Good Essay

5341 words - 22 pages

How to Design Smart Business Experiments


How to

Managers now have the tools to conduct small-scale tests and gain real insight. But too many “experiments” don’t prove much of anything.

Smart Business Experiments
by Thomas H. Davenport

February 2009

EVERY DAY, managers in your organization take steps to implement new ideas without having any real evidence to back them up. They fiddle with offerings, try out distribution approaches, and alter how work gets done, usually acting on little more than gut feel or seeming common sense – “I’ll bet this” or “I think that.” Even more disturbing, some wrap their decisions in the language of science, creating ...view middle of the document...

ing it difficult if not impossible to detraining, readily available software, Consumer-facing companies rich in termine what was really driving any and the right encouragement, an transaction data are already routinely improved results. Branches undergoing organization can build a “test and testing innovations well outside the interventions weren’t matched to conlearn” capability. realm of product R&D. They include trol sites for the most part, so no one » Companies that equip managbanks such as PNC, Toronto-Dominion, could say for sure that the outcomes ers to perform small-scale yet and Wells Fargo; retailers such as CKE noted wouldn’t have happened anyway. rigorous experiments don’t only Restaurants, Famous Footwear, Food Anxious to head off criticism, managers save themselves from expensive Lion, Sears, and Subway; and online did provide a control in one test, which mistakes – they also make it more firms such as Amazon, eBay, and Google. was designed to see if placing video likely that great ideas will see the As randomized testing becomes standard screens showing television news over light of day. procedure in certain settings – website waiting lines would shorten customers’ analysis, for instance – firms build the perceived waiting time. But rather than capabilities to apply it in other circumlooking at control and test groups, they stances as well. (See the sidebar “Stop compared just one control site with one Wondering” for a sampling of tests conducted recently.) To test site. That wasn’t enough to ensure statistically valid results. be sure, there remain many business situations where it is not Perceived waiting time did drop in the test branch, but it went easy or practical to structure a scientifically valid experiment. up substantially in the control branch, despite no changes But while the “test and learn” approach might not always be there. Those confounding data kept the test from being at all appropriate (no management method is), it will doubtless conclusive – but that’s not how the findings were presented to gain ground over time. Will it do so in your organization? If top management. it’s like many companies I have studied, an investment in softIt doesn’t have to be this way. Thanks to new, broadly availware and training will yield quick returns of the low-hangingable software and given some straightforward investments fruit variety. The real payoff, however, will happen when the to build capabilities, managers can now base consequential organization as a whole shifts to a test-and-learn mind-set. decisions on scientifically valid experiments. Of course, the scientific method is not new, nor is its application in business. The R&D centers of firms ranging from biscuit bakers to drug When Testing Makes Sense makers have always relied on it, as have direct-mail marketFormalized testing can provide a level of understanding about ers tracking response rates to different permutations of their what really works that puts more intuitive...

Other Papers Like Good

A Good Fight Essay

573 words - 3 pages Ah, the good fight, meaning a conflict for the betterment but not just an argument for the sake of argument. But conflicts; discord of action, does not actually means to fight but simply means not to agree upon same concept, opinion or an idea. Leader is a person with the vision, and vision is an idea that sets the path to address followers needs, needs can be things that are usually desired to achieve or things that require change and change

How To Be Good Essay

1161 words - 5 pages Analysis of “How to Be Good” In the excerpt from the novel How to be Good, the author, Nick Hornby introduces a story that illustrates an issue of homelessness in an upper middle class neighborhood. The narrator, Katie Carr, finds herself in a situation where she is dealing with her husband, David, and his friend’s, GoodNews, mission to change their neighborhood by decreasing the number of homeless youth. Their solution to this neighborhood

Good Boss/Bad Boss

925 words - 4 pages Week 7 – Appendix E Comparison and Contrast Draft – Good Boss/Bad Boss Do you enjoy your job? Do you look forward to going to work every day? Does work give you a sense of accomplishment? Hopefully it does because you may not be aware but; the Fair Labor Standard Act (FLSA) establishes that a traditional full time employee works 40 hours a week which means you spend 24% of your week at work. The National Sleep Foundation recommends

Developing Good Business Sense

785 words - 4 pages Developing Good Business Sense 07/06/2014 BUS 210 The three establishments that I choose for this project were Burger King, Barnes & Noble, and McDonalds. I have paid close attention to how the employees performed their task. I will talk about the kinds of OMM costs companies have and how does this affect their OMM operations. Also, I will be talking about how these companies made their operating systems to give them an advantage over

Good Seafood, Great Health

2015 words - 9 pages Good Seafood, Great Health OUTLINE Claim: Doctors and chefs agree seafood tastes great; seafood is a very healthy food source and the supply is plentiful. Antithesis: When stored or prepared incorrectly, seafood can be deadly. I. Nutritional and Health facts A. Types of fish and cholesterol B. Low-Density Lipoprotein(LDL) and High-Density Lipoprotein (HDL) C. Seafood diets and long life II. Ways to consume and

What Are 'Good' Industrial Relations?

