Experimentation Matters: Unlocking the Potential of New Technologies for Innovation [Hardcover]

Stefan H. Thomke (Author)

Book Description

Publication Date: June 12, 2003

Every company's ability to innovate depends on a process of experimentation whereby new products and services are created and existing ones improved. But the cost of experimentation often limits innovation. New technologies—including computer modeling and simulation—promise to lift that constraint by changing the economics of experimentation. Never before has it been so economically feasible to ask "what-if" questions and generate preliminary answers. These technologies amplify the impact of learning, paving the way for higher R&D performance and innovation and new ways of creating value for customers.In Experimentation Matters, Stefan Thomke argues that to unlock such potential, companies must not only understand the power of experimentation and new technologies, but also change their processes, organization, and management of innovation. He explains why experimentation is so critical to innovation, underscores the impact of new technologies, and outlines what managers must do to integrate them successfully. Drawing on a decade of research in multiple industries as diverse as automotive, semiconductors, pharmaceuticals, chemicals, and banking, Thomke provides striking illustrations of how companies drive strategy and value creation by accommodating their organizations to new experimentation technologies.As in the outcome of any effective experiment, Thomke also reveals where that has not happened, and explains why. In particular, he shows managers how to: implement "front-loaded" innovation processes that identify potential problems before resources are committed and design decisions locked in; experiment and test frequently without overloading their organizations; integrate new technologies into the current innovation system; organize for rapid experimentation; fail early and often, but avoid wasteful "mistakes"; and manage projects as experiments.Pointing to the custom integrated circuit industry—a multibillion dollar market—Thomke also shows what happens when new experimentation technologies are taken beyond firm boundaries, thereby changing the way companies create new products and services with customers and suppliers. Probing and thoughtful, Experimentation Matters will influence how both executives and academics think about experimentation in general and innovation processes in particular. Experimentation has always been the engine of innovation, and Thomke reveals how it works today.

Editorial Reviews

Review

"A must read." -- Today's Books, August 4, 2003

"A new angle on innovation" -- Financial Times, October 30, 2003

"Experimentation Matters offers many useful insights into innovation and demonstrates how new technologies can have profound effects on business experimentation." -- Inc.com, September 30, 2003

"This is a highly informative and comprehensive work. Very highly recommended." -- Stern's Management Review, September 22, 2003

From the Inside Flap

"Thomke makes a major contribution to the science of innovation with Experimentation Matters. Using case studies across diverse industries, he compellingly demonstrates how new technologies are fundamentally changing the ways both business organizations and individual researchers innovate. Thomke's experimentation principles provide the roadmap to a future of rapid, cost-effective, and highly innovative product development." -Dr. Lawrence D. Burns, Vice President, Research & Development and Planning, General Motors Corporation

"Experimentation Matters is one of the most important and useful books about innovation that I have ever read. Thomke masterfully shows how new technologies and processes for rapid learning can improve the effectiveness and speed of product development." -Clayton M. Christensen, Professor, Harvard Business School, and author, The Innovator's Dilemma

"Thomke illuminates how new technologies have profoundly affected business experimentation and shifted managerial notions of what it means to be innovative. Companies that fail to heed his call to design, organize, and effectively manage their innovation processes will pay the cost, both in misspent dollars and creativity." -Dr. Peter B. Corr, Senior Vice President, Science and Technology, Pfizer, Inc.

"Thomke provides unique insight on a much neglected element of competitive success„oexperimentation. His very powerful and persuasive book shows how firms can use new technologies, such as the revolutionary advances in computer simulation, to achieve dramatic improvements in the productivity of experiments, and save crucial time in the difficult and dangerous passage between an innovative idea and a successful new product." -Dr. Henry C. Kelly, President, Federation of American Scientists

"If you want to understand how testing and experimentation strategies can make companies more productive and innovative, reading Experimentation Matters is a great start!"

-Steven J. Sinofsky, Senior Vice President, Office, Microsoft Corporation

"Thomke's book is a landmark achievement. He is absolutely right--experimentation lies at the heart of innovation. Thomke builds upon his own very original and rigorous research to explain how new technologies for experimentation are transforming product development and strongly affecting the economics of innovation as well. Both innovation researchers and managers will find Experimentation Matters to be an extremely interesting and valuable book." -Eric von Hippel, Professor, Sloan School of Management, Massachusetts Institute of Technology, and author, The Sources of Innovation

See all Editorial Reviews

Product Details

• Hardcover: 320 pages
• Publisher: Harvard Business Review Press (June 12, 2003)
• Language: English
• ISBN-10: 1578517508
• ISBN-13: 978-1578517503
• Product Dimensions: 6.3 x 1.3 x 9.3 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (9 customer reviews)
• Amazon Best Sellers Rank: #340,732 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

10 of 10 people found the following review helpful

5.0 out of 5 stars This book matters! November 6, 2003

By Max More

Format:Hardcover

The way to succeed is to double your failure rate. That comment by Thomas Watson, Sr. is not among the innovators' words of wisdom in Stefan Thomke's densely informative exploration of technologies and processes of experimentation but it perfectly fits the message. Central to Thomke's message in this book is the idea that iterated experimentation through the use of models, prototypes, and computer simulations is the key to learning and innovation. Getting the key to fit in the lock of increased organizational innovation capability, however, takes some jiggling and struggling. Experimentation Matters details the technologies that can transform innovation but place just as much emphasis on the changes that must be made to business processes, organization, culture, incentives, and management. Thomke provides plenty of detailed illustrations of companies wrestling with these issues, and offers six principles revolving to help companies experiment early and often and to organize for rapid iteration.

