HBR IdeaCast How to Set Up — and Learn — from Experiments
Feb 4, 2020
Stefan Thomke, a Harvard Business School professor and author of "Experimentation Works," delves into the power of business experiments. He argues that companies often rely too heavily on intuition instead of empirical data. Thomke highlights how even small firms can benefit from experimentation and shares strategies for cultivating an experimental mindset. He emphasizes the dangers of decision-making from executives without data support and discusses fostering a culture that encourages innovation through testing and learning.
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The Bing Ad Experiment
- A Microsoft employee's small ad display change on Bing, initially dismissed by their manager, generated over $100 million in additional revenue.
- This highlights the power of experimentation over intuition in decision-making.
Barriers to Experimentation
- Many businesses don't experiment at scale due to lacking infrastructure, high perceived costs, or disregard for results.
- Risk aversion and the pressure to appear decisive hinder experimentation, especially among senior leaders.
Kohl's Experiment
- Kohl's experimented with opening stores an hour later to save costs, using controlled experiments to assess the impact on revenue.
- The results revealed that the change didn't significantly affect revenue.
