Booking.com runs over 25,000 tests every year. This approach has transformed a small startup into a giant of the travel industry. Extensive experimentation has been crucial for their marketing and innovation strategies. According to Lukas Vermeer, Director of Experimentation, they run over 1000 experiments at a time. They run tests for individual website visitors to test specific ideas and learn what works better. These are mostly A/B tests, where they assess the results from two alternatives. In this way they can find an ideal sequence for each customer journey on their site.
How does Booking.com set this culture of experimentation? Stuart Frisby, who was Director of Design, set these guidelines. First, no HIPPOs (highest paid person’s opinions) are allowed to dominate. Secondly, every decision is a democracy, but every decision is tested. Thirdly, trust your tools.
Building a culture of experimentation within a business means that unexpected opportunities are stimulated and exploited. It can lead to groundbreaking innovations, improved processes, and a workforce that is more engaged and adventurous.
How can this be achieved in practice?
Creating this culture starts with the leaders. Commitment across the leadership team is crucial in fostering a spirit of experimentation. Leaders should redefine what success and failure mean. They can encourage a growth mindset that accompanies a culture of experimentation. This involves creating an environment where employees feel empowered to share new ideas, test them, and rapidly scale the winners. The leadership team should live this culture day in and day out to ensure the organization keeps pace in a rapidly changing business environment.
Empowering employees to test hypotheses and iterate quickly is essential. This involves providing the time and the tool for experimentation tools and encouraging all employees to use them. By empowering everyone to test, organizations can drive innovation and prevent stagnation. This approach allows team members to become comfortable with trying out new ideas and applying a “test and iterate” approach to their day-to-day activities. Some organizations allocated a specific amount of time each day for employees to pursue their interests and try out new ideas. 3M famously allowed its researchers to spend 15% of their time to investigate any scientific topic that caught their interest regardless of whether it had a direct bearing on the job objectives.
Google encourages creativity by allowing all employees to spend 20% of their time on side projects. This has led to many innovation including Gmail and AdSense. This approach spurs experimentation and allows employees to explore new ideas without fear of criticism. By encouraging creative exploration and making it an expected part of the job, organizations like Google and 3M can foster a culture of continuous trialing and innovation.
Leaders of innovation encourage employees to take small bets and risk failure. They publicly praise the efforts of those who experiment, even if the results are failures. Some companies encourage staff to take risks by gamifying the process with rewards for people for their experiments and ideas, regardless of the outcome. This approach can help combat the natural instinct to avoid failure and encourage more experimentation.
Fostering many small bets has been crucial to Amazon’s success. They continually test new styles, products and methods to see what works best for buyers and sellers. This worked wonders with Amazon Prime and the Kindle but led to many marketing disasters including the Amazon Fire and Amazon Destinations (a hotel booking service).
We need to run more experiments. Learn from Booking.com. We need to change our corporate culture to be more open, curious and experimental. We need to overcome the tendencies to be risk averse and avoid appointing blame for failure. We need processes that enable and fund multiple tests and trials.