The Yin-Yang of Innovative Cultures

Discipline Your Experimentation

An innovative organization systematizes the process of experimentation through discipline.

 – Sohan Babu Khatri –

“The reasons people who want to work in an organization where ‘innovation’ is part of the desired employee behavior and organizational culture and factors playing a role for innovative cultures they cite are – fun, freedom, flexibility, fellowship, and flatter organizations.

Imagine fun without results, freedom without responsibility, flexibility without discipline, fellowship without accountability, and flatness of organization without leadership; it’ll be total chaos. Innovative culture is hard to create and sustain within an organization. When it comes to execution, it can get puzzling and even paradoxical, even to the best of the corporate leaders. The major reason is – innovative cultures are misunderstood. The tensions created by such puzzles and paradoxes need to be balanced and managed well; or else, all the efforts put on to create an innovative organization goes to waste; and sometimes, even be perilous.” (The Ying-Yang of Innovative Cultures: Learn to Manage and Thrive in Contradictions; the HRM, Vol 2, Issue 8, Baishakh 2080).

There is no doubt in the fact that innovative organizations encourage lots of experimentation, which increases their likelihood of coming up with something new and innovative. However, the relationship between ‘being experimental’ and ‘being innovative’ may not always have the cause and effect relationship. Comfort with uncertainty and ambiguity may not produce desired results if the discipline has not been well integrated into the organizational culture. On the other hand, an organization that has leadership that thinks they know or pretends to know all the answers upfront and encourages experiments that need to deliver results that justify their so-called ‘known answers’ wanders around the misconception of ‘being innovative’ rather than truly being innovative. A truly innovative organization experiment to learn rather than to produce a product or service that immediately succeeds in the marketplace.

Some leaders even tend to resort to ‘random new actions’ in the name of experiments. They end up creating a bunch of kids out of their employees, who keep on trying new things aimlessly – probably motivated to kill the boredom out of the regular job, hoping they deliver the results; and sometimes, they even may. In the lack of discipline, they can justify any new kind of action as an experiment.

However, an innovative organization systematizes the process of experimentation through discipline. It’s almost like creating a culture of managed chaos within the organization, but such chaos can be re-produced and akin to productive results in terms of learning that are valuable. Such discipline-oriented cultures devise ways of selecting experiments and selection criteria generally are – potential learning value and cost-effective designs that yield more learning to the organization relative to the costs. Such organizations set multiple gates of criteria at the outset for flagging ‘go’, ‘stop’, or ‘pivot’ to their carefully selected experiments. They do not shy away from the facts and information generated by their experiments. They do not have diffident leaders who avoid admitting that they were wrong prima facie and if need be, will kill the experiment or pivot the initial hypothesis. That’s where they nurture the discipline of taking harsh decisions related to unyielding experimental projects and make it less risky to launch new experiments.

Let me give an example of a hypothetical IT company to explain how such cultures of disciplined experimentation can get manifested. This company has a formal ‘search’ process whereby all teams (the organization has a project-team based organizational structure) within the organization, under the direction of one of the senior management members, undertake an explorative search for opportunities to develop new systems, software, or applications. The only criteria the company has at the outset comes from its vision and values of developing IT solutions that impact the broad ecosystem of business communities; irrespective of the industries. The team members explore various sources of information related to the pertinent problems of various industries and sectors. They engage the company’s broad network of advisors and clients to conceive new insights into the problems which are creating major bottlenecks in the process of creating strategic or operational advantages for the businesses. Such processes of seeking opportunities are initially unconstrained. All kinds of ideas are entertained – no matter how unrealistic, unreasonable, or far-fetched they seem at first glance. They do not look for validating data in order to support the idea. Instead, they ask a few interesting questions:

  • Does it match our strategic intent?
  • Would we pursue this idea, if we were to start our organization a new (startup point of view – where, tolerance to failure is very high)?
  • Does it carry the potential to solve the problem(s) of the broader business ecosystem (of that industry/ sector)?
  • If the initial hypothesis comes true, would it be valuable?
  • What are the points we think we are very confident about regarding the success of the idea?
  • If we fail, what are we going to learn? And how much learning would help the organization in spite of the absence of the related project/ product/ service?

