Why don't we Experiment enough?
Posted by Ajay Kelkar on Sun, Apr 18, 2010
It is actually amazing how difficult it is to drive experiments in the corporate world. Marketing folk seem to be more comfortable with the "tried & tested". Especially in businesses like Retail, where the opportunity to experiment is so large, you could do so much. As a Retailer you could change the browser location or add a new visual merchandizing display without too much effort! In the Banking world, there is a bank called Capital One which has mastered the art of running smart business experiments and making money!
Why then do CMO's not drive experimentation as a discipline?
Dan Ariely has this very interesting take on why companies do not experiment?
"I've found. I've often tried to help companies do experiments, and usually I fail spectacularly. I remember one company that was having trouble getting its bonuses right. I suggested they do some experiments, or at least a survey. The HR staff said no, it was a miserable time in the company. Everyone was unhappy, and management didn't want to add to the trouble by messing with people's bonuses merely for the sake of learning. But the employees are already unhappy, I thought, and the experiments would have provided evidence for how to make them less so in the years to come. How is that a bad idea?Companies pay amazing amounts of money to get answers from consultants with overdeveloped confidence in their own intuition. Managers rely on focus groups-a dozen people riffing on something they know little about-to set strategies. And yet, companies won't experiment to find evidence of the right way forward."
I have a few suggestions:
1. How about creating an "experimentation budget" and providing the resource to creative people within the company to run structured experiments with Marketing providing a "data led template" using Analytics & Statistical principles. This way any manager can pick up his pet hypothesis and bring some "method to the madness" by using a Marketing guided process and run an experiment.
2. Experimentation works because people fail and try again with a little tweak here and another there. Encourage failure, without that you would not get a superior out come.
Have a look at this interesting article by Dan!
http://hbr.org/2010/04/column-why-businesses-dont-experiment/ar/1