Accelerating learning by experimentation

Abstract

Beyond a company's ability to innovate lies a process of experimentation that enables the organization to create and refine its products and services. The constantly changing environment and complex linkages between variables require not only moving between observation, exploration and experimentation, but also iterating between experiments. Trial-and-error types of experiments are also an integral part of innovation processes, even though they are frequently not fully recognized as experiments. New technologies for experimentation, e.g., rapid prototyping, amplify the importance of managing these factors, thus providing the potential for higher R&D performance, innovation and ultimately new ways of creating value for customers. Regardless of industry, companies share an iterative process of a four-step experimentation cycle, which consists in designing, building, running and analyzing the experiment. How learning occurs, or does not occur, is affected by several factors: fidelity, cost, feedback time, capacity, sequential and parallel strategies, signal-to-noise, and type. The 'case' of Team New Zealand - winner of the sailing regatta America's Cup in 1995 - is woven through this chapter and shows how learning by experimentation works at the front end of innovation by integrating new experimentation technologies with tried-and-true methods and capturing the results in the organization.