A fundamental change is happening right now in the way smart organizations execute change. Rather than the Big Bang (or the Big Bungle as it’s sometimes called) or the slow two-year march into oblivion, or piecemeal evolution, we‘re seeing a dramatic new approach to change – business experimentation.
Of course, experimentation is not new at all. It’s an idea deeply embedded in the scientific method since medieval days. And it’s also a central tenet of Lean and the Lean start-up.
But, what we’re witnessing extends beyond any one methodology or use. It’s not just a tool or technique; it’s a basic rethinking of how we get from A to B and from B to C. It’s expanding exponentially across the business world.
Harley Davidson is in the process of launching a dramatically different product, an electric motorcycle. It’s very different from their older products in many ways. So, a year before anyone can buy one, they’re taking operating models out on the road to let their actively involved customers try them out. In socializing their dramatically new product, they’re determining product viability and market interest simultaneously and, as a result, gaining insight for both product development and market strategy.
Truthfully, most change methodologies are essentially the same and have 3-4 distinct phases: Get Ready, Understand Today, Design Tomorrow, and Implement. It’s an updated PDCA: Plan. Do. Check. Act. Humorously, most PowerPoint methodology charts show all four phases as the same shape, in some sort of phase equality idea.
But they are not all the same in duration or value!
Value is only created when words and paper become changed actions in the real and material world – when real people do real work in new and better ways – and that only happens at the end, in the final phase.
Hallmark is experimenting with 3-D printing to produce small batches of Christmas tree ornaments. This entire micro-factory is an experiment with a new technology and the idea of small runs. As they gain confidence in the technology, they can expand the size of the output and experiment with customized versions of ornaments.
This new model has at its heart just a few core principles:
- Mistakes are inevitable because the future is fundamentally unknowable
- Neils Bohr (Nobel Prize winning scientist) – “Prediction is very difficult, especially about the future”
- Mistakes lead to learning and therefore must be used
- Mistakes are your best learning opportunity
- Repeating mistakes is not learning, it’s stupidity
- The shape of experimentation is a helix, with iterations ever-rising
- Mistakes lead to learning which leads to value
Every day, Google and Amazon run hundreds of A/B tests invisibly, testing everything from prices and products, to fonts and slogans. With the right data and volume, they can learn in milliseconds what works and what doesn’t.
However, what’s needed to make these principles operational are just a few small cultural and behavioral changes, such as:
- Rewarding learning and not punishing thoughtful mistakes
- Appreciating the humility of experimentation. It takes courage to say, “I don’t know, let’s try it and learn.” Too often, the arrogance of certainty triumphs and inevitable failure ensues.
- Embracing the ambition of ‘betterment’ as in, “No matter how good we are today, we must be better tomorrow, let’s learn how we can”. A large financial service organization has the following motto that exemplifies this behavior, “We want to be the company, that puts our current operations out of business.”
New behaviors plus new learning equal tested and trusted improvement.
Cummins Engineering is experimenting with sensors to add value to their products. They can now see what’s coming through their filters and identify ways to economically extend their useful life.
The future is fundamentally unknowable, so organizations big and small, for-profit and not-for-profit all must learn the behaviors and techniques of experimentation. There’s no other way.