This post first appeared as Steve Wunker's piece for LinkedIn
How do you plan when uncertainty only seems to grow? Through embracing disciplined experimentation. Here’s new writing from our Partner Charlotte Desprat on the five-step process we use to make a company great at it:
1. First, establish what you know as fact and what you don’t know – including the X-factors that could upend your plans.
2. From there, tease out the key hypotheses that you want to test. Keep in mind that some hypotheses might be more fundamental than others, and therefore might need to be tested earlier.
3. Then, consider how you might investigate each of these hypotheses using the scientific method. How can you break hypotheses into small, easily-testable components? Depending on the degree of unknowns, a rapid-fire approach might be enough to determine the key components of change.
4. Once you’ve designed your experiments, consider the time, cost, and risk associated with each. Together with the importance of each hypothesis, decide which experiments must come first vs. later. This will give you a priority list to adjust along the way.
5. Finally, set up a system by which you can quickly capture learnings and adjust. Obtain tangible measurements from these experiments. Your system should include a way to decide which experiments to follow up with, know if more are needed, and determine when you’ve learned enough from a given test. Critically, it should include a mechanism to end new ideas. Remember that about 80% of venture capital investments fail, and yet venture capitalists earn higher return on capital employed than public companies; their secret is that most of their failures come early, quickly, and cheaply.
By treating experimentation as a discipline, not a one-off, you can capture the upside of uncertainty. That will be one of the most important capabilities to win in a turbulent future.
Interested in our book chapter on experimentation? Click here for a direct download Jobs to be Done Chapter 12: Experiment and Iterate