The Surprising Power of Business Experiments

The Surprising Power of Business Experiments Interview with Stefan H. Thomke

I had the opportunity recently to interview fellow author Stefan H. Thomke, the William Barclay Harding Professor of Business Administration at Harvard Business School to talk with him about his new book Experimentation Works: The Surprising Power of Business Experiments, to explore the important role that experimentation plays in business and innovation.

1. Why is there a business experimentation imperative?

My book Experimentation Works is about how to continuously innovate through business experiments. Innovation is important because it drives profitable growth and creates shareholder value. But here is the dilemma: despite being awash in information coming from every direction, today’s managers operate in an uncertain world where they lack the right data to inform strategic and tactical decisions. Consequently, for better or worse, our actions tend to rely on experience, intuition, and beliefs. But this all too often doesn’t work. And all too often, we discover that ideas that are truly innovative go against our experience and assumptions, or the conventional wisdom. Whether it’s improving customer experiences, trying out new business models, or developing new products and services, even the most experienced managers are often wrong, whether they like it or not. The book introduces you to many of those people and their situations—and how business experiments raised their innovation game dramatically.

2. What makes a good business experiment, and what are some of the keys to successful experiment design?

In an ideal experiment, testers separate an independent variable (the presumed cause) from a dependent variable (the observed effect) while holding all other potential causes constant. They then manipulate the former to study changes in the latter. The manipulation, followed by careful observation and analysis, yields insight into the relationships between cause and effect, which ideally can be applied and tested in other settings. To obtain that kind of learning—and ensure that each experiment contains the right elements and yields better decisions—companies should ask themselves seven important questions: (1) Does the experiment have a testable hypothesis? (2) Have stakeholders made a commitment to abide by the results? (3) Is the experiment doable? (4) How can we ensure reliable results? (5) Do we understand cause and effect? (6) Have we gotten the most value out of the experiment? And finally, (7) Are experiments really driving our decisions? Although some of the questions seem obvious, many companies conduct tests without fully addressing them.

Here is a complete list of elements that you may find useful:

Hypothesis

Is the hypothesis rooted in observations, insights, or data?
Does the experiment focus on a testable management action under consideration?
Does it have measurable variables, and can it be shown to be false?
What do people hope to learn from the experiments?

Buy-in

What specific changes would be made on the basis of the results?
How will the organization ensure that the results aren’t ignored?
How does the experiment fit into the organization’s overall learning agenda and strategic priorities?

Feasibility

Does the experiment have a testable prediction?
What is the required sample size? Note: The sample size will depend on the expected effect (for example, a 5 percent increase in sales).
Can the organization feasibly conduct the experiment at the test locations for the required duration?

Reliability

What measures will be used to account for systemic bias, whether it’s conscious or unconscious?
Do the characteristics of the control group match those of the test group?
Can the experiment be conducted in either “blind” or “double-blind” fashion?
Have any remaining biases been eliminated through statistical analyses or other techniques?
Would others conducting the same test obtain similar results?

Causality

Did we capture all variables that might influence our metrics?
Can we link specific interventions to the observed effect?
What is the strength of the evidence? Correlations are merely suggestive of causality.
Are we comfortable taking action without evidence of causality?

Value

Has the organization considered a targeted rollout—that is, one that takes into account a proposed initiative’s effect on different customers, markets, and segments—to concentrate investments in areas when the potential payback is the highest?
Has the organization implemented only the components of an initiative with the highest return on investment?
Does the organization have a better understanding of what variables are causing what effects?

Decisions

Do we acknowledge that not every business decisions can or should be resolved by experiments? But everything that can be tested should be tested.
Are we using experimental evidence to add transparency to our decision-making process?

Experimentation Works 3. Is there anything special about running online experiments?

In an A/B test, the experimenter sets up two experiences: the control (“A”) is usually the current system—considered the champion—and the treatment (“B”) is some modification that attempts to improve something—the challenger. Users are randomly assigned to the experiences, and key metrics are computed and compared. (A/B/C or A/B/n tests and multivariate tests, in contrast, assess more than one treatment or modifications of different variables at the same time.) Online, the modification could be a new feature, a change to the user interface (such as a new layout), a back-end change (such as an improvement to an algorithm that, say, recommends books at Amazon), or a different business model (such as an offer of free shipping). Whatever aspect of customer experiences companies care most about—be it sales, repeat usage, click-through rates, or time users spend on a site—they can use online A/B tests to learn how to optimize it. Any company that has at least a few thousand daily active users can conduct these tests. The ability to access large customer samples, to automatically collect huge amounts of data about user interactions on websites and apps, and to run concurrent experiments gives companies an unprecedented opportunity to evaluate many ideas quickly, with great precision, and at a negligible cost per additional experiment. Organizations can iterate rapidly, win fast, or fail fast and pivot. Indeed, product development itself is being transformed: all aspects of software—including user interfaces, security applications, and back-end changes—can now be subjected to A/B tests (technically, this is referred to as full stack experimentation).

