Alexandru Bălţat

@alexandrubaltat

6 Steps to Build a Culture of Experimentation in your Company

In a predominantly changing business environment, the ability to shift gears by building an experimentation culture is a must to survive. Virality, the success vehicle for many companies these days, doesn’t rely on luck –it is an engineered growth hack.

You can always look at what your competition is doing right, and implement the same thing. But how would you know it will turn out to be successful?

Success comes from running hundreds, even thousands, of unsuccessful experiments. It all boils down to running tests until you find the recipe for success.

It’s necessary to focus on the resources you have while capitalizing on the success of your competitors. Everything starts with building an experimentation culture, and here are six steps on how to introduce it to your organization.

Welcome Failure

In a highly innovative and competitive digital arena, being comfortable with failure is a survival instinct for any startup.

Embracing failure should be part of the company culture –otherwise, it would be impossible to encourage experimentation.

Cosmopolitan launched a yogurt brand back in 1999, Facebook Home which was launched in 2013 did not succeed either. Despite these failures, Cosmopolitan remains to be a popular magazine, Facebook is one of the most successful social media platforms today.

Everything starts in which direction you steer the company –encouraging employees to pitch out-of-the-box ideas, and rewarding people with the most innovative suggestions go a long way.

If you’re lucky, the initial campaign could kick off successfully. But you are bound to experience failure along the way.

There’s only a 50 percent chance of success for every campaign. Although failure is disappointing, experimentation is, and will always be an important investment.

Aim for high return, but incrementally

An all-or-nothing business strategy is risky in a highly ambiguous market. Given how volatile the market is, you should be prepared to launch incremental changes but you should always aim for high returns.

Hitting the jackpot on your first try rarely happens, and you want to sustain growth not just rely on pure luck.

You need to make bite-sized adjustments to your business model while staying committed to your current business activities is less likely to cause unrest within the organization. Step-by-step improvements add up to help you achieve your targets.

The end result may be a different organization from what you originally created but what matters is your startup survives.

Analyze

What campaigns are you doing right now? Are your experiments working? What can you do to make them even more effective?

These are some questions you need to answer at this stage. You need to document the results of your current campaigns, assess its impact, and interpret the results. All these information could help you plan future experiments and tests.

Ideate

When you want the highest returns but your time is limited, run experiments using your current resources. You need to run through a lot of ideas before stumbling into something that works.

Unless you have a large pool of ideas, it would be impossible to conduct A/B testing. Yes, most ideas would have neutral or a negative impact but when you hit gold, every failure will be worth it.

In ideation, you need to make all the tests count –even the ones that failed.

If your sales decreased in the past month, you need to test a hypothesis. If you think the problem lies with your sales emails, you need to test the hypothesis and see if it is to blame for lower conversion rates.

To know for certain if the sales emails are to blame, you need to test your hypothesis. Analyze your data over the past six months, and create an email to compare the new conversion rates with data from the past months.

If your hypothesis is right, you’ll know what the problem could be. If not, you can test another hypothesis and do another test.

Prioritize

Because you have a high volume of ideas doesn’t mean you have to use all –it would be too costly and time-consuming. You need to prioritize ideas with a higher chance of success.

In this process, consider the following:

· Is the probability of success high, medium or low?

· How much time will it require?

· Will it need the participation of the marketing, design or engineering team?

· Will it be a collaborative effort?

· Is it a one-hit wonder or will it have a sustainable effect?

Test

Now, it’s down to the final step testing. Remember, you are looking for scalable experiments.

You want to start with a hypothesis and set an objective. It’s also necessary to have a timeframe for your tests, which is ideally from 30 to 90 days.

Using an experimentation document would also make it easier to keep records of this process, and compare data.

Building a Culture of Experimentation

The process doesn’t stop with the sixth step. If you are building an experimentation culture, you need to repeat the process. After finding out a successful experiment, you are back to square one.

Building a culture of experimentation takes time for you and your team but the effort will all be worth all the resources spent for running tests once you stumble on a golden nugget.

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