Executives undertake two fundamental activities: knowing what to do, and getting it done. This becomes especially challenging during times of uncertainty.
Uncertainty is the realm of entrepreneurship, and there is a lot to be learned from the decisions and actions of successful entrepreneurs. I have studied the entrepreneurial mindset for more than 20 years, including the differences between successful and unsuccessful entrepreneurial leaders and teams. They have a lot to teach us.
Their secret is knowing how to do Smart Experiments. By this, I mean that they know how to make decisions, and take actions, to explore the unknown. That said, it is not about doing random experiments, it is about doing experiments in a way that mitigates risk and predisposes to successful outcomes, consistently, over the long run.
Experimentation is a process, and every process can be done poorly or well. Doing a process well involves knowledge about the process, and proper application of that knowledge.
Here is how to do a Smart Experiment in four steps:
1) DESIGN. Before taking action, we need to consider the possibilities. In the Design step, we assess available resources and creatively combine these resources to develop a list of possible experiments. Successful entrepreneurs maintain ‘opportunity registers’ and are always on the lookout for new resources and experiments to consider doing.
2) DECIDE. Given a long list of possible experiments, our next step is to categorize these. This is an ongoing process. Any possible experiment can be placed into one of four categories: a) do it now, b) do it later, c) find a partner, or d) forget about it.
3) DE-RISK. Before embarking on our “do it now” experiments, we need to de-risk them. This simply means that we identify the potential causes for failure, and prepare for these in advance of doing the experiment. This step recognizes that problems can take on critical significance, and it is easy to anticipate and prepare for many potential problems. When we do this, our experiments have the best chances for success.
4) DELIVER. Now it is time to do the experiment. Since an experiment is an investment of a first set of resources intended to secure a second (more valuable) set of resources, we want to be sure that we harvest all of the value that results from our experiment. Many individuals and organizations forget this last step, and limit their success.
We choose whether to do our experiments poorly or well. Doing Smart Experiments – and helping others to do them – increases our chances for successful outcomes, and this has a compounding effect that is highly valuable to individuals and organizations.
Here are a few lessons relating to Smart Experiments:
First, Smart Experiments are all about taking action. Many individuals and organizations experience analysis paralysis, and replace action with excuses. Instead, break down any ‘risky’ experiment into small steps that empower people and teams to get started, and to learn quickly with low risk of loss. It is the difference between leaping across a room, and taking a series of steps. By taking one step at a time we not only have a higher chance for that individual step’s success, but we are much more likely to make it across the room – even if we encounter a previously unforeseen obstacle.
Second, succeeding and failing are parts of the same process. Smart Experiments, using prioritization and risk mitigation, mean that failures become small. That said, they do occur, and are expected to occur. If an organization is not failing, this means it is probably not trying hard enough, at least relative to its potential. This is like the kid who is always told she is so smart at math, and eventually she stops trying in order to protect her self-identity. Executives and organizations are like this, too. When we achieve a certain level of success, we sometimes transition into a ‘protective’ mode. Protecting one’s position as opposed to innovating and advancing one’s position.
Finally, if we believe in Smart Experiments as a mission-critical tool for individual and organizational achievement and success, then we should celebrate Smart Experiments, irrespective of any particular experiment’s outcome. People achieve positive results, on average, when they take intelligent action. If we want our teams and organizations – and especially ourselves – to consistently do Smart Experiments, then we must motivate and celebrate their use in pursuit of sustainable, long-term success.
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