Why it’s worth getting comfortable with experimentation
Put simply, experimentation is the engine that drives innovation. It allows you to transform data into action to create a better experience for your customers.
Look at the leaders in every field — Uber, Google, Amazon, Apple. They’re innovators. Companies whose experimentations have paid off, ushering in a new era of on-demand satisfaction, whether it’s transport, technology, eCommerce or entertainment.
This inclination to experiment comes from a culture of growth. One that’s implemented at every level and which paves the way for major gains in service delivery.
Obviously, the benefits of experimentation are incredibly valuable, but where does innovation start?
Innovation starts with trying new things
It sounds simple because it is. If we never tried new things, we’d never unearth novel, ground-breaking technology. Experimentation itself has been around since the dawn of time and has underpinned the most significant advancements since. From lighting the first flame to putting the first man on the moon. It’s a scientific method that was established as far back as the 17th century and is still critical to growth today, scientific or otherwise.
Flash forward to the 21st century and most sales are now being made over the internet, creating intense market competition. Conversion no longer relies on word of mouth or location convenience. Instead, you need a tangible and quantifiable edge over the competition. But how do you get ahead of the rest when they’re constantly evolving their own offering? By taking bigger, more innovative leaps, and doing it with confidence.
Experimentation is critical to solving problems and making way for progress. As digital business continues to evolve at a rapid pace, tried and tested solutions to common problems become few and far between. Instead, business challenges come with an extra layer of complexity that can’t be easily navigated. This is where technology can help you experiment with solutions quickly, and adapt to new conditions more rapidly, positioning you a head above the rest.
Think of it like this. If you’ve never encountered a business terrain before, and nor has anybody else, then you’re essentially going in blind. This is where experimentation becomes your map. It allows you to rapidly try, test, and accept or discard potential theories quickly, unearthing the eventual solution sooner.
Winning is nice but failure is priceless
Why? Because it closes the wrong path and gets you closer to the right one. That’s the most obvious benefit. A powerful by-product of failure, however, is creating a culture of risk taking because that’s how you unearth real insights. If your employees are scared to fail, they’ll never try anything new. And if you never try anything new, you’ll never produce major breakthroughs.
A culture of experimentation begins by acknowledging that everyone fails. (Those who haven’t obviously aren’t trying hard enough.) This approach will better support the growth of individuals and teams, instilling within them the confidence to make missteps on the path to breakthroughs, learning value lessons on resilience as they go.
How to introduce experimentation to your company
As we’ve just mentioned, experimentation is a culture earned, not introduced, particularly in the realm of insurance. It’s a cultural shift that invites failure, forgoes blame, and requires clear boundaries as to where and when experimentation can occur. This is where it’s important to clearly define and identify new and emerging business challenges — so you can direct the experimentation of digital solutions towards them.
That being said, it’s important to define the difference between good and bad failure — failure to respect authority shouldn’t be celebrated, failure in the pursuit of a complex solution should be.
Historically, experimentation within the insurance industry is carefully planned and kept within the confines of major projects that have long planning periods. So really, it’s not experimentation at all. Not without the necessary agility gained from shifting the culture of the whole company to one that’s focused on leading the market and doing whatever it takes to get there, failure included. This likely means shaking up the management process, introducing incentives and reducing the emphasis on detailed planning and budgeting.
The trick to maintaining an experimental culture
Most importantly, it has to start from the top down and be reinforced at every level thereafter. An experimental culture is something that should be strategically instilled by the CEO and COO, who should facilitate this cultural shift with bonuses that reward real, measurable results, such as improved profits of boosted revenue, rather than superfluous internal targets, like delivery timeframes.
Importantly, this top-down trickle effect needs to be supported by middle management who should be well-versed in the benefits of experimentation and should reflect this valuable risk taking in their own daily actions. It is only when this shift is reflected across every facet of the business — processes, meetings, projects, interactions — that experimentation will emerge as a dominant and sustainable internal culture.
The costs of keeping things traditional
When it comes to the question of whether or not experimentation is worth it, you know by now that it absolutely is. One glance at the world’s biggest brands will prove it. Look at Amazon. It’s advanced from being in an e-commerce niche and ventured into cloud computing, digital streaming, artificial intelligence, and now insurance.
Or Apple and Google, who are both now dabbling in banking.
By not following in their experimental footsteps, you risk falling behind. Worst still, you risk falling victim to tech-savvy newcomers looking for new markets to dominate — like Root and Lemonade, formidable new insurance forces now capitalising on their innovations. While on the surface, the results don’t read like breakthroughs, their ability to continuously raise money and spend it on taking risks is a threat to any established insurance business playing it safe. Even if they don’t make it they’ll encourage a flood of new insuretechs to follow in their footsteps.
It’s time to shake things up with insurtech
Insurtechs are your ticket to experimentation. By nature, they’re designed to challenge the status quo and can rapidly test solutions, surpassing the pace of any analogue IT team.
Take a look at Ernie Garvcia, CEO of Carvana – or ‘the Amazon of auto’. Since launching in 2012, his used car ecommerce platform gained a market capitalisation of $62b. How? Confidence, agility and experimentation.
Says Garcia, “When we started eight and a half years ago, we were a bunch of ambitious kids with a shocking amount to learn. With the benefit of hindsight, it is now clear we had no idea what we were getting into…From here, I hope we don’t get complacent. I hope we keep fighting. I hope we take on the hard days and keep doing things worth doing. I hope we keep learning.”
Garcia is testament to the fact that unbridled persistence and confidence is a powerful thing, because together they’ll make you take risks industry veterans would never dream of. The simple fact is, you’re never going to achieve the perfect business model, but that doesn’t mean you should never stop trying. Because tech-driven experimentation will always keep you one step closer to success.