How Business Experimentation Leads to Business Innovation Pt. 1

When was the last time you used the scientific method? If your answer takes you back to your school days, you’re missing out on a key process to advance your ideas in the workplace!

In the first part of our discussion about business experimentation and its direct connection to business innovation, Kevin Switala, Gannett Fleming vice president and chief technology officer, discusses how you can use business experiments to further the work you’re currently doing and secure better outcomes for the future.

I think about business experimentation as an opportunity to investigate something that you want to learn more about or don’t know about already. It’s investigating and trying to answer a question, but that question is business-related in this case. For example, it could be something technological or related to a process or interpersonal dynamics. You’re starting with a question, trying to answer that question, and learning from the outcomes of your investigation to drive more informed business decisions.

There is a wide range of different business experiments. Some examples of business experiments include:

• Changing how an application interface looks to emphasize a specific function, button, or phrase to help people understand how to use that application better.
• Changing how you’re developing proposal content to see if your win rate increases because you’re packaging and communicating information better.
• Automating a previously manual, error-prone step in a business process to compare the results in quality and time efficiency.
• Offering a new service to your clients and looking at the uptake and profitability of the new service versus conventional services.

I like to refer to the scientific method because it’s an effective strategy to answer a question you’re interested in investigating.

You start with a question, conduct research to acquire context, and identify the variables involved with that question or the dynamics at play. You then develop a hypothesis, which is a statement that you want to prove or disprove, ensuring that you construct your hypothesis to demonstrate a cause-and-effect relationship. For example, a well-structured hypothesis could be: Getting eight hours of sleep at night reduces my need to drink coffee in the morning to become and remain alert. Ask yourself: What am I changing (the cause or independent variable) to create an outcome (the effect or dependent variable) that I’m trying to validate or invalidate?

Once you run the experiment based on the hypothesis, you need to confirm that you ran the experiment properly, look at its results, and seek key insights from it. You may then change your hypothesis because you’ve learned something that helps you refine it and run a new experiment, or you may want to create an entirely new hypothesis because you’ve disproven the original one. If you’ve proven the hypothesis, you will want to rerun the experiment multiple times to validate your findings.

The last step is implementing change based on the lessons learned.

What you’re trying to do with business experiments is:

• Learn new things that you may not have learned otherwise.
• Validate or invalidate assumptions that your instinct or intuition tells you are real.
• Amass evidence to convince leadership to make a beneficial change.
• Implement change in a more data-driven fashion.
• Mitigate risk.

Mitigating risk is a regular part of the architecture, engineering, and construction (AEC) industry. This applies to how we:

• Plan our projects.
• Design and engineer structures and systems.
• Build physical infrastructure.
• Ensure everything functions as designed before production use.
• Operate and maintain those structures and systems.Mitigating risk also applies to how we do our work, the quality processes we use, and the mechanisms we use to interrelate and communicate with each other.

Mitigating risk also applies to how we do our work, the quality processes we use, and the mechanisms we use to interrelate and communicate with each other.

Often, it’s challenging to understand causality in human behavior and complex systems. Business experimentation can help you collect data proving causality and not simply correlating a cause and effect. Data validate causality by showing us that this cause results in this effect. As planners, architects, construction professionals, and engineers, we want to ensure that:

• We have validated the products and services we provide.
• Our planning, design, construction, and engineering decisions are data-driven.

By looking at business experiments and utilizing different testing options, we can quantify and objectify subjective decisions in delivering our existing products and services and assist with developing new products and services. This can ultimately help create competitive advantages, improve products, increase market share, and realize greater profits.

There’s plenty of evidence showing that large tech firms, dynamic financial services firms, and other high-performing consulting firms use extensive business experimentation to test new ideas at a very granular level. With business experimentation, you’re looking to safely test small changes that, in the aggregate, make real business and value impact. We don’t learn if we don’t try something new or different.

By running multiple experiments, some of which may be very incremental, they all add up to significant changes that may materially and positively impact the work products, processes, and services you provide. Still, the idea is that you’re starting small, and you’re aggregating those changes. Those options, and often those small observations, lead to new insights and innovations. You’re observing different behaviors and outcomes than you may have otherwise if you were relying solely on instinct and intuition or conventional methods of developing new products that you want to offer as a business. Testing leads to insights, which lead to innovation.

Absolutely, and I would say experimentation and innovation are interrelated because innovation is really about connecting dots that exist in new ways or coming up with brand new dots. Experimentation helps you do both because it allows you to derive new dots that may impact and influence a novel idea, and it may help you test existing dots in new combinations and synergies that result in innovation or an approach that you may not have otherwise known.

When we talk about business strategy, we often talk about sizable investments by a business with inherent risk. It’s a very subjective decision to execute a business strategy, whether we’re acquiring another firm, hiring a “rainmaker” or a senior individual to penetrate a new market, or going to market with a new service. Experimentation allows us to define a business strategy but start small and incrementally test before making the big investment. In my opinion, business experimentation runs in parallel with business strategy and directly supports business strategy.

Take your innovative ideas and business experimentation to a new level – apply to our open positions and join our talent community today!

And if you’re ready to learn more about business experimentation, read Part 2 of our series.