Embracing Experimentation: The Key to Successful Innovation
Why Failure is Essential, the Benefits of Return on Experimentation, and the Importance of Building a Culture that Rewards Innovation
💎 DESIGN: Sharpening Your Edge
In recent years, there has been a growing recognition of the importance of experimentation in the business world. Companies that are able to embrace change and experiment with new ideas are the ones that are likely to thrive in an ever-evolving market. Roberto Ferraro's recent LinkedIn post highlights one important aspect of this shift in thinking: the need to reward experimentation, even when it fails. I was particularly moved by his illustration.
Circa 2016, when I penned the original Return on Experimentation (ROEx) article, I argued that a more systematic approach to experimentation is needed in order to effectively measure the success of innovation efforts (marketing or otherwise). I argued that by measuring the return on experimentation, companies can determine the value that is being generated by their incremental innovation efforts, and make informed decisions about how to allocate resources in the future. Most importantly, organizations that systematize the setting aside of funds specifically earmarked for experiments would be in an advantageous position when category trends shift. This requires Capital.
Just as Roberto Ferraro argues, it's also crucial for companies to create a culture that values and rewards experimentation, even when it fails. By doing so, they can encourage their employees to take calculated risks and try new ideas without fear of negative consequences. This, in turn, can lead to a more creative and innovative workforce, and a greater chance of finding the next big idea. This requires Courage.
But it's not just about recognizing and rewarding failure. As Ferraro notes, it's also important to be able to kill unsuccessful innovation projects. By doing so, companies can free up valuable resources and avoid wasting time and money on projects that are not showing traction. This can help ensure that their innovation efforts are focused, efficient, and incremental. This requires Conviction.
A culture of disciplined experimentation requires Courage, Conviction, and Capital.
In conclusion, both Roberto Ferraro's article and the Return on Experimentation concept highlight important aspects of the shift towards a more experiment-focused business world. By rewarding experimentation and incremental innovation, even when it fails, and measuring the return on said experimentation, companies can create a culture that encourages creativity and risk-taking, leading to a greater chance of success in the long run.
