The real benefit of getting things wrong is insight – an almost priceless resource that enables businesses to challenge beliefs and the default way of doing things.
Doing more with less is the cliché for industries going through the belt-tightening of challenging economic times.
The adage no doubt originated on the factory floor, but applies equally well in the digital space, where doing a more with less of a key resource - information - is now critical to survival and success.
In his latest investor letter, Amazon boss Jeff Bezos outlined his belief in the necessity of making decisions with only 70 per cent of the information. While this introduces an element of risk, waiting until we know 90 per cent and moving too slowly will be far more costly than getting things wrong.
This is a sharp reversal of traditional, risk-averse methods for business planning. In an age where we are overwhelmed with information, it’s also ironic that we need to take this approach.
However, all resources come with a cost – be it financial, labour, or in the case of information, time. In the digital world time is crucial and that is the cost when it comes to information. The more comprehensive the information, the greater the cost in time.
These days the line between strategy and tactics is increasingly blurred. The pace of change means you need a strategy but you can’t spend months putting it together.
To survive in the new digital environment businesses must learn to make strategic decisions more quickly and with less information than they’re accustomed to or risk falling behind.
Acting with less than the full picture is an approach that will be a stride or two outside the comfort zone of many businesses. Working with less information means there will be mistakes, and businesses must learn to treat those failures as an essential part of the learning process.
CIOs should be prepared to adopt a philosophy that allows evidence-based ideas to be tested and refined in a safe environment, one where the only real failure is doing nothing.
As decision-makers and digital leaders, CIOs have an important role to play here. To be clear, this is not about spending millions based on a hunch. The business still requires a clear vision. But the CIO should be prepared to adopt a philosophy that allows evidence-based ideas to be tested and refined in a safe environment, one where the only real failure is doing nothing.
Failure has traditionally come with a stigma. Fortunately, we’ve moved on since the days of mediaeval England, when a failure like bankruptcy meant having your ear nailed to a post and ripped off as a permanent reminder of your folly.
Earlier this month, the world’s first museum dedicated to failure opened in Sweden. Its ethos is to see failure as a learning opportunity, and that’s exactly the approach businesses must take when creating strategies for digital innovation or transformation.
The real benefit of getting things wrong is insight – an almost priceless resource that enables businesses to challenge beliefs and the default way of doing things.
In New Zealand, the likes of Spark and Air New Zealand are examples of businesses that have embraced innovation and experimentation, including risking failure, in response to customer expectations.
I’ve seen first-hand Spark’s willingness to use unconventional innovation methodologies to solve business problems quickly and develop a minimum viable product fast for testing with customers.
Air New Zealand’s kiosk and app check-in options, and the Airband system that allows caregivers to track the progress of children flying alone, are evidence of a company looking to respond quickly to the digital expectations of customers.
Interestingly, both these businesses are driven, in part, by pressure from competitors based outside of New Zealand’s borders.
Some New Zealand businesses are doing digital well but I think our location means many businesses are still a little complacent and do not feel the sense of urgency that businesses in other parts of the world are responding to.
The question to ask in this context is: what’s the minimum we need to know to move forward? Then, aim to test assumptions and get feedback from actual customers or users as soon as possible, and act on that feedback with iterative development.
What you learn from this process becomes an evolving plan of activity, one that never really stands still, just like your competitors and customers.
By using an iterative approach, based on low-cost experiments and real-time feedback, you can mitigate risk and make much faster progress.
You can learn to live with uncertainty. To win in a digital world, there is no other choice.
Kevin Fitzsimons is founder/strategist at Element Digital Consulting.
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