How can you promote a culture of experimentation in your innovation portfolio?

1 Define your innovation goals and metrics

Before you start experimenting, you need to have a clear vision of what you want to achieve with your innovation portfolio and how you will measure your progress and outcomes. You can use frameworks such as the Three Horizons or the Innovation Ambition Matrix to categorize your innovation projects according to their impact, time horizon, and risk level. For example, you may have some incremental innovations that improve your existing products or services, some adjacent innovations that expand your offerings to new markets or segments, and some radical innovations that create new value propositions or business models. Each type of innovation requires different goals and metrics, such as customer satisfaction, market share, revenue growth, or return on investment.

2 Allocate resources and incentives accordingly

Once you have defined your innovation goals and metrics, you need to allocate your resources and incentives accordingly. You can use tools such as the Innovation Portfolio Canvas or the Innovation Risk Matrix to visualize and prioritize your innovation projects based on their potential value and feasibility. You may want to allocate more resources and incentives to the projects that have higher value and lower risk, and less resources and incentives to the projects that have lower value and higher risk. However, you should also ensure that you have a balanced portfolio that covers all types of innovation and that you do not neglect the projects that have high value and high risk, as they may be the ones that generate the most breakthroughs and learning opportunities.

3 Design and run experiments to validate assumptions

The core of experimentation is to test your assumptions and hypotheses about your innovation projects, such as the customer needs, the value proposition, the market potential, the technical feasibility, or the business model. You can use methods such as the Lean Startup or the Design Thinking to design and run experiments that help you validate or invalidate your assumptions and learn from the results. You may use different types of experiments, such as interviews, surveys, prototypes, pilots, or MVPs, depending on the stage and nature of your innovation project. You should also define your success criteria and learning objectives for each experiment, and collect and analyze data to inform your decisions.

4 Learn from failures and iterate

Experimentation is not only about validating your assumptions, but also about learning from your failures and iterating on your ideas. You should embrace failure as a source of feedback and insight, rather than as a sign of defeat or waste. You should also create a culture of learning and sharing, where you document and communicate your experiments, results, and lessons learned, and where you celebrate and reward both successes and failures. You should also be willing to pivot or kill your innovation projects if they do not meet your expectations or goals, and use the learning to generate new or improved ideas.

5 Scale and integrate successful innovations

The ultimate goal of experimentation is to scale and integrate the successful innovations into your core business or create new businesses around them. You should have a clear process and criteria for scaling and integrating your innovations, such as the customer demand, the market fit, the competitive advantage, the financial viability, or the strategic alignment. You should also have a dedicated team and budget for scaling and integrating your innovations, and ensure that they have the support and resources from the rest of the organization. You should also monitor and evaluate the performance and impact of your scaled and integrated innovations, and continue to experiment and improve them as needed.

6 Review and update your innovation portfolio

Finally, you should review and update your innovation portfolio regularly, to ensure that it reflects your current and future innovation goals and metrics, and that it is aligned with your overall business strategy and vision. You should also review and update your resource allocation and incentive schemes, to ensure that they support your innovation portfolio and culture. You should also review and update your experimentation methods and tools, to ensure that they are effective and efficient. You should also seek feedback and input from your stakeholders, such as your customers, employees, partners, or investors, to ensure that your innovation portfolio and culture are relevant and valuable.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?