“Why don’t we just do that instead of all this testing?”
The ‘we’ in the question is a large client active in the retail space.
The ‘that’ is what he assumed was required to launch a new product, and ‘all that testing’ was the test & learn plan that came first.
The question posed was unintentionally profound, and it articulates a perspective that corporate innovators encounter all too often.
A key reason why corporate innovators meet up with persistent resistance from the core business is that people don’t have a clear definition of the ‘what’ and ‘how’ of innovation.
The what of innovation can be summarized as something different that has value. The ‘how of innovation’ is the application of art of disciplined experimentation to a specific business opportunity.
The term was probably first used in this context in a 2012 post by Mukund Mohan, who now heads up Microsoft Ventures. I like the way it elegantly captures the three salient characteristics of successful innovation efforts:
- The word “art” implies that innovators must leverage both creativity and imagination when they are designing and executing their experiments. No experiment goes exactly as planned, and developing new solutions or insights from the (unexpected) results requires both unexpected leaps as well as logic.
- “Discipline” implies that experiments must be rigorously planned and executed, with the results reviewed in an unbiased and objective manner.
- “Experimentation” implies that the new must be discovered through experimentation and testing. Before the test, there are only assumptions, but no knowledge.
This also means that experiments should be hypothesis driven, and should follow the well-established standards of running experiments (test a limited number of variables, make a hypothesis and a prediction about the outcome, ensure non-biased data capture and conduct objective analysis of the results). Business innovators must also leverage gut checks and emotion, but in the end, that art must be subjected to the discipline of the experiment.
The process of innovation is similar across different disciplines and it should come as no surprise that it worked in a similar way in scientific labs. Indeed, there is much to learn from how experiments are designed and executed in the hard sciences.
Mastering these skills is increasingly important for business innovators. What Andy Grove pointed out in Only the Paranoid Survive continues to hold true: the rate of change in the world is accelerating and these changes (be they the technological, competitive and regulatory to the geopolitical or environmental) will impact every business in the world. He observes that “if you run a business, you must recognize that no amount of formal planning can anticipate such changes.” That is is truer now than ever before.
As a result, companies must constantly discover how to respond to the rapidly changing competitive environment. That discovery process is at the heart of innovation. In my view, that is the art of disciplined experimentation.
So when we truly understand the how of innovation, the answer to the question: “Why don’t we just do that instead of all this testing?” becomes pretty clear.
Pontus Siren is a principal with Innosight based in Singapore.