Experimentation Matters: Unlocking the Potential of New Technologies for Innovation [Englisch] [Gebundene Ausgabe]

The first part of the book explains in depth the reasons why experimentation matters for learning and innovation, and how new technologies are affecting the development of both products and services. Thomke shows how the rate of learning is influenced by several factors that affect the process and how it is managed: fidelity, cost, iteration time, capacity, sequential and parallel strategies, signal-to-noise ratio, and type of experiment. Beneath the bewildering diversity of approaches to innovation in different industries, Thomke uncovers six principles that can improve how experimentation occurs: Anticipate and exploit early information through front-loaded innovation processes; Experiment frequently but do not overload your organization; Integrate new and traditional technologies to unlock performance; Organize for rapid experimentation; Fail early and often but avoid "mistakes"; and Manage projects as experiments.

In the final chapter, Thomke looks at how some companies are "shifting the locus of experimentation" to customers as a way to create new value. This approach, sometimes referred to as "co-creation", not only raises productivity but helps fundamentally change the sorts of products and services that can be created. Innovation toolkits given to customers need to enable them to iterate through the steps of experimentation, be user-friendly, contain libraries of useful, pretested and debugged components and modules, and they must contain information abut the capabilities and limitations of the production process. In addition to the development of a customer toolkit, Thomke adds four other steps for shifting experimentation and innovation to customers and, very importantly, notes how the creation and capture of value also shifts.

One great strength of Thomke's book is the attention given to the managerial and organizational challenges of implementing new technologies such as computer modeling and simulation and combinatorial and high-throughput testing. As other writers have repeatedly emphasized - but many managers have not yet understood - new technologies *must* be introduced only in concert with revised business processes, structures, and management approaches. Iterated experimentation helps learning by increasing the number of failures. But if incentives continue to punish failures, the new technologies will be underused or misused. Financial incentives, organizational culture, and management communications will have to change if experimenters are to feel free to fail at the most productive rate.

Thomke illustrates and details the crucial role of organization, process, and management in realizing the potential of experimentation technologies with a range of illuminating cases. He devotes a chapter to these effects in the integrated circuit industry, examines the challenges faced by Bank of America in its bold service experimentation efforts, and shows how managers at Eli Lilly struggled with non-technological aspects of high-powered experimentation in the drug discovery process. A study of experimentation in the auto industry, particularly at BMW, suggests several lessons regarding the reality of technology introduction: Technologies are limited by the processes and people that use them; organizational interfaces can get in the way of experimentation; and technologies change faster than behavior. Thomke also shows how managers can look at projects as experiments, reiterating, refining, and learning from them as they proceed through the stages of design, build, run, and analyze.

But the lacuna is that experimentation has never been thought as a separate management discipline cutting across functional silos to bring innovative solutions into the marketplace. Experimentation as a strategic tool that needs management attention and involvement is the core theme of this book.

Management deals with producing results under uncertainty. Uncertainty can be broadly classified under technical, production, market and customer needs. Experimentation should tell us not only what will work, but also what does NOT work. The knowledge so derived should seamlessly flow across the Design-Build-Run-Analyze cycle that cuts across departmental boundaries in large organizations. This is analogous to the concept of ERP in business processes. Though this concepts looks simple, organizational barriers prevent the seamless sharing of information for innovation. Design, manufacturing , marketing and procurement functions fail to optimize on the organizational repository of knowledge that can put winning products into the marketplace. This book is an excellent study on how management can use experimentation as a unique strategy within and beyond organizational boundaries. Case studies are quite detailed and well illustrated.

Read this book. It is worth experimenting.

Thomke has developed his own conceptual framework for this purpose consisting of the four stages of "design-build-run-analyse". He focuses on a wide range of new experimentation technologies (including simulation) and he has studied how they are applied in a wide range of industries. He makes it a point to distill the knowledge thus gained into sets of principles, key factors, steps, findings etc at regular intervals. Thus the book's contents have been made highly accessible to a managerial audience. Managers will appreciate the challenge Thomke presents of tapping into the full potential of experimentation.

The book should also prove a valuable academic resource in management given the rigour of the research and its great managerial relevance. In fact, Thomke's cutting edge idea of customer toolkits for innovation (which catapult experimentation from the corporate realm to the customer domain) is already germinating in India. I, myself, have published a scholarly article on it very recently and I know others who have devoted sessions to it in top-flight MBA and executive programs here.

The book should make for absorbing reading by the management community worldwide and I recommend it highly.