This article originally appeared on Medium.
The digital age has brought with it business disruption on a scale that’s never been seen before.
It’s no longer uncommon to see ‘unknown’ startups rapidly grow and overtake competitors in long-established industries — seemingly overnight.
But how do they do it?
Many of them (like Booking.com, who are running 1,000’s of tests at any given time or their competitor Expedia who have made millions off small tests), use rapidly-deployed testing and experimentation to improve all facets of their business.
They encourage staff to share new ideas, test them, and rapidly roll out and scale the winning ones.
Every leader should want this type of culture — which empowers their employees to think and act creatively — ingrained in their company’s DNA.
But they won’t see much success unless they provide staff with the right tools and resources, establish a clear direction, and encourage the right mentality — something that won’t happen automatically, or overnight.
To kickstart a culture of optimisation and experimentation, it’s important that employees understand what this looks like. Change can only happen if your people are inspired to get involved and have a clear idea of how they can do so.
With this in mind, let’s look at the different ways you can start embedding experimentation into your company culture.
Define Your New Direction
If your company has decided to promote “trying, testing and failing”, then establish this as one of your core values. This will help you infuse this vision into every aspect of your business, as well as give your employees the tools and resources they need to live up to these values.
At Web Profits, we have built this into our company’s ‘why’. We have the statement “We believe there’s always a smarter and better way to do things” displayed in both internal and external collateral, and even painted on our office wall. This helps drive everyone in our team to always challenge the status quo with everything we do within our world of digital marketing.
Whatever your new direction is, it’s important to establish clarity, define expectations, create roadmaps to success, and plan out the crucial moves your company needs to make in order to get to where you want to be.
You should also create guidelines that help clarify and facilitate your new direction. For example, make a list of 5–10 rules that will guide your testing process, or a manifesto that defines your company’s key principles when it comes to experimentation and innovation.
Doing this ahead of time will not only help motivate your employees, but also diffuse tension and resistance when important decisions need to made or when things don’t go as planned.
Invest Time
Seeing the results gleaned from having a testing culture, many companies go ahead and declare that this will be their approach from that point forward. But what a lot of them fail to do is invest the time needed to establish the right culture.
If you’re serious about ingraining a testing culture into your company’s DNA, experimentation has to be treated as its own separate business function with as much time and focus spent on it as other functions — such as marketing — by both those in leadership teams and each employee.
It’s also worthwhile appointing a leader of your experimentation program, or even an entire team, who have KPIs linked to not only the number of experiments they run but also the speed with which they roll them out, as this will ensure it remains a priority.
At Web Profits, we ensure that testing and experimentation do not fall down the priority queue by scheduling company-wide innovation sessions every month, where every employee presents an idea to improve and grow the company. The idea that’s deemed most important wins a cash prize — with half paid to the winner upfront, and half once the winner has successfully implemented their idea. Many of the other top ideas also get implemented during the month, with members of our operational excellence team leading the charge to ensure things get done.
Other tech companies go a step further and segment off large parts of every employee’s time to be used for creativity, testing and innovation — like Google’s famous 20% time — which although a costly investment, has led to new, profitable products such as Gmail, Google Maps and Adsense.
Invest Money
Investing money into the culture you’re trying to establish is as important as investing time, and although it can be hard to invest into projects where the chance of failure is high, it’s all part of having a culture that embraces experimentation.
Adobe values innovation and testing so highly that they have a “no questions asked” ideas kit that any employee can access — whether their idea is good, bad or not even clearly formed yet. In this kit (which 2,000 employees have requested since its inception) is a step-by-step guide to how the employee can gather the data for their idea, test it and then pitch it internally. It even includes a $1,000 prepaid credit card to enable them to start funding the test.
Giving every idea $1,000 seems like a big investment… so is it working?
According to Mark Randall, Adobe’s Vice President of Creativity, it’s actually the smallest investment in innovation and experimentation the company makes, and in comparison to their investment in costly research labs it’s well worth it.
The numbers also tell the story: 960 Adobe employees filed patents last year, with only 130 from the company’s official research team.
Whether you can only invest a small amount or have a large budget to pull from, investing money into the generation of ideas, and your team’s ability to roll them out and experiment, is essential to ensuring the culture you want to embrace takes off.
Focus On Small, Incremental Wins
Given how competitive and volatile business can be, committing to a single, all-or-nothing experiment is a bad move and can lead to disaster. Instead, it’s best to focus on small, incremental wins.
Take Amazon, for example. Over the years, they’ve insisted on a ‘small wins’ approach to seeing what works with customers and sellers.
