Best Practices

How to Test-Drive Innovation & Increase Your Chances of Success

“Why don’t more companies conduct rigorous tests of their risky overhauls and expensive proposals? Because most organizations are reluctant to fund proper business experiments and have considerable difficulty executing them. Although the process of experimentation seems straightforward, it is surprisingly hard in practice, owing to myriad organizational and technical challenges. That is the overarching conclusion of our 40-plus years of collective experience conducting and studying business experiments at dozens of companies, including Bank of America, BMW, Hilton, Kraft, Petco, Staples, Subway, and Walmart.”

In their in-depth Harvard Business Review article, “The Discipline of Business Experimentation,” authors Stefan Thomke and Jim Manzi dig into the problems, solutions and guidance that product builders and executive management need to know about before they power up the Idea Manufacturing Machine.

These aren’t vague hypotheses by armchair observers but road-tested analysis and results from experts who identify the actions and behaviors that do the most harm. What you get is an 11-page instruction manual on how risk-takers can do a better, more accurate job of calculating risks.

If your job concerns product innovation, development and management, it’s definitely worth your time. Download your free copy today.

Here are just a few of the critical points discussed:

  • The problem with big data: “It can provide clues only about the past behavior of customers—not about how they will react to bold changes.”
  • The complications of cutting-edge concepts: “Those that can reshape industries typically go against the grain of executive experience and conventional wisdom.”
  • The checklist for running a business experiment: How leaders can avoid “misinterpreting statistical noise as causation—and making bad decisions.”

This article is just one of five written by organizational leadership experts that you’ll find in our HBR Leading Innovation Bundle.

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About the authors: Stefan Thomke is the William Barclay Harding Professor of Business Administration at Harvard Business School. Jim Manzi is the founder and chairman of Applied Predictive Technologies, which provides software for designing and analyzing
business experiments.