Experimentation is the cornerstone of any organization that hopes to improve its performance and gain a materially competitive advantage, especially forward-thinking FIs. It’s the new look and feel of the brand/logo, the landing page, or the whole branch. It’s the teaser rates on new loans or deposits. It’s the tweaks and alternative versions of the creative that go into advertising on and offline.
What often makes the most significant difference in the long-term prospects of any company is its ability to capitalize on the learning that comes from that experimentation.
But it’s not the boldness or depth of that experimentation that tips the scales into an unfair advantage for the successful innovator. It’s the speed at which it’s done. It’s the cycle time between idea, to test, to lesson learned, to a new idea, to a new test, to the unique insight, and so on.
So the question becomes, where are you rate-limited in your experimentation process? Where is there scarcity and where is there abundance?
Is it in ideas? Do you have ample ability to pick experiments to test? Do you have a process for selecting and the budget to execute the experiments but lack new ideas? Then look at your organization, deep within it, all the way to the frontline worker. Actively solicit those ideas. Run contests and incentives to drive up participation. You only need to ask four things:
- What is the hypothesis? (“If we do X, Y will happen”)
- What would be measured/observed to support that idea?
- How would we test that?
- What might we do differently based on the results?
And by all means, celebrate and reward the idea and not the result. Doing this requires embracing the concept “this might not work.” You don’t want just obvious or sure thing ideas. Even if the odds are slim, a hypothesis with many potential upsides is often more valuable (even when it doesn’t work out) than a safer and more incremental idea.
If you have a lot of ideas, but they tend to collect dust, then look at those downstream processes. Again, set goals and incentivize the execution/throughput. How long does it take to select and execute experiments? If everyone agrees it’s a good idea to try (i.e., appropriate scope/cost), and you’re taking weeks to get around to it, what would it take to do it in days, or tomorrow, instead? Delegate that decision lower in the org? Limit the scope to fit budgets? Look at the things inhibiting your organization from developing experimentation as a habit.
In the end, you need to look at this like any other core business process. Improvements in experimentation will have significant impacts on your bottom line. Drive that change by increasing the speed and volume of insights you can harvest from your efforts.