Big Data and Experimentation: A Complementary Pair for Innovation

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Big data is useful for finding interesting relationships and patterns, leading to hypotheses which can be tested through experimentation for cause and effect. While big data aids in hypothesis generation, experimentation is crucial to validate the insights. Companies that solely focus on big data without experimentation may miss out on successful outcomes in innovation.

Booking.com was founded by a Dutch university student in 1996. It grew slowly for almost a decade. By 2011, the company was generating more than a billion dollars in profits annually — making it the most financially successful digital travel market at the time. The secret to that accelerating growth was the company’s use of large-scale testing and experimentation.

In this episode, Harvard Business School professor Stefan Thomke explains how the company created and sustained a culture of innovation that challenged conventional assumptions about management and process.

Key episode topics include: strategy, experimentation, innovation, travel, digital, platform.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

· Listen to the original Cold Call episode: At Booking.com, Innovation Means Constant Failure (2019)

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