Every company wants to grow and innovate but few actually do. This post is about how you can make growth and innovation part of your company´s daily life. Some executives subscribe to the big idea school of innovation-waiting for the lightning bolt that will change the world. When those ideas come, their impact is undeniable. But they are noteworthy, in part, because they are so rare.
In this post, I´ll suggest how you can build learning, innovation and continual improvement into your company´s core. I´ll draw on the lessons that I´ve learned from working in some very innovative companies including About.com and this one, AllBusiness. The Light Bulb, More Than a Bright Idea
The light bulb was clearly one of the big innovations of modern times. But it wasn´t the product of a moment of divine inspiration. It was the result of disciplined experimentation within a specific range of possibilities. Edison was looking for a filament that would glow without burning up. He then cycled through hundreds of options until he found the one that worked. In this process, he gave life to his statement that "Genius is 99% perspiration and 1% inspiration". While we all welcome moments of divine inspiration, we need to build our business strategy around an approach that´s more like Edison´s.
Quick, Focused Experimentation
Speed matters in business. The ability to learn faster and to improve faster than your competitors is a competitive edge as critical as sound financing or good technology. Metrics Driven Innovation is how you gain that edge.
Before you can innovate you have to define the key drivers of your business. This will help to anchor your explorations on the things that matter most. Most often this means having a business plan that you have thought out and that is updated. The drivers are specific to your business and your goals for this year. They might be improved margins, selling more to your best customers, increasing the rate of repeat orders or any number of other factors. You also need to assign a value (real, measurable, and hopefully monetary) to improvement in these factors.
After these metrics are defined, you return to the principles that you learned in high school science class to set up experiments. Experiments start with a hypothesis: "I believe that we can improve on this driver by x%, if we do the following thing". You then construct a test where you can see the results of that action. Most likely, that means comparing the test to a control group. Make sure that the results can actually be measured. When the results come back, you can see if the experiment was a success. If it was, then you can build on it. If it didn´t work, you can roll back to the control and try a new hypothesis.
Innovation in the Real World
I’ve had the privilige of working in several innovative companies including About.com and this one, AllBusiness. These companies are focused on innovation, growth and improvement as part of daily like. We test how different page layouts or headlines affect readership. We look at where our readers come from and what they’re looking for. In short, we live by Metrics Driven Innovation. As a result, the number of visitors to AllBusiness has more than tripled since last summer.
Metrics Have A Bad Reputation
Many people assume that metrics are the enemy of innovation believing that measurement stifles creativity. In fact the opposite is true. In an environment where the goals and the standards of success are clearly stated, people are free to try ideas, to invest in winners and cut their losers. The lack of metrics stifles innovation by turning the process of proposing ideas into a test of wills, salesmanship or popularity.