4. What are some of the keys to building a culture of large-scale experimentation?

Shared behaviors, beliefs, and values (aka culture) are often an obstacle to running more experiments in companies. For every online experiment that succeeds, nearly 10 don’t—and in the eyes of many organizations that emphasize efficiency, predictability, and “winning,” those failures are wasteful. To successfully innovate, companies need to make experimentation an integral part of everyday life—even when budgets are tight. That means creating an environment in which employees’ curiosity is nurtured, data trumps opinion, anyone (not just people in R&D) can conduct or commission a test, all experiments are done ethically, and managers embrace a new model of leadership. More specifially, companies have addressed some of these obstacles in the following ways:

They Cultivate Curiosity

Everyone in the organization, from the leadership on down, needs to value surprises, despite the difficulty of assigning a dollar figure to them and the impossibility of predicting when and how often they’ll occur. When firms adopt this mindset, curiosity will prevail and people will see failures not as costly mistakes but as opportunities for learning. Many organizations are also too conservative about the nature and amount of experimentation. Overemphasizing the importance of successful experiments may inadvertently encourage employees to focus on familiar solutions or those that they already know will work and avoid testing ideas that they fear might fail.

They Insist That Data Trump Opinions

The empirical results of experiments must prevail when they clash with strong opinions, no matter whose opinions they are. But this is rare among most firms for an understandable reason: human nature. We tend to happily accept “good” results that confirm our biases but challenge and thoroughly investigate “bad” results that go against our assumptions. The remedy is to implement the changes experiments validate with few exceptions. Getting executives in the top ranks to abide by this rule is especially difficult. But it’s vital that they do: Nothing stalls innovation faster than a so-called HiPPO—highest-paid person’s opinion. Note that I’m not saying that all management decisions can or should be based on experiments. Some things are very difficult, if not impossible, to conduct tests on—for example, strategic calls on whether to acquire a company. But if everything that can be tested online is tested, experiments can become instrumental to management decisions and fuel healthy debates.

They Embrace a Different Leadership Model

If most decisions are made through experiments, what’s left for managers to do, beyond developing the company’s strategic direction and tackling big decisions such as which acquisitions to make? There are at least three things:
Set a grand challenge that can be broken into testable hypotheses and key performance metrics. Employees need to see how their experiments support an overall strategic goal.

Put in place systems, resources, and organizational designs that allow for large-scale experimentation. Scientifically testing nearly every idea requires infrastructure: instrumentation, data pipelines, and data scientists. Several third-party tools and services make it easy to try experiments, but to scale things up, senior leaders must tightly integrate the testing capability into company processes.

Be a role model. Leaders have to live by the same rules as everyone else and subject their own ideas to tests. Bosses ought to display intellectual humility and be unafraid to admit, “I don’t know…” They should heed the advice of Francis Bacon, the forefather of the scientific method: “If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts, he shall end in certainties.”

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The Psychology of Creativity: Tapping into the Inner Innovator

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The Psychology of Creativity: Tapping into the Inner Innovator

GUEST POST from Art Inteligencia

Creativity is often perceived as a mysterious and intangible quality possessed by only a few select individuals. However, research in psychology has shed light on the inner workings of creativity, revealing that it is indeed a skill that can be nurtured and developed. By understanding the psychology of creativity, we can tap into our inner innovator and unlock the potential to generate novel and groundbreaking ideas. In this article, we will delve into the underlying principles of creative thinking and explore two case study examples that highlight the power of harnessing our innate creative abilities.

Case Study 1: Pixar Animation Studios

Pixar Animation Studios has redefined the world of animated films, continuously producing groundbreaking movies that captivate audiences of all ages. A key aspect of Pixar’s success lies in their commitment to fostering a creative environment. At Pixar, employees are encouraged to embrace their inner child-like curiosity, enabling them to think outside the box and bring novel ideas to the table. The company recognizes that creativity flourishes when individuals feel safe to take risks and voice their opinions.

Furthermore, Pixar adopts a collaborative approach that capitalizes on the power of diverse perspectives. They value the input of every team member, regardless of their role, fostering an egalitarian atmosphere where ideas can flow freely. By recognizing that creativity can come from anyone and anywhere within their organization, Pixar taps into the collective creative potential of their workforce.