1985 words - 8 pages What are ‘Good’ Industrial Relations? What are ‘good’ industrial relations? It can simply be described as a workplace in which the employees are motivated and happy. This occurs when a workplace has solved their problems; however there is no single means to achieving this. Pluralism, unitarism and radicalism are three theoretical approaches to industrial relations. Unitarist theory believes that the employees should have the same goals

Character Traits Of A Good Student

321 words - 2 pages Mackenzie Blake 9/20/12 Essay 1 CHARACTER TRAITS OF A GOOD STUDENT There are many character traits of a good student. A few are: study habits, not procrastinating, and taking notes. If a student takes these traits and applies them to his student life they will benefit him and make him a good student. Good study habits are very important in a student’s life. There are a lot of ways a student can study. Making note cards or studying over class

Every Workplace Deserves A Good Indoor Environment

907 words - 4 pages Preface SJWEH Suppl 2008;(4):3–4 Every workplace deserves a good indoor environment Problems with the quality of the indoor environment have become a new and demanding challenge to occupational health and safety. Modern workplaces resembling office environments that do not have any hazardous exposures originating from work processes can face other problems related to the indoor environment, for example, problems related to substances that

Hw #3 Yummy Good Treats Scope Analysis

561 words - 3 pages 1) Define the scope of the analysis 2) Identify assets for review • Who will be involved? Is good to have a team set up that includes business personnel, because an information security team usually does not know the business processes and will focus their efforts on specific threats and technology and then would not be able to justify the need for new security products. Whereas business personnel will know their processes and what

The Good Life As A Meaningful Life

1596 words - 7 pages The Good Life as a Meaningful Life Life… An everyday task in which each and every human being participates. We interact, procreate, strive to better our standards of living and look for the answers to questions, which in our society, have not yet been answered. This task which demands our outmost attention and participation is a task in which everyone takes part. Yet we do not know much about it. We do not know the aim of life, how it should

Take A Good Hard Look Inside

1163 words - 5 pages Take a Good Hard Look Inside Jason Pharr As I write this essay, I can say I am completely and utterly stressed out. Between all the calls from debt collectors, the tickets I am having to pay off, and all of my other bills and medical expenses that I am unable to pay, I can honestly say that I am concerned with where my life has gotten to over the course of the last year. Around two years ago, I was completely debt free, had a great job, and

Related Essays

Good Essay

1372 words - 6 pages Define what "good" means to you. Being good does not mean only by outer goodness . You have to consider being good straight from the heart i.e purely . Ultimately, you have to decide on your own code of ethics, and what matters is that you follow through with what you believe makes you a good person. At times, this may conflict with what others believe is good, and they might even accuse you of being wrong or evil. Consider their views-either

Good Essay

527 words - 3 pages Tri Tran Per2 Stock Market Game Companies: 1. Electronic Arts Inc. (EA): Electronic Arts Inc. develops, markets, publishes, and distributes game software content and services for video game consoles, personal computers, mobile phones, tablets and electronic readers, and the Internet. It provides games, and related content and services under the EA brand in various categories, including action-adventure, role playing, racing

Good Essay

370 words - 2 pages Dead Poets Society Dead Poets Society (directed by Peter Weir, 1989) is an American must-see drama film, which both make you laugh and shed tears. Robin Williams (as Mr. Keating) is once again making a movie exceptional with his acting competences. The film takes place in 1959 mainly at Welton Academy, the best preparatory school in the United States. It is an all-boys preparatory school. The school is for students with excellence who someday

Good Governance Case Study

369 words - 2 pages Good Governance Case Study Case Study 1 Mini Case: ACCT-05 Business Ethics Program Challenges Encounter: The action made started with the acquisition of additional asset through a loan acquired from a falling competitor. The assets obtained were a problem knowing that all the information about the inventory was nowhere to be found resulting to a sales decline. Without Rick knowing, Russ as a president holds large amount of checks, as a