to pursue, ultimately improving their bottom line. Nonprofits can use experimental data to determine which programs are most effective in reaching their goals, to advocate for policy changes or for additional resources.
4. **Blueprint for Scale**: Once successful experiments are identified and refinements have been made, organizations can scale up the initiatives to reach more people, or have a broader impact on society.
5. **Cultivating a Culture of Innovation**: Experimentation fosters a culture of innovation within an organization. It encourages employees to think creatively, take calculated risks, learning from both successes and failures. This can be transformative for a company's long-term success.
In conclusion, for startups, large companies and nonprofits, experiments are essential tools for improving programs, products and services. They offer risk management, a competitive edge and higher impact for social missions. Embracing a culture of experimentation can ultimately lead to an empowered and bold workforce and the change we want to see in the world.
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At Ideas and Experiments, we help clients experiment in smart and successful ways. If you’re interested in testing opportunities, let’s chat!