Case Study 2: Warby Parker

Warby Parker revolutionized the eyewear industry by creating a consumer-centered business model that disrupted traditional retail habits. The founders of Warby Parker recognized that creativity is closely intertwined with empathy, understanding that true innovation arises from a deep understanding of the consumer’s needs and desires. They observed an opportunity to deliver stylish, affordable eyewear to customers who were tired of overpriced, limited options.

By conducting extensive market research and seeking insights into customer pain points, Warby Parker developed a disruptive direct-to-consumer model. The company’s innovative home try-on program, which allows customers to sample several frames before making a purchase, was born from this empathetic approach. Warby Parker’s success story demonstrates that creativity, when rooted in empathy, can redefine industries and challenge established norms.

Unpacking the Psychology of Creativity

Creativity is not a magical quality that only exists within a select few; it is a skill that can be developed and enhanced. The psychology of creativity unveils several key principles that can help individuals tap into their inner innovator:

1. Embrace a growth mindset: Adopting a growth mindset, as proposed by psychologist Carol Dweck, is crucial for nurturing creativity. Believing that creativity is a malleable skill fosters a willingness to learn and experiment, empowering individuals to explore new ideas fearlessly.

2. Cultivate curiosity: Curiosity is a driving force behind creativity. By maintaining a sense of wonder and actively seeking new experiences, individuals can broaden their perspectives and find inspiration in unexpected places.

3. Create a supportive environment: Environment plays a significant role in fostering creativity. Nurturing a culture that celebrates diverse ideas, encourages risk-taking, and rewards out-of-the-box thinking creates the ideal conditions for creative thinking to thrive.

Conclusion

The psychology of creativity reveals that everyone has the potential to tap into their inner innovator and generate game-changing ideas. By embracing a growth mindset, cultivating curiosity, and creating a supportive environment, individuals and organizations can unlock their creative potential. Case study examples, such as Pixar Animation Studios and Warby Parker, showcase the transformative power of embracing creative thinking. Indeed, the psychology of creativity teaches us that by harnessing our innate imaginative abilities, we can push the boundaries of what is possible and drive meaningful change in the world.

Bottom line: Futures research is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futures research themselves.

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Overcoming Resistance to Change

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Offering Strategies and Techniques for Identifying and Addressing Resistance to Change, Ensuring Smoother Transitions

Overcoming Resistance to Change

GUEST POST from Chateau G Pato

Change is inevitable in any organization, and yet many leaders find themselves battling resistance when attempting to implement new initiatives. Resistance to change stems from a variety of reasons, including fear of the unknown, lack of trust in leadership, and perceived threats to job security. However, with the right strategies and techniques, leaders can effectively identify and address resistance, leading to smoother transitions and increased organizational success. In this article, we will explore two case study examples to provide practical insights into overcoming resistance to change.

Case Study Example 1: The Sales Department’s Shift to Digital Platforms

In a mid-sized retail company, the sales department was reluctant to embrace digital platforms for customer engagement, despite the clear advantages it offered. Many sales representatives were comfortable with traditional methods and feared that digital adoption would render their roles obsolete. To address this resistance, the leadership implemented the following strategies:

1. Effective Communication: The first step was to communicate the benefits of digital platforms for both the company and sales representatives personally. Leaders explained how digital tools could enhance sales efficiency, generate more leads, and open doors to new markets. Additionally, interactive workshops were conducted to alleviate concerns and answer questions, creating a safe space for open dialogue.

2. Training and Support: Recognizing that resistance often stems from a lack of knowledge or skills, the company provided comprehensive training on digital tools. This training empowered sales representatives with the necessary skills to navigate the new platforms confidently. Ongoing support, including real-time troubleshooting and feedback sessions, further fostered a sense of security among the sales team.

As a result of these strategies, the sales department gradually embraced digital platforms, and their sales performance improved significantly. Representatives recognized the increased potential that digital tools offered, leading to a more harmonious transition and a boost in overall productivity.

Case Study Example 2: Restructuring for Agile Project Management

In a large software development company, a resistance to change emerged when transitioning from a traditional hierarchical management structure to a more agile project management approach. Some employees were skeptical, believing that the new structure would lead to increased workloads, decreased job security, and diminished autonomy. To overcome this resistance, the company employed the following strategies:

1. Empowering Leadership: To gain employee buy-in, the leadership openly communicated the reasons for the change, emphasizing the benefits of increased collaboration, faster response times, and greater innovation. Leaders ensured that team members felt involved by seeking their input and incorporating their ideas into the new structure. This approach helped build trust and alleviate concerns.

