Should we learn from mistakes and say we failed forward or pause and conduct an extensive test on about-to-be-launched strategies?
In arriving at a winning formula in any new or existing enterprise, there is a possibility that several approaches are evaluated. The various impacts of these approaches on the business models are considered in developing a working formula or strategy.
The path to this working formula is what are most times referred to as strategy testing. However, what represents the differentiation between outright mistakes and strategy testing? Outright errors or strategy testing, which is beneficial to the business, and how can the benefits be maximally harnessed?
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Strategy testing helps in detecting irregularities in business plans or models.
It helps identify the need for improvement in a business model, which prevents mistakes that may lead to the death of the business.
Developing the best business strategies requires several years of testing, evaluations of different methods and putting them to work on different scales with varying degrees of risk exposure.
This precision with which ‘strategy testing’ takes place is what differentiates it from ‘mistakes’.
Strategy testing is ‘taking to correction’ quickly.
During strategy testing, over and over again, elements of a particular strategy do not yield the desired results or that have forgivable value when contrasted with the effort in implementing them.
The sharp pivots away from what does not work are representative of an unparalleled ability to take to correction.
The team/company must exemplify an uncanny ability to take heed of the corrections prescribed by the results of their test.
Validating business model
The typical path to Product Launch
- Develop product based on either market survey or market observation!
- Scale down the rollout of a new product, identify the metrics that will properly monitor performance and adjust them to best fit,
- Scale-up gradually and determine relationships between the different performance metrics – linear of logarithmic.
- Possibly, adapt your product or ideas to reflect new information.
Pseudo Strategy testing- Learning from mistakes.
Humans are prone to mistakes!
The advocacy for strategy testing is a wake-up call to evaluate the possibilities for failure and begin to use findings to modify the approach to the end of building a sustainable model.
How do we learn from mistakes?
Suppress Ego– Acknowledge that a mistake as soon as hey is noticed.
Investigate every mistake – Understand the process that led to the error.
Keep a record of mistakes – Keeping track of errors might be very crucial in helping you stay ahead of those places you have faltered in the past.
Core differences between mistakes and strategy testing
Mistakes often occur because particular attention is not paid to the procedures that help validate the strategy being employed.
Strategy testing represents the whole of the procedure that
- Raises the confidence level of a business manager to very near 100%
- Helps in the seamless implementation of road maps to progress in a company,
- Strategy testing helps determine and eliminate most of the associated risk to any new strategy.
- Ensure proper understanding of other variables that guarantees success
Pillars of a good strategy testing
Understanding the customer demographic your business is going to serve is essential to testing and validating your strategy.
Allocating available resources to serve the primary needs of consumers is easier when the intended consumer segment has been determined.
Core values are what your business prioritizes in the face of bad decisions.
Also, core values are a proper reflection on the importance placed on the participants in the enterprise[shareholders, employees, customers etc.]. At some companies, the shareholders come first, and at some, the customers come first.
A Performance variable is a measure of how an element of an entity has performed using a pre-determined metric.
When testing a strategy, a long list of performance variables being measured does not necessarily guarantee success, Instead, it might clog dashboards and spreadsheets, preventing the right measures from being monitored and improved upon when needed.
This possible drift away from where value lies might lead to the failure of the strategy and in other cases, the business. The most effective managers monitor a small number of variables that align with the core values of the company. This helps them stay focused and well-informed about the health of their business.
Check out our post on THE KPI WAY TO INNOVATION to better understand how data can help drive growth at your company.
One of the significant benefits of strategy testing is the reduced risk it carries in comparison with going ahead with the strategy if it fails and goes on to become a mistake.
Furthermore, every strategy carries a potential risk to mar a business and a possible opportunity to grow the business.
Moreover, Strategy testing helps understands the risk associated with the strategy and develop boundaries that will ensure the new strategy does not hurt the business in a bid to drive growth.
Strategy testing and market disruption
Disruptions are increasingly shaping the markets today!.
These disruptions have increasingly toppled the dominance of previous market leaders and installed new category kings.
How does strategy testing help with market disruption?
Disruptive ideas might not necessarily be the result of an extensive consumer survey, but at the core of disruption is a deep understanding of the pain points of consumers and friction in the market forces.
Create a prototype and test launch based on this understanding. Strategy testing charts the path of least resistance to a launch. It ensures a disruptive product or idea does not end up in the hands of the wrong consumers.
In conclusion, the case for strategy testing is a bid to reduce the risk associated with businesses to the barest minimum!