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The real answer is to dramatically decrease the cost of failure. A leadership team seeking to achieve this aim has three levers at its disposal:

1. Lower the costs of experiments. Running experiments need not be expensive. There are tons of low cost ways to test critical assumptions (chapter 5 of The Innovator's Guide to Growth describes about 30 such approaches).

2. Change the order of experiments. Many companies spend a lot of money answering the wrong questions. They'll seek to perfect a technology without understanding whether there's a market need. Assess strategic risks first, because they are often what sink an idea.

3. Increase the pace of decision making. Entrepreneurs with clearly bad ideas typically don't have the luxury of spending money on those ideas for too long. Companies, however, can let bad ideas linger for inordinate amounts of time because of slow decision-making processes. Shutting down flawed projects early avoids needless spending — and focuses resources on the best ideas.

innovation costs failure experiment

I’ve been thinking about a couple of things my CIO clients are wrestling with, and how these might be better approached jointly rather than as separate challenges. These are:

1. How to strengthen Business-IT Relationships in the context of the current economic climate.
2. How to experiment with, learn from and foster Social Networking in the business context (rather than the more common “Facebook-like” personal context.
3. How to sharpen and refocus the role of IT for the global recession.

CIO business IT socialnetworking experiment experimentation

Indépendamment de ces pratiques contestées, un grand nombre des meilleures leçons managériales de Welch n’ont rien perdu de leur validité (instaurer une culture de l’apprentissage permanent, bannir l’arrogance, disposer d’une organisation ouverte…).

De l’aveu même de l’auteur, d’autres méritent cependant un dépoussiérage. Ou, à tout le moins un addendum, dû à la montée en puissance d’un environnement et d’une culture de plus en plus globale.

jackwelch GE management experiment example examplarynature excitation

An economic world turned upside down makes it easier to take a fresh look, and this can open the door to making changes that will benefit you and the most important people in your life, now and in the long run. Here's what one of my former students, Deika Morrison, said to me yesterday when I asked her about the leadership silver lining in the cloud of our current economic crisis. She said that this is a unique opportunity to see "if you are achieving what you have identified as important. In an environment of record unemployment, people feel like they are not empowered and have no options." Now, she said, is a chance to discover that "you might have been doing work you really never wanted long-term and therefore you can move on faster, in a more productive manner. It's about changing mindset from depression, in every sense of the word, to opportunity."

crisis management experiment

The problem is that most business managers hate experiments. They want guaranteed returns. Predictable profits. Introducing uncertainty works against what they're trying to do. The comedy is that whatever profits they're talking about protecting originated from the founders of the company doing a huge experiment: starting a new company.

experiment innovation management risk mesure