In today’s business world, executives and managers need to employ more innovative plans and ideas that will garner greater attention, bring in more customers, and boost profits. The corporate world is changing and many companies are implementing new advertising ideas, customer service strategies, and technological innovations. Adopting a culture of experimentation can truly benefit a business.
For example, companies are experimenting with advertisements by tapping into social and political issues. Viral advertisements such as the latest Gillette commercial or the Nike commercial are making an impact and bringing more profit to companies. The companies Gillette and Nike have gained greater profit by experimenting with different marketing strategies aimed at current political events like the #MeToo movement.
Whether your organization creates a new mobile application that provides advantages to your customers or your business has a strong social media presence to assist consumers, employing the latest techniques and a culture of experimentation can put your company on the map. But what is a culture of experimentation and how should you define it at your place of business?
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What is a Culture of Experimentation?
Essentially, a culture of experimentation involves implementing new ideas or solutions throughout your organization without restricting these things to only certain departments. Experimentation needs to be embraced across the entire company and managers along with executives must have a mindset where they seek out others opinions or ideas.
Managers cannot think they know everything when it comes to running their business. A culture of experimentation is centered around innovation. However, in order to innovate in any industry, it is vital to experiment with new ideas.
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Failure and Experimentation Helps You Learn and Innovate
Performing many experiments means you will see some ideas flourish while plenty of others fail. Failure is an imperative aspect of a culture of experimentation. Without experimenting and failing at some projects, you will never be able to achieve that one great idea that helps your organization take off and become truly competitive in a busy market.
This is especially true when looking at the behemoth company Amazon, according to an article by David Hoos in The Good. This corporation is known for experimenting in the mobile devices and phones market. As such, Amazon has failed at times when experimenting such as when creating the Amazon Fire mobile phone.
Users were not happy with this device and it received only a 2.6 rating on Amazon. This even led to Amazon’s stock dropping a bit. However, this company is moving forward and continuing to innovate. If they remained stagnant, there would never have been an Amazon Prime or a Kindle developed.
“One area where I think we are especially distinctive is failure,” Amazon Founder and CEO Jeff Bezos stated. “I believe we are the best place in the world to fail (we have plenty of practice!), and failure and invention are inseparable twins. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Most large organizations embrace the idea of invention, but are not willing to suffer the string of failed experiments necessary to get there.”
Most of all, business leaders need to avoid being afraid to fail in order to successfully implement a culture of experimentation. It is important for leaders to learn from their mistakes. Making errors or implementing a new idea that ultimately fails may cause disappointment, but it also allows you to seek out input from your customers and learn why a product may have failed. As such, you can improve your product line and offer a much better option for consumers to try next.
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Why Changes and Innovations are Necessary for Success
Employing quick and efficient changes along with innovative ideas can help a company survive and thrive in today’s constantly advancing markets, according to The Wall Street Journal.
The rate at which these advancements take place is astonishing, as new technological appliances, communication devices, and even business models are coming on the scene every day. Without embracing a culture of experimentation, companies are likely to fall by the wayside and may even shut down.
“Unless companies learn to challenge their current ways of thinking, they will not be able to survive,” explained Jerry Wind, Lauder Professor and professor of marketing at the Wharton School of the University of Pennsylvania. “If a company is lucky enough to have a CEO who is visionary and can set the stage, it is easier for people to start exploring.”
Consumers today are becoming more savvy when purchasing products or services and are looking through reviews while new technological advancements are changing the ways companies do business. This is all leading to more organizations restructuring the ways they conduct business.
Experimentation also forces people to measure their results and the success of their proposals. This brings forth a more innovative culture at a company and helps leaders make better decisions for their organization. Essentially, making quick changes and bringing in new ideas will help your company survive and potentially succeed in a competitive market.
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How General Electric is Embracing a Culture of Experimentation
Along with Amazon, General Electric is another giant corporation that has spread a culture of experimentation across its many branches, reports The Wall Street Journal. In its early days, General Electric (GE) was merely a manufacturing company. However, today, it has blossomed into a digital industrial company that serves the energy, healthcare, software, analytics, rail, and aviation industries.
GE has been innovating with new marketing platforms and social media campaigns such as “Invention Donkey.” In fact, GE has even added a science-fiction podcast series about experts who are attempting to uncover the meaning of a message they received from outer space. General Electric also features a segment on “The Tonight Show Starring Jimmy Fallon” where the audience learns about various inventions that children came up with.
Many different innovative ideas have helped advance GE and continually allows the corporation to succeed in various competitive markets. Below, we describe how you can implement the same type of success as GE and Amazon by incorporating a culture of experimentation at your organization.
