The Digital Transformation Playbook: Rethink Your Business for the Digital Age
particularly clear to companies already steeped in the practice of running
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particularly clear to companies already steeped in the practice of running experiments. One survey of experiment-focused businesses reported that two-thirds of the new ideas tested by Microsoft failed to deliver any of their expected benefits. Only 10 percent of Google’s experiments were success- ful enough to lead to business changes. And Netflix has estimated that 90 percent of what it tries turns out to be wrong. 38 As technology journalist Alexis Madrigal has observed, “It turns out that our creativity is good but our judgement is lousy.” 39 There is a solution. Companies can compensate for the fallibility of management’s own judgment if they instill in their employees a culture of testing and learning about every aspect of their business. One company that has done so is Amazon. We can see this in the experience of Greg Lin- den, a former Amazon developer. He was working on Amazon’s checkout process when he came up with the idea of offering shoppers a final set of product recommendations as they checked out, based on the items that were already in their shopping cart. When he presented the idea, senior management hated it. It was a cardinal rule of e-commerce to not distract or get in the way of the shopper once they have begun the checkout process. But Linden kept thinking about how checkout shelves in real-world super- markets are ideal for getting customers to pick up just one more item on their way out. Although he had been forbidden to work further on the proj- ect, he went ahead and built a quick test version of the feature. The senior vice president who had voted down his idea couldn’t have been happy, but the company let Linden run the test anyway. (At Amazon, it was hard for 160 I N N O V A T E B Y R A P I D E X P E R I M E N T A T I O N even a top executive to block a test experiment.) The data came back, and Linden’s innovation turned out to be extremely profitable. Resources were immediately applied to developing and launching a full version of it. 40 In how many companies would Linden’s story have ended this way? Leading Without Deciding The antithesis of Greg Linden within the world of retail might be Ron John- son. In 2011, Johnson left Apple to take over as CEO of struggling retailer JCPenney. Johnson had a bold vision to reinvent the discount department store with a more modern, Apple Store–like environment. The retail experi- ence was to be transformed—featuring smaller shops within the store, cool coffee bars to hang out in, and new outside brands like Martha Stewart. Eventually, all cash registers and checkout counters would be replaced with high-tech product-tracking and self-checkout systems. Johnson pledged to reinvent pricing as well, shifting from heavy use of coupons and sales pro- motions to reliance on standardized pricing year-round. It was a truly bold hypothesis, but would JCPenney’s customers respond positively to a radi- cally different type of store? Unfortunately, after years of success leading retail teams at Apple, Johnson felt no need to test his hypothesis. Instead, he simply rolled it out, with no pilots and no limited test markets. The result was a catastrophe. The company, which had already been suffering for years, fell into much steeper decline. A little after a year under Johnson’s leadership, its quarterly results showed a 32 percent drop in same-store sales—what some observers suspected was the worst decline ever reported by a major retailer in history. 41 Seventeen months into his tenure, Johnson was ousted as CEO. One can only imagine what might have transpired if Johnson had instructed his team at JCPenney to test the assumptions behind his new strategy in a series of early and focused experiments. Rapid experimenta- tion requires more than curious and empowered employees like Linden in the trenches; it requires a different kind of leadership from the top, too. Nathan Furr and Jeff Dyer talk about this as a shift in role from “Chief Decision Maker” to “Chief Experimenter.” 42 In the experiment-driven organization, leadership becomes less about making the big decisions on behalf of the organization. The role of a leader, whether CEO or head of a small team, shifts from providing the right answers to posing the right questions. I N N O V A T E B Y R A P I D E X P E R I M E N T A T I O N 161 Download 1.53 Mb. Do'stlaringiz bilan baham: |
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