Innovation VS Experimentation
Are they the same thing?
I was recently recording a podcast with a colleague in work who asked me “What’s the difference between Innovation and Experimentation? Are they the same thing?” which momentarily took me aback but it’s a great question, and an important one, in the context of enterprises and where to allocate resources.
In short — no, they aren’t the same thing, so let’s dive right in.
Innovation
I’ve been defining Innovation for the last while as:
Innovation is Delivering New Value
Delivering — actually building and trying it out. It doesn’t need to be a fully spec’d production system, but to get real world feedback you’re going to need to use a real world solution. Ideation by itself isn’t innovation — we can workshop all day long, but coming up with ideas isn’t enough unless we do something about it.
New — it’s something new to your business. It doesn’t need to be new to all of your industry, but if you haven’t done it before and it’s going to improve your business, it’s probably innovation.
If other parts of your company has done it before however, it’s probably not innovation, it’s implementation. That’s not saying that you shouldn’t do it — but you shouldn’t be allocating “innovation” budget to it; that needs to go on new solutions.
Value — this should probably go without saying, but it needs to either make large amounts of $$$ or save large amounts of $$$. If it’s something really cool or flashy, that’s great and may be good for branding or recruitment purposes, but if it’s not actually going to make a material difference to anything, it’s not innovation.
The “large” amounts is important aswell — innovation isn’t about small incremental changes, it’s about making significant improvements to your business.
Experimentation
So what’s experimentation, and how is it different to innovation? I like to define it as:
Innovation is Delivering New Value, Experimentation is Finding Out If There Is Any Value
Let’s say you want to build a new app for your customers to use — up until now they’ve used a website, maybe you’ve a call centre aswell. The app could make this more convenient, drive more sales, offer better service — let’s do it! This is classic innovation, but it’s not experimentation, as if you do everything right and you get good user adoption, the result can be predicted.
Experimentation is when you think there’s value in something but need to research and experiment to find out.
Generative AI is a great example — all the current furore and excitement about Large Language Models, ChatGPT etc has led to businesses wanting to try it out. Even though there are lots of articles, consultants, startups etc promising that it’s going to change the world and your business and that you need it immediately, it requires well structured experimentation to actually find out if there is value to be had, and if so offer an opinion on how it can be realised.
A former colleague, Gillian Armstrong had a great way of putting it — exploring (experimentation) is turning uncertainty into risk. Risk can be handled — but we need to first understand it, to define it — so when we’re dealing with a technology or concept where we can’t define the risk because it’s uncertain, we need to remove or reduce the uncertainty, through experimentation.
Why is it important to define Innovation and Experimentation?
It’s important to understand what innovation is and what innovation isn’t, and what experimentation is and isn’t so you make sure you’re investing appropriately.
For most enterprises, you’re going to have different types of work:
- Keeping the Lights On — maintaining and supporting your core business. This pays the bills!
- New features, products and services — unless you’re in a remarkably stable industry with almost no change, you’re going to need to keep changing and innovating to keep up or stay ahead of the competition.
- Experimentation — you need to understand new technologies and concepts, so you can know if you need to invest more time and money in them. e.g. Is ChatGPT of real value or not?
If you don’t define work into different categories like this you’ll end up either stagnating, or spending too much resources on new technology that may not help your business.
An interesting case study is Meta (Facebook’s) current large investment into the MetaVerse and virtual reality — recent reports of $13 billion loss in Meta’s Reality Labs sounds pretty stark. Maybe they view this as an acceptable price for experimentation; time will tell whether it has been a good or bad investment. What else could they have spent the 13 billion on?!
Likewise, for every amazing Apple product that gets released, there’s likely many others that were experimented with and not released. Not every company has the $$$ Meta and Apple have of course, so planning and understanding is key for your business!
Summary
- Innovation — delivering new value.
- Experimentation: finding out if there is value.
Let me know what you think below or you can get me on LinkedIn