2. Pilot Projects: Instead of an immediate, company-wide implementation, the company initiated pilot projects in selected teams. This allowed small groups of employees to experience the benefits firsthand and share their success stories within the organization. By highlighting positive outcomes and lessons learned, the resistance began to diminish.

By effectively overcoming resistance through these strategies, the company successfully transitioned to the agile project management approach. Employees experienced increased job satisfaction, stronger teamwork, and the ability to adapt quickly to changing client needs. The organization as a whole became more responsive, competitive, and achieved higher client satisfaction rates.

Conclusion

Overcoming resistance to change requires proactive strategies to address the fears and concerns that accompany transitions. By implementing effective communication, training, support systems, empowering leadership, and pilot projects, organizations can achieve smoother transitions and garner employee support. The case study examples provided demonstrate the effectiveness of these strategies in tackling resistance to change. Leaders who implement these techniques will not only increase the likelihood of successful change implementation but also foster a culture of adaptability and growth within their organizations.

SPECIAL BONUS: Braden Kelley’s Problem Finding Canvas can be a super useful starting point for doing design thinking or human-centered design.

“The Problem Finding Canvas should help you investigate a handful of areas to explore, choose the one most important to you, extract all of the potential challenges and opportunities and choose one to prioritize.”

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The Impact of Virtual Reality on Education and Training

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The Impact of Virtual Reality on Education and Training

GUEST POST from Art Inteligencia

Over the past decade, virtual reality (VR) has rapidly evolved from a mere gaming technology to a powerful tool with vast potential in various industries. One sector where VR has already made a significant impact is education and training. With its ability to create immersive and realistic experiences, virtual reality has transformed the way we learn and develop new skills. In this article, we will explore the profound impact of VR on education and training through two compelling case study examples.

Case Study 1: Medical Training

One area where virtual reality has revolutionized education and training is in the field of medicine. Traditional medical training heavily relies on textbooks and real-life patient interactions. However, these methods have limitations when it comes to providing hands-on experience and exposure to rare medical scenarios. Virtual reality has stepped in to bridge this gap.

Take, for instance, the case of Osso VR. This VR surgical training platform allows medical students, residents, and even experienced surgeons to practice complex surgical procedures in a realistic virtual environment. By recreating the surgical environment, complete with haptic feedback, trainees can simulate various procedures on virtual patients with life-like precision. Osso VR has been proven to increase the efficiency of learning surgical techniques, reduce risks associated with training on patients, and enhance overall performance. It provides an invaluable opportunity for medical professionals to gain confidence and proficiency in critical procedures before stepping into the operating room.

Case Study 2: Cultural Immersion

Virtual reality has also proved to be a valuable tool in providing immersive cultural experiences for students. Many educational institutions now leverage VR to take students on virtual field trips, transcending the boundaries of physical travel and enabling them to explore ancient civilizations, distant countries, and unique cultural sites without leaving the classroom.

For instance, Google Expeditions offers an extensive library of virtual field trips using VR technology. Using inexpensive VR headsets, students can teleport to historical landmarks, foreign cities, or even outer space. By immersing themselves in these virtual environments, students can experience the history, culture, and natural wonders of places they may have never otherwise visited.

These experiences go beyond simply viewing images or reading textbooks. They enable students to actively engage with their surroundings, interact with virtual objects, and listen to narrations from experts. Research has shown that such immersive VR experiences enhance students’ retention, increase their empathy and cultural understanding, and improve their overall engagement with the subject matter.

Conclusion

The examples of medical training and cultural immersion provided here are just scratching the surface of the possibilities that virtual reality offers in education and training. VR has the potential to enhance learning outcomes across various disciplines, from engineering and architecture to aviation and military training. By offering safe, cost-effective, and immersive experiences, virtual reality is revolutionizing the way we educate and develop new skills.

As the technology continues to advance and become more accessible, it is essential for educators, institutions, and policymakers to embrace and integrate virtual reality into their curricula. By doing so, we can unlock the full potential of virtual reality and empower future generations with superior educational experiences, leading to a more dynamic and knowledgeable society.

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The Power of Storytelling in Driving Change Initiatives

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The Power of Storytelling in Driving Change Initiatives

GUEST POST from Chateau G Pato

Change is an inevitability in organizations, and its successful implementation often relies on effective communication and engagement. In this context, storytelling emerges as a powerful tool that captures people’s attention, fosters understanding, and ultimately drives change initiatives forward. As Braden Kelley aptly states, “Stories help us understand complex ideas and remember key information in an engaging and emotive way.” By weaving narratives into change management efforts, organizations can inspire, unite, and galvanize their workforce to embrace transformation. Let us explore two compelling case studies that exemplify the power of storytelling in driving successful change initiatives.