On one hand, they nailed it with Amazon Prime, which started off as a small idea to test before they scaled it and built it into what it is today. On the other hand, Amazon Destinations and Endless.com completely failed. But the profits generated from these “small” wins far exceeded the costs of the failed ideas. Plus, the insights gained were invaluable.
While you should always be aiming for high returns, focusing on smaller, easier-to-implement ideas will help build experimentation into your company without risking your whole business. If you find a lot of small successful ideas, your business will still grow rapidly, while assuming much lower risk than an all-or-nothing bet like changing your whole business model overnight.
The more small wins you get, the easier it will be to build your culture as well. As Sean Ellis from GrowthHackers.com puts it, “Wins drive buy-in and buy-in accelerates testing momentum.”
Document Everything And Share The Results
From ideation to testing, make sure you keep track of all your results and failures. Successful optimisation revolves around data-driven insights gained from experimentation, not gut instinct. Even if hypotheses are proven wrong, this is a good thing and should be noted. If your organisation is expanding or you have high turnover, documentation is the key way you can keep momentum going for your experimentation project, and not repeat the same test that failed previously.
When you do have wins, and even failures, it’s important to share these with your team. Commit to weekly or monthly meetings where everyone can review the results together. This is a great way to allow people to showcase wins, learn from losses, share their insights, and receive feedback on their projects. Plus it’s a simple and productive way of maintaining a mindset of innovation — and encouraging broader participation across the company.
Amazon CEO Jeff Bezos likes to say, “Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day…”.
And it’s a great point — even if your team has had 10 failures in a row, the fact that they have hypothesised, come up with an idea, run tests, and failed fast before moving onto the next test will build the momentum you need to find a big win.
So make sure you include other metrics in your reporting, such as the number of ideas raised, the number of experiments ran, the average experiment cycle time and cost, the number of learnings, and the experiment failure rate to measure success.
Remove Silos And Allow Everyone To Participate
In a culture of experimentation, collaboration and sharing is crucial. Hierarchy or a silo mentality shouldn’t determine who has the opportunity to present ideas and pursue new projects. This will only hold back or work against companies that are hoping to evolve.
Instead, create avenues for everyone to make a genuine impact. This will mean allowing employees, no matter what level they are, to lead and spend time working on projects they’re passionate about.
You should also encourage and facilitate people across all departments to work together and collaborate on ideas. The insights and ideas of people outside of the issue you’re trying to solve can be extremely valuable.
The same goes with encouraging different levels of staff to work together — often the best ideas come from the people who are closest to the action, working with customers or clients on a day-to-day basis, but these same staff can lack the confidence to come forward and experiment.
If you bring down those pesky silos, you’ll likely uncover new opportunities to drive growth. While a complete overhaul will take time, if you establish common goals, focus on incremental changes, and communicate a clear vision, you’ll find people are more receptive and excited about getting on board.
Heard of the Sony Playstation?
The idea for the gaming device came from Ken Kutaragi, a relatively junior Sony Employee who spent hours experimenting with building it — something most of his siloed bosses thought was a complete waste of time.
Embrace Failure
Experimentation and failure go hand in hand. One can’t exist without the other. And if you truly want to progress and succeed, this mentality should be part of your company culture.
To begin with, your employees might feel uncomfortable about experimenting — especially if it hasn’t been encouraged before. Naturally, there’ll be times when they fail to prove their hypotheses right, fail to bring key stakeholders on board, fail to generate enough excitement, or just fail in general.
These instances can be tough to handle, and chances are they’ll feel discouraged and ready to quit. To combat this, it’s important to publicly appreciate their efforts — no matter what the result was.
Here are few ideas to keep in mind:
- Encourage employees to pitch out-of-the-box ideas.
- Reward employees with the most innovative, ‘blue sky’ ideas.
- Praise experiments in brainstorming sessions.
- Acknowledge the insights gained from failures.
Jeff Bezos embraces failure across Amazon and puts it well:
“One area where I think we are especially distinctive is failure. 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.”
Put simply, your people need to understand that experimentation is a worthy investment — and that they shouldn’t fear failure. Instead, failure should be welcomed as a necessary step towards success.
It’s Time To Rock The Boat
Instilling a culture of experimentation and optimisation is an ongoing process. It will likely make you and your employees feel uncomfortable. It will force you outside of your comfort zone. And you’ll fail more times than you can count.
But if you want more engaged employees, more satisfied customers, and more business success, you need to embrace experimentation — warts and all.
Building this kind of culture takes time, but the effort is more than worth it when you start achieving the growth that may have been previously lacking.
