Business longevity is no longer a given. And the concept that ‘what got us here, will get us there’ simply no longer applies in today’s disrupted environment – just consider the 50 per cent of Fortune 500 companies that have dropped off the list since 2000. The way businesses operate is changing fundamentally, from customer demand for hyper-personalisation and instant access, to opportunities to embrace new partnerships to gain access to new markets.
But this speed and agility is far from risk-free – and it is an endemic fear of failure that is constraining far too many companies from exploring not only new business opportunities but also compelling new digital technologies. How can companies embrace change without flirting with unacceptable risk?
Vince Padua, VP of Platform Innovation, Technology and Design, Axway, explains the importance of embedding a culture of experimentation throughout the business.
Forget the proof
Where does innovation start? In far too many organisations while the concept of innovation – often wrapped up in a digital transformation strategy – appears to be the top of the agenda, the reality is very different. There is a tendency to look with envy at those large, well-funded companies with a dedicated innovation team tasked with creating the next great business development; don’t bother, the problem is not a lack of resource, it is mindset.
It doesn’t matter how many, or few, individuals are thinking creatively about business opportunities if the company doesn’t truly understand innovation. If the response to any new idea is ‘Prove it’, the company is missing the point. ‘Prove it’ takes innovation off the table because the business is effectively looking for a predictable outcome; it is looking not for innovation but for an incremental step along the existing business path, a reinforcement of the ‘what has made this business successful to date, will continue to work’. Not only is that no longer true in today’s disrupted economy; it is also most certainly not innovation.
Innovation is not a straight line; it is trial and error. And that means testing; it means experimenting. Experimentation has no certainty of success, no known expected outcome. It is about an idea, a theory – one that may succeed or fail. But it is that process of success or failure that is key to unlocking innovation, to moving the business forward.
Experimentation requires a change in mindset, culture and behaviour. But it doesn’t require massive investment or dedicated teams. Quite the opposite. Everyone should be encouraged to adopt an experimentation mentality – from the Marketing Manager sharing a mock-up of a new campaign idea to non-marketing colleagues over lunch to the eCommerce team using A/B testing to determine the best location for a web site image.
Why just have an expensive team focused on innovation, while everyone else carries on with business as usual, when the entire company could be continually testing out new ideas and theories without incurring any significant cost? From prototypes to mock-ups to using APIs to try out ideas and concepts on a small audience, there are opportunities to experiment in every part of the business, every day. What has to change is permission to experiment.
With a company culture predicated on experimentation, individuals’ behaviour changes radically. People are empowered to try out new ideas without fear of failure. What happens if the customer on-boarding process is streamlined from 12 pieces of information to eight? Try it for 100 customers and see if it improves conversion rates. If so, great – let’s try it on 200 customers to see it the idea scales. It is a relatively small, low cost experiment that could drive significant uplift. Or not. The key is to try.
Trial and error
Once a company has the right culture in place, it is easy to begin to explore technologies that facilitate that experimentation mindset. A company considering expanding a game successfully developed for Apple across to Android to expand the market, for example, has traditionally been wary of the cost and development resources required just to get the product onto the new platform, before any of the other considerations regarding market development have even been considered.
Deciding between running the application natively on Android, using the Android SDK or porting the application to run on the Android OS and infrastructure is both significant and high risk – get it wrong and the game’s performance on Android could not only demolish its potential in the new market but potentially ruin its credibility with the existing Apple fan base. Instead, the latest generation of application development toolkits make it easy to write once, run anywhere – taking away the development considerations and enabling the company to test out the quality of the app on a small audience before making any significant investment in Android market development.
Similarly, most organisations have data resources that could, perhaps, offer value to a new audience either internally or externally, but are wary of testing out the theory due to the cost and time associated with hard coding a custom integration. Indeed, even if the experiment worked, the bespoke approach is not repeatable, meaning replicating the experiment at scale would require another complex and time consuming development. Using an API, it is simple to run an experiment to allow people to have access to the data. If it works, extending that access to more people or via mobile, even to a website, requires no more than change to the policies defining how the API is being exposed, governed and secured. If it doesn’t work, or different data is required, again the process of delivering different data to the audience is quick and simple – and can be done by anyone in the development team. The approach is low cost, quick and, critically, repeatable.
Innovation is, without doubt, key to business growth. But experimentation is the key to innovation. Without a culture of experimentation, a business will simply be attempting to follow the same models just a little bit faster, a little bit more efficiently. Where are the new customer experience networks; the new business partnerships that are increasingly underpinning corporate success?
Experimentation needs to be embedded within the day to day – not hived off to a separate department or ‘innovation team’. When everyone is empowered to consider new ways to advance better alignment with the market or better alignment with customers, big or small, change will happen. Increasingly, a successful business will not be the one with innovation on the corporate agenda but one that has as many people as possible engaged in the idea of experimentation, of exploring the possible, all the time.
Vince Padua, VP of Platform Innovation, Technology and Design, Axway
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