Case Study 1: Disney’s “Casting Call” Transformation

In the early 2000s, The Walt Disney Company faced challenging times due to declining attendance and customer satisfaction. To address these concerns, CEO Robert Iger introduced a change initiative known as “Casting Call.” Iger believed that by actively involving employees in the change effort and sharing inspiring stories, the company could drive a cultural shift towards exceptional guest experiences.

The company leveraged storytelling by creating a daily internal newsletter, “The E-Ticket,” which featured stories showcasing exemplary employee behaviors. These stories celebrated actions that went above and beyond, inspiring others to do the same. They celebrated the “Disney Difference” and demonstrated how every individual played a crucial role in creating magical moments for guests. By amplifying these narratives throughout the organization, Disney stimulated a sense of pride, empowerment, and a shared commitment to delivering outstanding customer experiences. As a result, Disney’s “Casting Call” not only reversed the decline but also established a solid foundation for the company’s future success.

Case Study 2: Patagonia’s Sustainable Revolution

Patagonia, the outdoor clothing company, embarked on a change initiative to promote sustainability and combat climate change. CEO Rose Marcario recognized that to truly engage customers and employees, Patagonia needed to go beyond traditional marketing campaigns. She understood the power of storytelling in inspiring action and creating lasting change.

Patagonia launched the “Worn Wear” campaign, which encouraged customers to share stories about their well-worn Patagonia products and how they had been repaired rather than replaced. By highlighting these anecdotes on their website and through social media, Patagonia invited a global community to participate in the narrative of environmental responsibility and sustainable consumption. These stories not only strengthened the emotional connection between the brand and its customers but also inspired other organizations to follow suit. Patagonia’s storytelling approach effectively transformed the company’s mission from merely selling clothing to fostering a sustainable revolution within the outdoor industry.

Conclusion

The compelling case studies of Disney’s “Casting Call” and Patagonia’s “Worn Wear” campaign demonstrate the undeniable power of storytelling in driving change initiatives. Stories possess an innate ability to influence, educate, and inspire people towards action. By harnessing this power, organizations can successfully navigate the storms of organizational change, foster meaningful connections, and create a shared vision for a better future. As Braden Kelley succinctly puts it, “In a world of facts, numbers, and figures, stories are what cut through the clutter and create deeper meaning.” Embrace storytelling as an essential tool in the realm of change management, and unleash its transformative potential within your organization.

SPECIAL BONUS: Braden Kelley’s Problem Finding Canvas can be a super useful starting point for doing design thinking or human-centered design.

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Change Management in Times of Crisis

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Strategies for Adaptation and Recovery

Change Management in Times of Crisis

GUEST POST from Art Inteligencia

Change management is crucial for organizations to navigate through times of crisis. Whether it is a global pandemic, economic downturn, or natural disaster, having effective strategies for adaptation and recovery is essential. In this article, we will discuss the importance of change management during a crisis and provide two case study examples to showcase successful strategies implemented by organizations.

Case Study 1: Procter & Gamble (P&G)

During the global financial crisis of 2008-2009, P&G, a multinational consumer goods company, faced the challenge of declining consumer spending. They realized the need for immediate action to adapt and recover, focusing on cost reduction and portfolio optimization. P&G implemented a change management strategy that included the following steps:

1. Engaging the Leadership: P&G’s leadership embraced the crisis and communicated the urgency for change throughout the organization. They provided a clear vision of the desired outcome and inspired employees to embrace the necessary changes.

2. Streamlining Operations: P&G reexamined their business processes and streamlined operations to eliminate inefficiencies and reduce costs. They implemented a ‘simplify to win’ approach, which involved consolidating product lines and optimizing the supply chain.

3. Enhancing Innovation and Marketing: P&G recognized the need to differentiate themselves from competitors during tough times. They focused on innovation and marketing efforts, launching new products and advertising campaigns to maintain consumer interest and loyalty.

The result of P&G’s change management strategy was significant. Despite the challenging economic conditions, the company managed to maintain profitability and even outperformed competitors by gaining market share. This successful adaptation and recovery showcased the effectiveness of a well-planned change management strategy during a crisis.

