Experimentation - Lessons from the Trenches 

Peter and Salim have thought deeply about the role of Experimentation in modern business—and especially in Exponential Organizations. Here are some of their observations and conclusions:

A to B, then to C

A key insight from the Lean Startup movement is that if you are at point A, you cannot see point C, so focus on getting from A to B. Once you’re at B, then you can see point C and plot a course toward it. For example, if you’re building a product with 15 features, don’t build them all. Build the two that will get you market traction and feedback from users, then plan the implementation of the rest. This is also known as the MVP or Minimum Viable Product. Experimentation serves as the tool of choice when organizations have a clear destination in mind but lack a predefined roadmap to reach it. By embracing Experimentation, companies open themselves up to agile and iterative processes that enable them to navigate uncertainty and adapt to changing circumstances. 

Imagination and Experimentation, not Expertise and Experience

A prevailing myth that must be debunked is that an expert holds the key to guaranteed success. As Peter often says, “The expert will tell you how not to do something.” An ExO acknowledges that expertise alone is not sufficient and that relentless Experimentation is essential for progress. By shifting the focus from seeking expert opinions to creating a culture of learning and Experimentation, organizations can tap into the collective intelligence of their teams and communities to explore new frontiers. Peter and Salim interviewed Sebastian Thrun of Udacity about this topic. Sebastian said, “When hiring, I look for imagination, not experience.”

Secrecy 

Unless Experimentation is the default policy throughout an organization, secrecy is critical when conducting experiments. Smart organizations often operate in stealth mode to protect against larger market consequences and media exposure when shutting down unsuccessful projects. This freedom to fail in private allows them to experiment more boldly, explore unconventional ideas, and iterate without fear of external judgment.

A Culture of Learning

An ExO is the embodiment of a “learning organization.” Creating a culture that encourages taking risks is vital for unleashing the full potential of Experimentation within an organization. By instilling a sense of psychological safety and removing the fear of failure, teams become more inclined to explore uncharted territories. The best ExOs go beyond mere lip service and establish reward mechanisms, including the use of crypto rewards, to incentivize and recognize successful experiments conducted within the community. Top ExOs give awards and recognition to team members who take big operational risks.

Big Companies Can Also Experiment

Large, mature organizations often face challenges when it comes to adopting a culture of Experimentation: namely, higher costs, regulatory barriers, and a fear of failure. Double that for government departments. However, some multinational corporations (MNCs) have recognized the value of running experiments in smaller markets to mitigate these challenges and test ideas more efficiently. This approach allows them to reduce costs, gather valuable insights, and make informed decisions before scaling globally.

Living on the Edge

While the heading sounds dangerous, it’s actually the opposite. By constantly experimenting, organizations stay closer to market realities. This is especially important in volatile and uncertain times. Their constant learning delivers an agility that enables them to remain responsive to market shifts and customer demands. By embracing Experimentation as a core attribute, ExOs ensure that they are constantly learning and evolving, positioning themselves as frontrunners in their industries.