Experimentation: Critical to Customer-Driven Innovation Success

Tom's focus is on rigor, and knowledge, and valid conclusions. No arguments there; but there is even a more fundamental issue - a company's willingness to embrace experimentation.

Several thinkers, like Eric von Hippel, Stefan Thomke, and Michael Schrage have discussed the benefits of experimentation. Going beyond the obvious links with innovation, they discuss how experimentation can help companies create new value for customers faster and more effectively.

Experimentation is an essential ingredient for customer driven innovation. Getting companies to embrace it enthusiastically is key, if the true potential of co-creating value with customers is to be realized. So, the critical question then becomes: How do we get companies excited about experimentation in the context of value co-creation?

Here are a few prescriptions with extremely positive side-effects:

Too many companies suffer from the White Knight and the one omniscient, omnipotent decision maker syndrome. As brilliant as Steve Jobs is even he could not have predicted that the backbone of iPhone's mass appeal would be their multitude of diverse open-source apps. Even their latest ad speaks to this phenomenon. 

In an environment where it is difficult to predict where users will take an innovation, involving a larger group of interested users through experimentation is even more critical. And before you dismiss this as being applicable only to technology products - think Arm & Hammer! It did not start off in our refrigerators and toothpastes, but it sure did show up there.

All addictions thrive on the addict's perceived sense of loss, if the addiction were to be given up. Behavioral economists will have a field day with the psychological addiction companies have to control. Their gain-loss equation is totally focused on what they will lose; not what they stand to gain. Those that have - Mozilla Firefox, Dell, P&G, Hallmark, Under Armour - can testify that less company control often translates into more value for the customer, because you can engage in more "what-if" thinking. In short, you can experiment more, something that Mitchell Baker points to in explaining the success of Firefox in her interview with The Mckinsey Quarterly.

For most companies failure is the deviation from what was expected or planned for. Not so in the world of experimentation, where failures are often the proverbial stepping stones to success. In the world of innovation, experiments that fail can actually have a large number of positive side effects, such as speedy elimination of unproductive alternatives, rapid learning, and building on that learning through more rapid testing. According to Stefan Thomke, early failures can lead to more powerful successes faster; a sentiment that IDEO echoes when they talk of failing often to succeed sooner! 

Recommendation 4: Get serious about play 

Most companies have tired ideas about work and play. The unrelenting focus on tasks, processes, and narrowly defined outcomes are a major stumbling block to turning people loose. And you can't experiment if you don't invite your people to play.

Inviting people to play lures them to play innovative "what-if" games and turns passive stakeholders into active collaborators - as Dell did with its customers, Boeing with its engineers and designers on the 737 assembly project, and Toyota with its suppliers. 

Experimentation is essential to customer-driven innovation not only because it enables faster development of products and services better suited to customers' needs, but also because it enables innovations that companies alone can't imagine!