Case Study 2: Airbnb

In 2020, the travel industry faced an unprecedented crisis due to the COVID-19 pandemic. As countries imposed travel restrictions and people canceled their travel plans, Airbnb, a leading vacation rental platform, experienced a massive decline in bookings. To overcome this crisis, Airbnb employed a change management strategy focused on the following steps:

1. Prioritizing Safety: Airbnb acted swiftly to address safety concerns by introducing enhanced cleaning protocols and implementing strict guidelines to ensure guest and host safety. They communicated these measures transparently to rebuild trust among their users.

2. Diversifying Offerings: Recognizing the changing demand for accommodations, Airbnb expanded its offerings beyond traditional vacation rentals. They introduced Online Experiences, allowing hosts to offer virtual experiences to users staying at home. This diversification strategy helped them adapt to the changing needs of consumers during the crisis.

3. Empowering Hosts: Airbnb acknowledged the impact of the crisis on their hosts, who heavily rely on income from rentals. They introduced initiatives such as the Host Relief Fund, which provided support and financial assistance to struggling hosts. By actively involving and supporting their hosts, Airbnb built resilience within their community.

As a result of their change management strategy, Airbnb managed to rebound effectively. By September 2020, they had a successful IPO and demonstrated resilience in the face of a crisis that severely impacted the travel industry.

Conclusion

Change management is instrumental in helping organizations adapt and recover during times of crisis. The case studies of Procter & Gamble and Airbnb demonstrate effective strategies implemented to navigate through difficult times. By engaging leadership, streamlining operations, enhancing innovation, prioritizing safety, diversifying offerings, and empowering stakeholders, organizations can improve their chances of successfully adapting and recovering from crises. It is crucial for organizations to embrace change and implement proactive strategies to not only survive but also thrive amidst adversity.

SPECIAL BONUS: Braden Kelley’s Problem Finding Canvas can be a super useful starting point for doing design thinking or human-centered design.

Image credit: Pixabay

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Disruptive Innovation vs. Sustaining Innovation

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Understanding the Difference

Disruptive Innovation vs. Sustaining Innovation

GUEST POST from Chateau G Pato

In today’s rapidly evolving business landscape, innovation is often seen as the key to success. Companies are constantly seeking ways to gain a competitive advantage and stay ahead of the curve. Two concepts that often come up in discussions about innovation are disruptive innovation and sustaining innovation. Understanding the difference between these two types of innovation is crucial for companies looking to navigate the ever-changing marketplace effectively. In this article, we will explore the distinctions between disruptive and sustaining innovation and provide two real-world case studies to illustrate their practical applications.

Disruptive Innovation

Disruptive innovation refers to the introduction of a new product, service, or business model that fundamentally changes the existing market dynamics. It often disrupts traditional industries, displacing established products or services. Disruptive innovations usually start by serving niche markets or addressing the needs of under-served customers, eventually gaining traction and undermining existing market leaders. They often offer unique value propositions or bring significant cost advantages, enabling them to capture previously overlooked customer segments.

One prominent case study of disruptive innovation is Uber. Before Uber entered the transportation industry, traditional taxi services dominated the market. However, Uber brought a revolutionary business model by leveraging technology to connect passengers directly with drivers using their own vehicles. This disruptive approach offered several advantages like lower fares, real-time tracking, and cashless payments, giving it a competitive edge over traditional taxi services. This innovation not only transformed the ride-hailing industry but also revolutionized urban transportation around the world.

Sustaining Innovation

In contrast to disruptive innovation, sustaining innovation refers to incremental improvements made to existing products, services, or business models. It focuses on enhancing features, quality, or performance, helping companies improve their current market position or maintain a competitive advantage. Sustaining innovation allows companies to meet customer demands, keep up with changing market trends, and strengthen their market share by appealing to existing customers.

Apple’s evolution in the smartphone industry provides a compelling case study for sustaining innovation. When the first iPhone was introduced in 2007, it completely transformed the mobile phone landscape. However, instead of betting everything on a single disruptive innovation, Apple consistently pursued sustaining innovation by releasing new iterations of the iPhone each year. These subsequent models offered incremental improvements like faster processors, better cameras, and enhanced user experiences. By continually enhancing their product, Apple was able to maintain its market dominance and keep customers engaged, despite fierce competition from rival smartphone manufacturers.

Understanding the Difference

Differentiating between disruptive and sustaining innovation is crucial for businesses looking to adapt and thrive in today’s dynamic market environment. Disruptive innovation represents breakthrough changes that challenge existing norms, while sustaining innovation represents iterative enhancements aimed at maintaining market leadership.

