Experimentation Matters

Every company's ability to innovate depends on a process of experimentation whereby new products and services are created and existing ones improved. But the cost of experimentation often limits innovation. New technologies--including computer modeling and simulation--promise to lift that constraint by changing the economics of experimentation. Never before has it been so economically feasible to ask "what-if" questions and generate preliminary answers. These technologies amplify the impact of learning, paving the way for higher R&D performance and innovation and new ways of creating value for customers.In Experimentation Matters, Stefan Thomke argues that to unlock such potential, companies must not only understand the power of experimentation and new technologies, but also change their processes, organization, and management of innovation. He explains why experimentation is so critical to innovation, underscores the impact of new technologies, and outlines what managers must do to integrate them successfully. Drawing on a decade of research in multiple industries as diverse as automotive, semiconductors, pharmaceuticals, chemicals, and banking, Thomke provides striking illustrations of how companies drive strategy and value creation by accommodating their organizations to new experimentation technologies.As in the outcome of any effective experiment, Thomke also reveals where that has not happened, and explains why. In particular, he shows managers how to: implement "front-loaded" innovation processes that identify potential problems before resources are committed and design decisions locked in; experiment and test frequently without overloading their organizations; integrate new technologies into the current innovation system; organize for rapid experimentation; fail early and often, but avoid wasteful "mistakes"; and manage projects as experiments.Pointing to the custom integrated circuit industry--a multibillion dollar market--Thomke also shows what happens when new experimentation technologies are taken beyond firm boundaries, thereby changing the way companies create new products and services with customers and suppliers. Probing and thoughtful, Experimentation Matters will influence how both executives and academics think about experimentation in general and innovation processes in particular. Experimentation has always been the engine of innovation, and Thomke reveals how it works today.