During the process of exploration and subsequent (and multiple) discussions, teams are expected to formulate venture hypotheses that are testable. The central theme then becomes experimentation with discipline – that’s how they pick up ideas among many, reframe them, unroll them, and get themselves into the process of evolution. Major aspects of discipline lie in the following aspects of this company:

  • They do not experiment to validate the ideas and concepts held earlier (initially). Instead, teams are expected to design “foolproof experiments” that maximize the probability of exposing an idea’s imperfections.
  • They do not commit too many resources and time in the first round of iterations of the experiments – as if more resources would do wonders to the frequency and timing of success. They bootstrap their experiments – relying more on the capacity of human capital in designing frugal, but effective experiments.
  • They take a lean approach, which enables them to learn, pivot and at the same time know earlier in the cycle, what is going wrong – so that they can move quickly toward more-promising directions.
  • They either kill or reformulate their ideas on the basis of data generated by the experiments. As stated earlier, they design experiments in a way where such data is exposed to them in an easier way, sooner, and in a cost-effective manner. Ignoring experimental data in favor of ‘good news’ (which was never there) is considered a sin in this company.
  • The performance incentives are not tied to the success of the experimental projects – rather they are tied to the criteria of the disciplines of the experiments. Rather than trying to justify an experiment, they are better off joining a new one, and that can happen only when you stick to the discipline of experimentation.

Many companies cannot design their performance measures around criteria of disciplined experimentation; rather they design their reward system around the success of the experiments. Such an effort is akin to the efforts of a sports coach trying to produce an Olympian gymnast without any injury during practice.

In order to build an innovative company, a leader should strike a proper balancing act of disciplined experimentation. One cannot demand data too soon, killing the game of creativity; nor should one reward the performance, which encourages ‘letting the losses run too long’ in bad ideas. Leaders need to be brutal enough to sometimes, even kill the projects championed by one, when mandated by the data coming out of well-designed experimentations.
Few recommendations at the end:

  • Encourage all to come up with ideas, but make it a point that your organization’s vision, mission, values, and strategic intent are clear enough to everybody.
  • Develop and communicate a few higher-order criteria for idea selection. Such criteria should allow enough play of creativity among employee members of the organization.
  • Do not seek initial validation of ideas through already published data or already tried methods outside the organization.
  • Encourage employees to come up with clear hypotheses around the idea and its key metrics which defines the success of their ideas. (not targets)
  • Encourage employees to design lean and ‘killer’ experiments which serve as foolproof methods of testing the ideas in cost and time-effective ways.
  • Let experimental data decide whether to go ahead, drop or modify the innovative ideas.
  • Design performance management systems around the quality of ideas, experimentations, and learning derived rather than the success of the experiments.
  • Strike a proper balance between the freedom to generate ideas and the responsibility of designing foolproof experiments that truly test the ideas on their merits.
  • Create such a discipline of experimentation, where everybody within the organization understands that they are free to generate ideas and experiment around it; but are not free to come out of it without valuable learning for the organization – does not matter whether the idea/ experiment succeeds or not.
  • Another aspect of such discipline is that everybody should understand that the uncertainty prevailing around the initial idea is ok, but the same degree of uncertainty around the design of experiments is a sin.
  • Devise a proper system and culture within the organization that lets the leader understand, what exactly failed and why? Was it the idea? Or people’s capabilities? Or the organizational system? Or regulations and policies? Or the wrongly devised key metrics of success? Or was it the ‘must-succeed’ mentality while designing experiments?

The American author and motivational speaker Simon Sinek says, “The value of experimentation is not the trying. It’s ‘the trying again after the experiment fails.” But the ‘trying again’ can only generate results when the ‘first try’ was disciplined enough. Planned ideas are rarely innovative, but planned experiments carry the worthiness of unearthing the value of unplanned and innovative ideas.

Khatri is a Management Consultant and Educator.

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