By understanding the difference between these two forms of innovation, companies can make informed decisions about their strategic direction. They can identify opportunities for disruptive innovation to explore new markets, attract under-served customers, and potentially disrupt established industries. Simultaneously, they can also focus on sustaining innovation to enhance their existing products or services, ensuring they stay relevant and competitive.

Conclusion

Disruptive innovation and sustaining innovation play distinct roles in driving business success. While disruptive innovation can revolutionize industries and create new markets, sustaining innovation is essential for maintaining market dominance and satisfying current customer demands. Striking the right balance between these two forms of innovation can shape a company’s growth and longevity in an ever-evolving market.

Bottom line: Futurology is not fortune telling. Futurists use a scientific approach to create their deliverables, but a methodology and tools like those in FutureHacking™ can empower anyone to engage in futurology themselves.

Image credit: Pexels

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Design Thinking in Financial Services

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Enhancing Customer Experience in Banking

Design Thinking in Financial Services - Enhancing Customer Experience in Banking

GUEST POST from Art Inteligencia

In today’s highly competitive financial services industry, banks are constantly seeking innovative ways to differentiate themselves and provide exceptional customer experiences. One approach gaining popularity is design thinking. By applying this human-centered design approach, banks can better understand customer needs and create solutions that truly enhance their experience. This article explores the concept of design thinking in financial services, highlighting its benefits and presenting two case studies that showcase how this approach can revolutionize the customer experience in banking.

Case Study 1: DBS Bank – Reinventing the Branch Experience

DBS Bank, one of Asia’s leading financial institutions, undertook a comprehensive redesign of its branches to align with design thinking principles. The bank conducted extensive research to understand customer pain points and preferences. By mapping the customer journey, DBS Bank gained insights into areas where it could improve the customer experience.

Using design thinking, DBS Bank transformed its branches into vibrant and welcoming spaces, departing from the traditional cold and impersonal atmosphere. The bank incorporated technology seamlessly into the branch experience, providing customers with self-service kiosks, touch-screen displays for product information, and interactive tools for personalized financial planning. These changes not only enhanced efficiency but also encouraged customers to engage more actively with their banking needs.

As a result, DBS Bank saw a significant increase in customer satisfaction and engagement. The branch transformation project showcased how design thinking can positively impact the customer experience, making traditional banking more accessible and enjoyable.

Case Study 2: Simple – A Digital-First Banking Solution

Simple, an online banking platform in the United States, embraced design thinking to create a truly customer-centric banking experience. Simple aimed to simplify banking, addressing the frustrations customers encountered with traditional banks’ complex products and processes.

Through extensive user research and empathy mapping, Simple identified key pain points experienced by their target customers. Armed with these insights, the company created a streamlined online platform with an intuitive user interface. It focused on providing real-time financial insights, goal-oriented savings features, and transparent fee structures—all while eliminating unnecessary bureaucracy.

By leveraging design thinking in their digital-first approach, Simple ensured that its platform catered to users’ needs, resulting in high customer satisfaction and loyalty. Simple’s success demonstrated how design thinking can be applied not only to physical spaces but also to digital solutions, revolutionizing the customer experience in banking.

Conclusion

Design thinking is transforming the financial services industry by enabling banks to put customers at the center of the design process. By gaining deep customer insights, banks can create innovative solutions that enhance the customer experience, driving customer satisfaction and loyalty. The case studies of DBS Bank and Simple highlight how design thinking can be applied in both physical and digital environments, leading to remarkable improvements in customer engagement and overall brand reputation. As financial institutions continue to prioritize customer experience, embracing design thinking becomes pivotal for their success in an increasingly competitive landscape.

SPECIAL BONUS: Braden Kelley’s Problem Finding Canvas can be a super useful starting point for doing design thinking or human-centered design.

Image credit: Wikimedia Commons

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The Future of Transportation

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Autonomous Vehicles and Beyond

The Future of Transportation: Autonomous Vehicles and Beyond

GUEST POST from Chateau G Pato

Transportation has always been an essential element of human progress and development. From horse-drawn carriages to steam locomotives and automobiles, our journey towards efficient mobility has been nothing short of remarkable. However, the next phase of transportation promises to be truly revolutionary, thanks to the advent of autonomous vehicles. In this article, we will explore the potential of self-driving cars and highlight two intriguing case studies that illustrate the trajectory of this transportation revolution.

Case Study 1: Waymo’s Self-Driving Taxis in Phoenix

A prominent player in the field of autonomous vehicles is Waymo, a subsidiary of Alphabet Inc. (Google’s parent company). Waymo has been steadily forging ahead with its self-driving taxi service in Phoenix, Arizona since December 2018. This ambitious project aims to replace traditional ride-sharing services by providing fully autonomous transport to residents in the Phoenix metropolitan area.

