Experimentation: Your Fast Track to Better Decisions

Have you ever been overwhelmed by a decision? Whether selecting new tech solutions, rolling out a new strategy, choosing the best candidate for the role, or determining how to implement a new policy, making the right decision can feel daunting.

There are two main reasons why making a choice seems difficult these days:

1. The paradox of choice is a concept presented by psychologist Barry Schwarts, who states that the more options available, the harder it is for our brains to choose. This has to do with the cognitive effort required to understand and differentiate each choice. The presence of too many choices also leads to increased fears about making the wrong choice and missing out. The paradox of choice often manifests as analysis paralysis, where teams get stuck trying to consider every possible option. In the modern world, there is no shortage of choice.
2. In last week’s newsletter, I discussed the concept of BANI - a term introduced by futurist Jamais Cascio to explain the dynamics of the current competitive landscape. BANI is characterized as Brittle, Anxious, Non-Linear, and Incomprehensible. The non-linear aspect of BANI means that small changes can have disproportionately large effects, making it difficult to predict outcomes. When we cannot predict outcomes, making a choice feels scarier and more difficult.

Many leaders fall into the trap of waiting for more information, hoping that perfect clarity will emerge. They delay decisions, thinking that more data will lead to better outcomes. But there’s a faster way to make informed decisions without waiting for perfect information. So, how do we make better decisions in this challenging environment? The answer lies in experimentation!

In this week’s newsletter, I explain how experimentation can help you make faster, smarter decisions, with examples of how I have helped clients put this concept into practice.

The Fast Track to Better Decisions - Curious Experimentation

In my research on how Design Thinkers approach problem-solving, I uncovered six core capabilities of Design Thinkers. One of these six is what I call Curious Experimentation—the willingness to explore, test, and learn through action.

Curious Experimentation enables better and faster decision-making because it relies on…

• Starting Small: When faced with a complex decision, break it down into smaller, manageable parts. Each part can be tested through an experiment, reducing the fear of failure.
• Learning by Doing: Instead of theorizing endlessly, experimentation allows you to gather real-world feedback and use it to inform your next move. It’s about learning quickly and iterating.
• Reducing Risk: Experimentation reduces the risks associated with big decisions. With each small experiment, you gain more confidence and clarity, making it easier to scale up successful ideas.

When you are facing uncertainty and it is difficult to predict the potential outcomes of your decisions, Curious Experimentation provides a pathway to move beyond feeling overwhelmed and stuck. Now, let’s look at how some organizations have used Curious Experimentation to get unstuck:

Example 1: Optimizing Business Processes

Based on internal metrics and customer feedback, a client recognized the need to improve its loan approval process. An internal team of subject matter experts had done the analysis and presented a recommendation to the leadership team. With a lengthy list of recommendations, the leadership team was overwhelmed and felt stuck, unable to decide. Rather than deciding which recommendation to move forward with, I encouraged the team to select a few recommendations to experiment with over the next 30 days. They selected three key recommendations from the list and then asked their teams to create small experiments to test them. Each experiment ran for one month, allowing the bank to gather data on efficiency gains, customer satisfaction, and potential risks. This approach enabled the leadership team to make informed decisions based on real-world results rather than theoretical projections.

Example 2: Chatbot vs Expanding Contact Center

Based on customer feedback and their commitment to improving customer experience, a client was struggling to decide between implementing a chatbot or expanding their contact center. Instead of making a large-scale commitment on either option, they used Curious Experimentation to inform their decision. They implemented a basic chatbot for a small segment of their customer base while also slightly expanding their contact center hours for another customer base. Over three months, they collected data on customer satisfaction, resolution times, and cost-effectiveness for both options. Experimenting in this way helped the organizations to understand that, in the short-term, they needed to expand their contact center hours while a chatbot solution was developed as part of their long-term strategy to improve customer experience. This approach allowed the company to make an informed decision based on real-world data rather than assumptions.

Why is Curious Experimentation Effective?

The human brain is wired in a way that we fear making the wrong decision more than we value any potential gains from making the right decision - this is known as loss aversion. So, in an environment with an overload of options and when we struggle to predict outcomes, our natural tendency to avoid making decisions kicks in. Our inability to make decisions is rooted in our aversion to losses. Experimenting helps minimize the stronghold of loss aversion because it lowers the stakes and reduces the fear of failure. When you frame a choice as an experiment, you allow space to make a different choice if the selection doesn’t yield the desired outcome.

Podcast Round-Up

Looking for more insights on how to leverage Curious Experimentation? Check out Episode 12 of the Design Thinker Podcast. You can listen here ?????https://bit.ly/dtpep12 or on your favorite podcast platform.

Design Thinker Hack

This one is more of a challenge than a hack…I challenge you to run a mini-experiment in your workplace. Pick a decision that’s been on hold, and try these steps to get started:

1. Identify a small part of the decision that you can test quickly.
2. Run the experiment with a limited group or within a small area of your business.
3. Measure the results and gather feedback.
4. Iterate and improve based on what you learn.

Experimenting doesn’t always come naturally to us, so if it feels uncomfortable and clunky, that’s okay. Trust the process, learn, and adjust.

In a world of complex decisions, experimentation provides a palatable path forward.

Until next time,

Dani

Hello, I'm Dani. I help leaders unlock their organization's potential by identifying and moving beyond the stuck points holding their organizations back. My career has spanned Fortune 500 companies, large corporations, and government agencies across the USA and NZ. Ready to make stuff happen in your organization with evidence based practices? Let's chat! Book your discovery call today https://calendly.com/dani-chesson