Shifting a company or board culture from dashboards, measurable objectives, and numbers to “risk and learn” is a journey to sophisticated decision-making and ongoing innovation. We have become so entrenched in the terminology of the dashboard and yet are unskilled in understanding its appropriate application. We have ignored the development of the subsequent decision-making process and appropriate lenses with which to view the information we are so determined to collect.
This is particularly essential when piloting and testing new products or services. It does not mean that we eliminate identifying the quantifiable results we intend to achieve. It also does not mean that we cease using these in decision-making about next steps. What it does mean is that we shift leadership culture from viewing the data and information we receive as the end result – either declaring failure or victory. We lose the opportunity to leverage an outcome that has exceeded expectations, and our momentum, when we simply salute the result instead of understanding why it has occurred. We lose when we assign failure during a piloting stage, instead of learning and evolving for the next stage.
The process of risk and learn also requires building into our messaging at launch that we are in the piloting and testing phase. We must announce that we are aware everything may not go right and are seeking experience and feedback for improvement. Messaging of this nature sets expectations for leadership, employees, and customers, and yet, so often, we fail to take the time to do this, focusing solely on the features and benefits of our next great thing.
We can also miss the key to innovative rewards when we don’t determine from the outset what success is going to look like as we kick off a new endeavor. Is it quality over numbers? Is it numbers – financial or otherwise? Is it a bottom line increase or break even? Is it a loss leader, while we break into a newly developing market or technology? Is it building community or enhanced brand? What are we after and why?
Most importantly, we reach misunderstandings when we DO declare that our pilot was not on the mark and should be submarined. This occurs because we have not determined what our company or organization’s risk tolerance is, what factors contribute to where we are on this continuum, and critically, distinguish between our personal risk tolerance from an agreed upon risk tolerance for this venture by leadership.
The Risk and Learn Process:
Step one: Gather feedback from potential users, purchasers, and new clients.
Step two: Design based on their input.
Step three: Determine what intended success should look like from all facets, including acceptable risk tolerance.
Step four: Outline the communication messages for launch and include in the language that this is a piloting and testing phase – not intended to be perfection but to be a risk and learn time. You EXPECT that there will be learning and adjustments that will follow in phase two.
Step five: Identify the ambassadors – the human beings – who will consistently carry this message internally and externally, aside from the mechanisms for distribution.
Step six: Launch
Step seven: Gather anecdotal feedback and hard data, and review.
Step eight: WHAT HAVE WE LEARNED? Avoid declarations of failure. When something has gone differently than expected, adjust. Many great ideas have been cast to the bottom of the sea prematurely because of low risk tolerance or failure to recognize the risk and learn phase. “We’ve got one shot” is rarely the case, but a strong indicator of low risk tolerance.
Step nine: Declare that this is phase 2, based on what you have learned from feedback and relaunch. Thank those who have contributed to the adjustment(s) in your messaging, and declare what you learned in the risk and learn phase. You’ll be viewed as innovative AND responsive to your customer.
Step ten: Celebrate your successes and move from the piloting and testing phase to ongoing service provision to your customer.
This process allows you to manage the expectations of both the company or organization’s leadership and the member or customer you are attempting to serve. Creating a culture that doesn’t just allow, but encourages, everyone to risk and learn can propel you to new heights of innovation and success. This atmosphere unleashes a “what if we?” mindset, allowing team members to build upon possibility. Freedom from the tyranny of the dashboard can actually result in its very achievement being significantly greater than the original intention.
Recast your culture and mindset to risk and learn, and watch the exponential advancements occur.