Waymo’s test fleet consists of various autonomous vehicles equipped with an array of sensors, Lidar, radar, and computer vision systems. These technologies enable the cars to perceive their surroundings, navigate complex traffic situations, and interact with pedestrians and other road users safely. As of 2021, Waymo’s taxis have successfully completed over 20 million miles on public roads in autonomous mode, honing their capabilities through machine learning algorithms.

The Phoenix case study showcases the potential of autonomous vehicles to revolutionize daily commuting. By removing the need for human drivers, self-driving taxis can significantly reduce traffic congestion, carbon emissions, and the costs associated with car ownership. Moreover, they offer improved accessibility to transportation for those who are unable to drive, such as the elderly or individuals with disabilities. Waymo’s ongoing success in Phoenix hints at a future where autonomous transportation becomes the primary mode of urban mobility.

Case Study 2: Tesla’s Autopilot and Full Self-Driving Capability

While Waymo focuses on ride-sharing, Tesla, the electric vehicle pioneer, has been at the forefront of enabling autonomous driving for personal vehicles. Tesla’s Autopilot system, a suite of advanced driver-assistance features, has been available in their vehicles since 2014. Over the years, Tesla has continuously refined and expanded its Autopilot capabilities, aiming to eventually achieve full self-driving (FSD) capability.

Tesla’s approach to autonomy revolves around utilizing an ever-increasing fleet of vehicles to collect vast amounts of data. Those data are then used to train machine learning algorithms, which inform the development of autonomous driving software. Through regular over-the-air updates, Tesla’s global fleet’s driving experiences continuously contribute to the improvement of their autonomous technology.

This case study demonstrates the power of leveraging data and machine learning to achieve greater levels of autonomy. Tesla’s wide-reaching network of vehicles, each acting as a data-gathering entity, allows for rapid advancements in autonomous driving capabilities. As Tesla’s FSD technology matures, it has the potential to transform personal transportation, offering individuals the freedom to relax or be more productive during their journeys.

Looking Beyond Autonomous Vehicles

While autonomous vehicles are undoubtedly the future of transportation, the revolution extends beyond cars. Other transportation modes, such as trucks, buses, and drones, are also ripe for autonomous disruption. Self-driving trucks, for instance, have the potential to revolutionize logistics and freight transportation by maximizing efficiency and minimizing the risk of human error. Furthermore, autonomous drones could soon revolutionize last-mile deliveries, bringing packages directly to our doorsteps more efficiently and at lower costs.

Conclusion

The future of transportation lies in autonomous vehicles and beyond. The case studies of Waymo and Tesla illustrate the significant progress being made towards this future, where fully autonomous transportation becomes the norm. As we ride this wave of technological innovation, it is crucial to embrace the opportunities and challenges that autonomous vehicles present. By doing so, we can shape a future of transportation that is safer, more efficient, and more sustainable for us all.

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Six Keys to Successful Futures Research

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Six Keys to Successful Futures Research

GUEST POST from Art Inteligencia

Futures research is an essential part of strategic planning and decision-making in a variety of industries. It involves examining the “big picture” to anticipate and prepare for potential trends, events, and opportunities in the future. As such, it requires a deep understanding of current events and the ability to develop creative strategies to capitalize on them. Here are some key tips for doing great futures research.

1. Develop a broad knowledge base. To be successful in futures research, you need to be aware of a wide range of topics and emerging trends. This means staying up to date on current events, industry news, and technological developments. It also means being curious and exploring different ideas and perspectives.

2. Think critically. Great futures research involves not only recognizing current trends, but also predicting how they may change and evolve over time. This requires critical thinking to analyze data and make informed predictions about the future.

3. Look for patterns. Patterns can provide valuable insights into the future. By recognizing patterns in past events, you can gain a better understanding of potential future outcomes.

4. Utilize data. Data is an essential tool for futures research. By utilizing data-driven analytics and modeling, you can gain a better understanding of how current trends may shape the future.

5. Leverage technology. Technology can be a powerful tool for futures research. By leveraging new technologies and tools, such as artificial intelligence and machine learning, you can gain a more detailed view of the future.

6. Be creative. Creative problem solving is essential for great futures research. Think outside the box to identify potential opportunities and develop creative strategies to capitalize on them.

By following these tips, you can become a great futures researcher. With a deep understanding of current events, critical thinking skills, an eye for patterns, a data-driven approach, technological savvy, and creative problem solving, you can gain a unique and valuable perspective on the future.

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