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The Framework Necessary to Put a Culture of Experimentation into Practice
There is a particular framework that businesses should incorporate when attempting to embrace the culture of experimentation in their company culture. First, business leaders can perform small tests and monitor the results of their experiment. As more results come in, this provides a new avenue for gaining greater insight into experimentation. This insight can be used to develop bigger and more impressive tests to see what may cut costs and boost productivity as well as profits.
Essentially, the framework used is similar to scientific research in which your business team creates a test procedure by defining a hypothesis, implementing changes, and making observations. Each test includes measurements regarding the particular change(s) and analysis of these results. This allows companies to learn what works and what doesn’t in terms of improving productivity, boosting profit, or any other important metric your business sets out to enhance.
Metric – Hypothesis – Test
Essentially, you can make a worksheet in which you determine the relevant metric and establish the goal of your experiment, according to the publication Conversion. Make sure everyone on your team understands the goal of the project and be sure that your goal is very specific instead of general. For instance, if you want to increase profit, define by how much and by when you’re looking to grow the net income of your company.
Then you’ll need to figure out how to define the key performance indicators (KPIs) in order to accurately measure the success of your experiment. You need to incorporate the current data that will be compared at the end of the test into your framework as well.
Afterward, you will have to define a hypothesis in which you consider whether one action at your place of business will lead to the goal or result you are looking to achieve. Then you’ll need to decide on the type of experiment you want to utilize to test your hypothesis. For example, A/B testing includes two variants where a process is exactly the same except for two samples that are used to test the hypothesis.
Once you’ve chosen a test, you can then begin gathering the results and prioritizing the KPIs that are most relevant to your experiment. You’ll also need to evaluate your customer base and the particular audience you’re trying to target with your experiment. It is advised that you continue the experiment for about three months and focus on two to three KPIs throughout.
Lastly, the results and the analysis you obtain will help you create a more comprehensive strategy to meet your goal. This will help you learn how to achieve your goals for your company and then determine the next steps in growing your business.
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Key Steps for Incorporating a Culture of Experimentation
1. Everyone has a Voice
The first step for implementing a culture of experimentation is to ensure everyone’s ideas at an organization are heard. Regardless of rank and leadership, listening and hearing the ideas of all employees will help you spread an experimentation culture, according to Forbes.
Instacart VP of Product Elliot Shmukler explained that managers can then become “more an arbiter” who help improve new ideas instead of being the only ones responsible for creating innovative solutions. In fact, some executives may make the wrong decisions and some managers could suppress the best ideas among their employees if they don’t embrace experimentation at their organization.
2. A/B Test & Metrics
The next step a company needs to take is to test multiple ideas including opposing arguments using an A/B test. Testing and experimenting will reveal results that show whether an idea is a hit or a miss. In addition, looking at the performance metrics will show you whether your idea will succeed among your target demographic.
One of the most vital aspects of experimentation involves setting and measuring metrics, Brian Quinn, principal at Deloitte Consulting LLP and a leader of Doblin, told The Wall Street Journal. This will help you measure the success or failure of a new idea or innovation. During the testing part, you will need to measure the return on investment. You will want to understand the challenges that you may face before you can expand the scope of your innovation.
In order to get your staff onboard with a culture of experimentation, you will need to raise awareness regarding the pace of change throughout your industry. This step involves reviewing “the timeline and pace of recent changes,” said Quinn. Industries are changing at an incredibly fast pace especially if you look at the expansion of mobile apps, despite the fact that mobile devices have been around for less than 15 years.
“People are starting to understand that, even if they don’t like change, they have to embrace it,” explained Quinn.
3. Encourage New Initiatives
Be sure to encourage all lower level managers and employees to create new initiatives and experiment regardless of whether a new project succeeds or fails. This form of encouragement will help more employees feel comfortable with a potential idea failing and allow them to continue innovating. Workers will no longer feel like they have to be successful with every new idea. Workers and managers will also learn from every failure and improve their ideas over time.
Lastly, recognizing effort among your staff will go a long way toward creating and fostering a positive, experimental environment. Following these steps will help you succeed in keeping up with the fast pace of change across any industry.
How Time Management Software Advances Experimentation
In a company where employees and managers are constantly experimenting, implementing time management software can be very helpful. Runrun.it time tracking software can assist with communications and setting metrics for new and innovative projects.
You’ll be able to view the amount of time spent on a project due to Runrun.it software’s automatic time tracking tools and you’ll have a chance to define the deadlines and timelines of your latest assignments.
In addition, all end-users will have access to a customized dashboard where they can view key metrics regarding the success of their project. This can help foster an environment of experimentation by allowing you to see the success of your ideas. To see whether this software program is a good fit for your company, click here for a free trial.