Maintaining that perspective takes a high level of
resolve, because it means relinquishing power to the
team and acknowledging that your ideas, like everyone
else’s, are just guesses. As Intuit’s Cook told us,
“[CEO] Brad Smith and I have to live by the same rules.
So we end up asking ourselves questions like, ‘I have
a fundamental belief about what we should do. Now,
what are the assumptions on which it is based? And
how are we going to test them?’ We need to do this
just like we would for anyone else. Experiments will
be nothing but window dressing until you change
how decisions are made and who makes them.”
Third, being the chief experimenter is hard because
even your innovators won’t always want to
do experiments. The entire purpose of conducting
experiments is to resolve some uncertainty and thus
reduce risk quickly and cheaply. To do that you need
to test prototypes, not full-blown products. This is
easy to understand intellectually but often hard to
accept emotionally. To understand why, we invite
you to engage in a short thought experiment:
Imagine yourself conducting a perfect product
launch. You roll out a brilliantly clever, well-made
product to a broad group of customers. You ramp
up press coverage and recruit an army of social media
influencers to maximize adoption. Your product
makes the cover of Time. Revenue pours in. You’ve
just invented the next iPod. Great work!
Now imagine yourself conducting a bad product
launch. You introduce the offering to a very small
group. There’s no media attention. No influencers.
No advertising blitz. And a good thing, since the
product hardly works. In fact it’s so bad, you feel embarrassed.
Target customers reject it. Not one dollar
changes hands.
That’s what it feels like to conduct a well-focused,
fast, and frugal experiment—like a failed product
launch. So it’s not surprising that innovators often
overdevelop their prototypes, launch them more
broadly than they should, and focus on the wrong
metrics of success.
We have found a formulation by former
Qualcomm innovation leader Ricardo dos Santos
to be particularly helpful in overcoming those tendencies.
He points out that all business experiments,
successful or not, generate three kinds of value. The
first is insight value—that is, the insight into the unknown
that comes from reducing uncertainty. That’s
the value NEC might have realized had it tested with
consumers an early prototype of a superlight laptop