The first part of the book explains in depth the reasons why experimentation matters for learning and innovation, and how new technologies are affecting the development of both products and services. Thomke shows how the rate of learning is influenced by several factors that affect the process and how it is managed: fidelity, cost, iteration time, capacity, sequential and parallel strategies, signal-to-noise ratio, and type of experiment. Beneath the bewildering diversity of approaches to innovation in different industries, Thomke uncovers six principles that can improve how experimentation occurs: Anticipate and exploit early information through front-loaded innovation processes; Experiment frequently but do not overload your organization; Integrate new and traditional technologies to unlock performance; Organize for rapid experimentation; Fail early and often but avoid "mistakes"; and Manage projects as experiments.

In the final chapter, Thomke looks at how some companies are "shifting the locus of experimentation" to customers as a way to create new value. This approach, sometimes referred to as "co-creation", not only raises productivity but helps fundamentally change the sorts of products and services that can be created. Innovation toolkits given to customers need to enable them to iterate through the steps of experimentation, be user-friendly, contain libraries of useful, pretested and debugged components and modules, and they must contain information abut the capabilities and limitations of the production process. In addition to the development of a customer toolkit, Thomke adds four other steps for shifting experimentation and innovation to customers and, very importantly, notes how the creation and capture of value also shifts.

One great strength of Thomke's book is the attention given to the managerial and organizational challenges of implementing new technologies such as computer modeling and simulation and combinatorial and high-throughput testing. As other writers have repeatedly emphasized - but many managers have not yet understood - new technologies *must* be introduced only in concert with revised business processes, structures, and management approaches. Iterated experimentation helps learning by increasing the number of failures. But if incentives continue to punish failures, the new technologies will be underused or misused. Financial incentives, organizational culture, and management communications will have to change if experimenters are to feel free to fail at the most productive rate.

Thomke illustrates and details the crucial role of organization, process, and management in realizing the potential of experimentation technologies with a range of illuminating cases. He devotes a chapter to these effects in the integrated circuit industry, examines the challenges faced by Bank of America in its bold service experimentation efforts, and shows how managers at Eli Lilly struggled with non-technological aspects of high-powered experimentation in the drug discovery process. A study of experimentation in the auto industry, particularly at BMW, suggests several lessons regarding the reality of technology introduction: Technologies are limited by the processes and people that use them; organizational interfaces can get in the way of experimentation; and technologies change faster than behavior. Thomke also shows how managers can look at projects as experiments, reiterating, refining, and learning from them as they proceed through the stages of design, build, run, and analyze.

6 of 6 people found the following review helpful

5.0 out of 5 stars Innovation redefined November 26, 2003

By B.Sudhakar Shenoy

Format:Hardcover

Observation, exploration and experimentation have been the three basic means of learning for scientists. Of these, experimentation calls for the highest levels of external intervention and as a topic by itself has always been of interest to statisticians who have developed powerful techniques to derive maximum information through the least possible number of experiments. Application of these statistical techniques has resulted in substantial reduction in research expenditure, quicker understanding of scientific principles and shorter time to convert ideas into useful products. On the other hand new technologies like simulation, CAD/CAE that harness the advances in computing have completely changed the experimental landscape by providing powerful techniques for rapid and economical experimentation on our desktops and servers. To cite one example discussed in this book, car maker BMW's crash simulation test progressed from 3000 to 700000 finite elements between 1982 to 2002 while simultaneously resulting in reduction of processing time from 3 months to 30 hours. Power of computing enables "front-loaded" innovation - understanding the phenomenon before committing resources into physical manufacturing.

But the lacuna is that experimentation has never been thought as a separate management discipline cutting across functional silos to bring innovative solutions into the marketplace. Experimentation as a strategic tool that needs management attention and involvement is the core theme of this book.

Management deals with producing results under uncertainty. Uncertainty can be broadly classified under technical, production, market and customer needs. Experimentation should tell us not only what will work, but also what does NOT work. The knowledge so derived should seamlessly flow across the Design-Build-Run-Analyze cycle that cuts across departmental boundaries in large organizations. This is analogous to the concept of ERP in business processes. Though this concepts looks simple, organizational barriers prevent the seamless sharing of information for innovation. Design, manufacturing , marketing and procurement functions fail to optimize on the organizational repository of knowledge that can put winning products into the marketplace. This book is an excellent study on how management can use experimentation as a unique strategy within and beyond organizational boundaries. Case studies are quite detailed and well illustrated.

Read this book. It is worth experimenting.

3 of 3 people found the following review helpful

5.0 out of 5 stars Sound Experimentation July 24, 2003

By Phil Thomas

Format:Hardcover

The book's significance lies in Stefan Thomke's idea that sound experimentation is at the crux of the innovation process. This is a departure from either the fairly generalised thinking about product development and/or innovation, on the one hand, and the overly specific focus on techniques like simulation, on the other, that one tends to find nowadays. Experimentation is, of course, an old and commonplace idea in scientific circles and in some specialised management areas. But I believe this book will lead the way in making experimentation a crucial part of mainstream corporate management.

Thomke has developed his own conceptual framework for this purpose consisting of the four stages of "design-build-run-analyse". He focuses on a wide range of new experimentation technologies (including simulation) and he has studied how they are applied in a wide range of industries. He makes it a point to distill the knowledge thus gained into sets of principles, key factors, steps, findings etc at regular intervals. Thus the book's contents have been made highly accessible to a managerial audience. Managers will appreciate the challenge Thomke presents of tapping into the full potential of experimentation.

The book should also prove a valuable academic resource in management given the rigour of the research and its great managerial relevance. In fact, Thomke's cutting edge idea of customer toolkits for innovation (which catapult experimentation from the corporate realm to the customer domain) is already germinating in India. I, myself, have published a scholarly article on it very recently and I know others who have devoted sessions to it in top-flight MBA and executive programs here.

The book should make for absorbing reading by the management community worldwide and I recommend it highly.