What happens when a traditional model no longer works? As Global Head of Strategy & Agency Business Development for Reuters, I’m in charge of identifying new avenues for our media business to pursue. That means I look for new ways to generate revenue and drive profitability beyond our short-term horizon, which entails exploring new areas and trying to bring untested ideas to fruition. Experimentation is a big part of my team’s mission. To rethink the way you can bring value, you must keep a sense of open-mindedness and be accepting of fresh ideas. Over time, I have learned that experimentation has to be more than blind trial and error. It has to be thoughtfully devised and strategically carried out. Here are several characteristics of an experimentation-focused outlook I’ve found have served me well:
Look for “edge cases”
“Edge cases” are clients who don’t look like other clients. Their business model may be singular, for example, or they may want to use your products and services in ways your organization hadn’t envisioned.
In many situations, this type of client has a new approach that’s worth considering. Companies that address the market in a different way sometimes end up leading it; in just a few years, the outsider can become the forerunner.
If an idea or approach strikes you as challenging, it may be worth stepping back and considering it more fully. It could offer a preview of what the future looks like, help you anticipate upcoming changes in your industry and prepare for them with a first-mover advantage.
How does technology work for your consumers?
The biggest consumer habit changes are enabled by technology. In the news industry, for example, the way people consume content is changing because technology has changed: unprecedented connectivity has enabled the rise of video on-demand, which is rapidly displacing linear television; smartphones and tablets have transformed the publishing industry and diminished print’s importance; etc.
Many organizations think of technology only insofar as it can serve them and their needs, in what can be described as incremental. A forward-thinking organization, though, will also try to consider how technical change might deeply morph their consumers’ preferences, habits, day-to-day experiences, and how that unlocks opportunities to create entirely new products and services that meet a new set of needs that didn’t exist previously.
Define your tolerance for failure
A group with a mandate to experiment needs to have a culture where a certain level of failure is acceptable. Not everything is going to succeed, and being candid about when a project or an idea is not meeting success thresholds is key. Of course, that isn’t the kind of environment that can be created out of nowhere, and highlighting the strategic lessons from unsuccessful initiatives is the way to ensure the organization moves forward and constantly improves its ‘return on innovation.’
Managing time horizons and expectations is essential to that process. It’s easier to say yes to an initiative when there are some parameters set around it, and it’s also good practice to build a portfolio with a healthy mix of moderate impact and less risky projects with longer term ‘moonshots’ that could profoundly transform your business. Provided, of course, you can keep the necessary level of focus and avoid dispersion.